Videotex Systems: the Issues For Consumers and Consumer Behavior Specialists

Mary Gardiner Jones, Consumer Interest Research Institute
ABSTRACT - This-paper discusses some of the potential obstacles to consumer use and enjoyment of the information retrieval capacities of the new information technologies. The paper also describes the new consumer problems generated by the transactional and information retrieval services of the videotex systems in the areas of competition and consumer protection. Areas of research for consumer behavior specialists are suggested as ways of dealing with these obstacles and problems.
[ to cite ]:
Mary Gardiner Jones (1984) ,"Videotex Systems: the Issues For Consumers and Consumer Behavior Specialists", in NA - Advances in Consumer Research Volume 11, eds. Thomas C. Kinnear, Provo, UT : Association for Consumer Research, Pages: 514-519.

Advances in Consumer Research Volume 11, 1984      Pages 514-519

VIDEOTEX SYSTEMS: THE ISSUES FOR CONSUMERS AND CONSUMER BEHAVIOR SPECIALISTS

Mary Gardiner Jones, Consumer Interest Research Institute

ABSTRACT -

This-paper discusses some of the potential obstacles to consumer use and enjoyment of the information retrieval capacities of the new information technologies. The paper also describes the new consumer problems generated by the transactional and information retrieval services of the videotex systems in the areas of competition and consumer protection. Areas of research for consumer behavior specialists are suggested as ways of dealing with these obstacles and problems.

Every society since earliest time has recognized that knowledge and information are power. The printing press, the development of public education systems and the growth of public libraries have all been hailed as important breakthroughs to enable the masses to obtain information on their own and thus to develop their own potential and interests free from the influence and control of the dominant institutions of their society - government, church and corporations. Today the new electronic information technologies are again being hailed for their capacity to serve a much larger spectrum of information needs of a much broader base of individuals than any previous communication medium.

But again, this hope must take into account the reality that simply enlarging the media's capacity to provide information or increasing the amount of information available to individuals does not automatically guarantee that the information will be generated or be used by consumers to respond to their needs.

The new information technologies present important new challenges to the consumer behavior research community to apply their expertise to narrow the gap between a potentially unlimited capacity to provide information and consumers' interest, motivation and ability to exploit that capacity for their own needs and desires.

This paper will address some of these issues of consumer interest and response to the information technologies. It will also address itself to the continued efficacy of current regulatory tools such as the antitrust and consumer protection laws regulating market structures and behavior and issues of individual privacy as these impact consumer use and enjoyment of the information services of the new technologies.

I

THE ROLE OF THE NEW ELECTRONIC INFORMATION RETRIEVAL SYSTEMS AND CONSUMER RESPONSE

Consumers today, whether economically advantaged or disadvantaged, whether living in rural or urban environments or whether educationally sophisticated or not, share common information needs.

Most consumers in the United States experience similar feelings of helplessness and victimization as they seek to cope -- not with grinding poverty --but simply with the day-to-day tasks of managing their daily lives. Indeed, their needs for information are as essential to their daily living as the information needs of business are for their daily functioning. Today, for many consumers, the daily business of living has become sufficiently complex, costly, and labor intensive that consumer access to organized information is not only feasible but necessary.

Choosing among the myriad of products, models, and brands in terms of their energy consumption, repair or safety records, nutritional content and overall value can involve crucially important decisions for consumers whose margin for error is minimal. Choosing a reliable repair service becomes a critical decision which can drastically affect the smooth operation of households.

By the same token, our increasingly service-oriented economy is creating new information needs which are largely ignored today. Whether it be to select an appropriate school or college, training course or continuing education program, or to identify a nursing home, find a qualified doctor or lawyer, check out a recommended drug or medical regimen, apply for Social Security, unemployment or welfare benefits or search for a job, consumers need the rapid and convenient access to a wide variety of disparate materials which the new information technologies can provide. It has never been realistic before for most consumers to engage in a comprehensive research project in the local library to find out what questions they can or should ask. Yet today the relevant data can be assembled and the appropriate software programs developed so that consumers can, in a literal sense, have the worlds storehouse of information at their finger tips at the time of their choosing and in formats which can be directly related to their level and scope of interest. It is this capability which makes it finally realistic for consumers to research electronically for answers to their questions.

Unfortunately, the record to date offers little hope that without some very specific incentives and an informed understanding of real consumer needs, the new information technologies can effectively meet these urgent consumer needs.

