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IN THE POPULAR imagination, the tale of Marc Andreessen embodies a perception of the interactive industry as a cyber-boomtown. The 24-year-old developer of Netscape Communications became an overnight multimillionaire when his Web-software firm went public last August. Not everybody in the business, however, shares his luck. In fact, recent events are telling quite a different story.
In January, Compton's NewMedia -- creator of the prestigious Compton's Interactive Encyclopedia -- was shut down by its new owner, bargain-basement software distributor SoftKey International. More than 100 of about 130 employees were fired. That same month, live-action interactive CD-ROM pioneer Digital Pictures cut 32 workers; Atari, maker of the Jaguar game system, reportedly pink-slipped about 20 of its more than 50 developers. Last month, after MCI dissolved its online partnership with News Corp., with which it had agreed to reconstitute the Delphi Internet service, the joint venture axed 40 percent of its more than 515 employees. Later this month Apple will close its eWorld online service.
Difficulties are not entirely new to the volatile multimedia industry, of course. Last year, Interfilm, developer of an interactive-motion-picture system, cut 30 employees. Pioneer, which introduced an interactive-laserdisc format called LaserAction in 1993, stopped producing software for it in 1995; one of the casualties was an environmental-education game on which Robert Redford was collaborating.
These missteps, layoffs and shutdowns -- probably inevitable as firms struggle to figure out what sells -- can't be traced to a single cause. An ex-Compton's exec blames its former owner, media giant Tribune: ''It's a classic example of a big, slow, conservative company buying a fast