More than a dozen videotex, teletext and home computer systems have been designed by commercial and non-profit entities either as pilot models to test limited aspects of the new information technologies or as full fledged commercial operational systems. Almost all of those systems have included some "consumer" information among their offerings. Some of the pilot systems offered community bulletin board items, information on food co-ops, halfway houses, museums, transit schedules, car pools and the like. Some of the commercially operated systems have experimented with providing local retailer information on prices and shopping opportunities. Two systems offered access to a well known encyclopedia and several offered tutorial educational courses for adults or children. For the most part, however, the bulk of the so-called consumer information offerings by these systems consisted essentially of movie and restaurant reviews, airline guides, sports, and news. Moreover, virtually everything offered as "information" was simply an electronic reproduction of pre-existing print or broadcast materials. Even where an information topic might appear to respond to some coping need of an individual (eg. "abortion", or "career counselling"), the information consisted of an abstract of a news item or feature article which appeared in the New York Times or in some other standard periodical or encyclopedia.

It is clear that there was very little specialized consumer research which animated the decisions of these various system managers as to the types of information which they would offer to consumers. Nor were any special efforts made, so far as can be determined, to sell the new electronic technologies to consumers as a new information retrieval service to meet their needs. Advertisers fully understand that to simply offer a new product or service on the market will in no way assure its acceptance by consumers. Extensive advertising campaigns are needed to tell consumers about the new product or service and why they should try it, often including price and premium inducements to overcome consumer inertia and reluctance to change and to persuade them to sample the new product. I am quite sure that this process is equally, if not more important, to help consumers understand the value of the new technologies to provide information to them, to help them make decisions or to take action in the marketplace, in the political arena or in their community.

In designing such "education" or advertising campaigns and determining which types of information are likely to have market value to consumers considerable thought must be given to the ways in which consumers perceive information to be of value to them.

A principal justification for the use of market concepts in measuring demand is the Premise that what people are willing to pay for a product or service is the most reliable and realistic measure of the relative value they place on the vast mix of products and services competing for their attention and patronage. Without debating the quality and degree of consumer sovereignty which exists in the marketplace, we have to recognize that viewing information as an ordinary commercial product and hence subject to this bottom line test of "real" consumer need has several and, I believe, serious fallacies in terms of the normal operation of demand in a market context.

Maslow characterized the basic human needs which are essential for self fulfillment into physiological and safety needs on the one hand, and needs for love, esteem and self actualization, on the other. In practice, individuals expend very different amounts of energy and capital on fulfilling these two categories of needs depending on their income and educational levels as well as on their levels of self awareness of the relation ship between their needs and the resources of the community available to fill these needs. Attending to basic needs required to survive such as housing, food, clothing, and other essential products and services will always take precedence over so-called "discretionary" needs for other goods and services not regarded as so essential or whose benefits and values are seen as less immediate and perhaps also as less certain or even as somewhat fearsome to attempt to exploit.

Thus, because of the more tandential indirect benefits which individuals perceive in education, information and other less material goods, it is not clear to what extent the market system concepts of supply and demand can constitute a reliable indicator of consumer needs for these more intangible indirect benefit type goods. Their purchases and choices expressed in market terms may only reflect how citizens allocate what monies they have and hence what their needs are. Their failure to "buy" information may also only say something about their inadequate understanding of what information can mean to their lives or about their own fears of wasting money on a product they feel ill equipped or shy about seeking and hence about their state of mind and self image rather than about their needs and desires. Willingness to pay and actual need to not necessarily equate. We need to know much more about the value which consumers place on information and how they value their own information needs before we can determine the respective role of the private and public sectors in meeting these needs.

Finally, we have very little systematic information about the abilities of various types of consumers to acquire and utilize information materials. Certainly the market for "how to" books and publications, the high rate of consumer requests for free and minimally priced government publications in energy and related fields and the various surveys of library users attest to a relatively high level of demand among at least some consumers for printed information materials. So far as I know there is little research on consumer reactions to electronically disseminated information. An important body of research has documented the fact that many consumers rely on their friends as a preferred source of information about product and services. The difficulty with this data is that we do not know precisely which types of consumers seek information for which type of product or service not do we know whether friends are relied upon for information because that is a more convenient way of acquiring the information, because it is more trusted or because it is the only conveniently available source of comprehensible information geared to the inquirer's needs. We do not know to what extent consumers prefer a human being to a neutral passive source of information, whether this preference is guided by the type of question (abortion, sex information, career options) and in what circumstances a non human question and answer format would be a preferred source of information if it was available and relevant. The apparently highly favorable reaction of consumers to ATMs versus bank tellers may provide some clues to answers to these questions.

Because of the absence of hard data on these aspects of consumer information demand, plus the obviously highly limited nature of the so-called "consumer" information offered on videotex systems to date, any conclusions drawn from these on-line or pilot systems as to whether consumers have information needs which can be profitably served by the new technologies or whether consumers actually want or need information must be viewed with extreme caution.

Therefore, the central question of the suitability of these new information technologies to respond to consumer information needs remains unanswered. This is a fertile field for consumer behavior researchers to explore. The issues are as vital for consumers as they are for information systems managers. Consumer behavior researchers could undertake a series of research projects designed to test out what are some of the real information needs of consumers and also what are the realistic information retrieval potentials of the new technologies for consumers. A properly structured survey of consumers' coping needs in today's society would be an important first step. The second step would be to design information retrieval software of varying types to test out consumer responses to the new technologies' modes of dissemination. How do consumers ask questions about problems of concern to them? To what extent do they respond to many listings of available information? Do they want their information in textual formats? Or do they want it directorized with names, addresses and telephone numbers of human beings whom they can contact? Finally, we need to know what inducements or encouragement are squired to motivate consumers to explore the value to them of acquiring information for their daily coping needs. Only then can we hope to induce the private sector to invest the time and effort in developing the software to meet what I believe to be real and urgent information needs of consumers. Also, once this data is in place, consumer organizations and other non-profit institutions interested in consumer information can develop their own consumer information data bases secure in the knowledge that these data bases in fact respond not only to the substantive information needs of consumers but to their information processing capacities and preferences as well.

II

THE APPLICABILITY OF TRADITIONAL REGULATORY CONTROLS TO THE NEW INFORMATION TECHNOLOGIES

A second set of issues posed by the new information technologies of concern to consumer behavior researchers involves the applicability of traditional competition and consumer protection regulatory programs to the information and transactional services offered through this new electronic medium

A. Competition Policy

The principal regulatory tools to assure effective consumer access to the goods and services of the market place are the anti-trust laws. Aimed at ensuring that the marketplace is fully competitive and that concentration will not stifle entrepreneurship and innovation, the antitrust laws seek to promote the availability of the widest diversity of goods and services at the lowest possible price.

To the extent that we intend to rely on the private market system for the exploitation of the new information technologies to generate and disseminate information Products to consumers. the applicability of the anti-trust laws to these new technologies becomes a critical issue.

Yet the unique properties of information raises serious questions about the suitability of many of the regulatory principles of the anti-trust laws to this new "product".

Information in today's new information society is both a resource and a commodity. It is a "product" which is generated in almost equal amounts by academia, by government, by non-profit institutions and by commercial establishments. The same item of information can be both an article of commerce and an essential ingredient to a program serving a vital public purpose. For example, educational or hospital records are essential to the operation of the institution. They may also be necessary to an academic researcher or government entity charged with evaluating the performance of that institution or its compliance with regulatory standards. Finally, they can have enormous commercial value to information system managers and equally significant value to a consumer organization desiring to offer their subscribers or constituents a data base on educational institutions or hospitals. Similarly, weather information for air traffic control or climate information for agricultural extension programs has both public and commercial value.

The most unique characteristic of information which sets it apart from traditional products and most services -- is that it is infinitely leakable, expandable, diffusive and intangible. Information is not consumed or depleted. When the possessor of information shares it with another party, dominion over it is not surrendered and both parties continue to possess it in exactly the same manner as before. Moreover, the new satellite tape and xerox technologies render it instantaneously reproducible and possessible by its first viewer, hearer or reader and capable of being passed on by each in the same format as i. was received by them.

The other aspect of information closely related to its vanishing expendable nature concerns the question of who owns it. One of the characteristics of information is that the same item of information is or can be known to a wide variety of individuals and institutions in identical or similar detail. The question instantly arises as to whether ownership can attach to raw data and, if so, who is the owner - the nursing home or the researcher observing or interrogating the nursing home owner, the patient or the patient's family, the nursing home administrator or its employees? Does a hospital or educational institution "own" the information about its operation or performance or about the performance of its "clients", the patients or students. Aside from issues of privacy, can a hospital or educational establishment "sell" information about its operations to a data base house or to any other interested commercial entity? What about the rights of access to that same information by other commercial organizations, non-profit associations, government regulatory bodies or academic researchers? What happens to the access rights of an individual consumer, consumer organization, author or media interested in accessing the same information?

These unique characteristics of information as differentiated from traditional products raise serious questions of how to value this "vanishing" product, what "rights" do possessions of information have with respect to it, what incentives exist to create or generate it in usable formats, and what techniques or legal concepts are available to the generators of information products to protect whatever legitimate proprietary rights are deemed to inhere in these products? These questions are by no means theoretical - for either the generator or the users of these information products. New York publishers recently threatened to sue several professors in New York University for excessive xeroxing of their works, movie producers are locked in a monumental legal battle with video tape recorder manufacturers for facilitating home recording of their movies and cable companies are being challenged for their local carriage of national network programs.

It seems obvious that society has a paramount interest in the freest possible flow of information. Indeed the competitive multiple offerings of the same information may be the only practicable safeguard available to consumers to ensure the quality of the information available to consumers to ensure the quality of the information available to them

Yet antitrust doctrine as the guardian against restraints on competition depends to a large extent on concepts of product ownership and alienation which in many respects are inapplicable to information.

While answers to these questions will, in the first instance, probably be regarded as within the expertise of the lawyers, in fact consumer behavior specialists, whose special province is the marketplace, will clearly be concerned with the answers as they are developed. The types of information products generated by the new electronic technologies may be directly impacted by the "protection" which the antitrust Laws will realistically be able to accord to these products

B. Consumer Protection Policy

A final set of issues raised by the new technologies of interest to consumer behavior specialists concerns what we might call their consumer protection features.

Problems of deceptive representations and misleading practices in the marketing, of products and services have long been acknowledged in the commercial arena. The legal and regulatory structure to deal with these practices is well established and has proved for the most part adequate and effective. However, several problems arise with the automatic application of these regulatory structures to the marketing of information products and transactional services over the new electronic information systems. The first concerns the differentiation of information and advertising and the new forms of potential deceptions for consumers arising from the listing of information and transactional services which are unique to the electronic technologies. A second set of problems concerns potential areas of abuse and unfairness in the electronic marketing of goods and services and a third set of problems involves potential infringements of consumer privacy in the managing of the new information systems.

Some advertisements included in information banks will be openly identified as commercials. Thus, consumers will at least have the minimum protection of knowing the source and bias of the message they receive. Whether these messages will be subject to the traditional protections against false and misleading advertisements such as the regulations that now apply to ads on TV or in the newspaper is not yet clear. Presumably, these traditional consumer protection regulations will be applied and will prevail over claims that any information included in an electronic information bank is constitutionally protected free speech.

However, new forms of electronic advertising (eg. "infomercials") are developing in which the line separating information from advertising may be much harder to delineate. Infomercials between 5 and 15 minutes long, for example, are similar in format to mini-documentaries. They are prepared by the commercial sellers of goods and services and typically provide information on such topics as travel tips, or the advantages of fossil fuels, or on how to purchase an automobile or apply make-up. The issue raised by these infomercials is whether they should be treated as traditional advertisements subject to FTC-type regulations, or whether they are a form of free speech and thus protected by the first amendment from government interference regardless of any false or misleading statements they may contain.

If it is determined that infomercials are a form of free speech and hence immune from regulation, a minimum protection for which consumers are likely to press would be a requirement that information system managers disclose the sponsoring source of the infomercial and the date and time of input, if relevant, and provide an accurate and reasonably complete content index of the offering. Such a disclosure system has been instituted by the British videotext system. PRESTEL, which offers a Directory of Information Providers clearly listing the names of all information providers in the system. [The British are also dealing with consumer protection issues relating to electronic media through the development of a code of advertising practices. The code is predicated on a notion of information provider (as opposed to system operator) responsibility for the quality of the information contained in the system. Such a code follows the print and broadcast media's current position on classified and other advertisements and would clearly be an essential principal in any common carrier-based information system. Whether appropriate for cable and other broadcast-based systems which insist on their right to control content is another question especially if they are realistically the only electronic information outlet in a community.]

How to define "sponsorshop" and make certain that commercially motivated information providers are identified as such are important issues which need to be resolved if this protection is to enable consumers to evaluate information and determine which sources of information they want to use. Therefore, it would be invaluable to have research data on whether such disclosures would meet consumer needs for sufficient guidepoints by which to select and evaluate data base information offerings.

Effective presentation of the information offering is also a critical element in consumer efficient use and ultimate enjoyment-of the new system. My own research into the so-called "information offerings" of two general information services geared to general consumer use indicates that the information offered is poorly indexed and described so that consumers have difficulty in "browsing" easily and inexpensively through the offerings to see whether they are relevant t.j their needs. Even a simple notation of how many "pages" is comprised in a listed information item is not provided. The source of the information item is also not disclosed on the index. No indication is given as to whether the information is textual, statistical or directorized. It is critical to the user whether a movie review is 3 lines or 3 pages. A listing of names, addresses and telephone numbers of baby sitters or day care centers is very different information from a 3 page article about day care centers or baby sitters or about the different age children for which day care centers or baby sitters are considered appropriate or about indicators to look for in evaluating the quality of these services. Again research is urgently required to learn about what indicators of relevance, bias and quality would be helpful or desired by consumers in order to facilitate their use of the systems.

The evolution of shopping and other transactional services via an electronic information system raises a number of related consumer protection issues. For example, the index headings and classifications under which commercial suppliers of products and services choose to have their "information" offerings appear can have a significant influence on the user's evaluation of that information. A message about a product or service inserted under an index category titled "Advice, Assistance and Consumer Information" by the commercial entity providing the service would convey a different message than the same information appearing under the heading, "Services for Purchase".

Another set of issue which has not yet been resolved focusses on who bears responsibility for a product or service ordered. Should the consumer always have an absolute right of return in the event of an error? Should the company receiving the order be required to confirm it with the customer before filling the order? Is there some other safeguard which can protect consumers from keyboard and other errors? And, how does the consumer have a record of what has been ordered or the terms and conditions of the transaction? Should consumers be provided with a copy of what the computer has provided the supplier by which the order is regarded as final? All these issues require careful and deliberate consideration.

Both cable and telephone-based computer information systems pose another type of consumer protection issue which needs to be addressed. Two-Way cable systems have the capability of instantaneously polling their subscribers on any issue ranging from political issues and candidates to product preferences. Fears have been expressed that these so-called public opinion polls and market surveys could be misused since there is no way to ensure that the information system subscribers who respond to these polls and surveys are in any way reflective of the entire community. [The electronic that capabilities of two-way systems could also be used by individuals to seek out the views of fellow subscribers on particular products and services. If used by a commercial entity to provide so-called data on user reactions, it would be subject to the same limitations of potential bias and lack of randomness of the sample described above with respect to subscriber polls on political issues. If used, however, by individuals to obtain data on the use of a particular product, it would seem to be no different than their reporting the opinions and experiences of friends and indeed would have the advantage of a broader sample.]

Pollsters may provide disclaimers or disclosures about the significance of the data they provide. However, disclaimers and disclosures are a notoriously ineffective way of explaining factual claims and electronically-gathered information could still mislead decision-makers and consumers or be misused to substantiate positions or product and service claims by parties with vested interests in the results. The issue is a new one for consumer protection. It requires careful analysis as to whether such polls should be allowed, and if so, under what conditions so as to ensure the basic reliability of the data. Consumer behavior researchers familiar with these type of surveys and polls and with their use by advertisers and political parties should be able to design research projects which will assist us in framing answers to forestall some of the potential abuses to which the new instant interactive electronic technologies would seem to be so susceptible.

Finally, fears have been expressed that videotex services could pose critical issues of privacy invasion for consumers utilizing these services. Visions o, Big Brother with access to large amount of dossier-like data on things purchased, money spent, trips taken, and the times when all these things are done is a matter of serious concern to many thoughtful citizens. In part, the existence of census, internal revenue and social security computerized data has always posed this threat to consumer privacy from governmental sources. Videotex services now present a similar threat from the private sector on an even broader range of consumer activities. Legislative protection from federal government and credit company encroachments on individual privacy has been based essentially on a disclosure concept concerning the fact of data retention or of a government request for access to such data together with the right to correct errors in the records maintained.

We have no hard data on consumer fears about privacy as they may be evoked by the new information and transactional services designed to meet consumer needs and desires. Nor do we know whether industry privacy codes such as those adopted by Warner Amex for its cable operations will alleviate what fears do exist. We need research in order to assist us in understanding the dimensions and possible resolutions of the problem.

III

SUMMARY

Consumer behavior professionals know better than anyone else the importance of information to consumers' ability to function in the marketplace. Effective functioning in the product and service markets today is a crucial building block in how consumers perceive the world around them and their own effectiveness in that world.

Academia has an opportunity to influence the responsiveness of the new electronic information systems to consumer information needs. What product and service information is put into the data banks feeding the cable and home information systems and the ease which consumers can search for that information will be critical in shaping consumer attitudes towards these systems and, more important, towards the services they offer. It is clear that consumer response to the potentials of the new interactive information technologies will depend critically on the availability of relevant information on consumers' preferred means of acquiring information and of the formats for that information which are most acceptable and valuable to them. Since much of the previous data on this question has been directed to consumer reactions to printed materials and to information provided in static formats, it is largely irrelevant to the questions which must be asked about the new technologies. The beauty of these new technologies is their ability to provide opportunities for hands-on experiments with different types of data, available in different formats and with different groups of consumers with different educational backgrounds and economic interests. Thus researchers interested in consumer information needs have a whole new world opened up to them. Their research can help business and consumer organizations to understand the type and scope of information which will be most responsive to consumer needs, and how that information is best presented and made available to consumers.

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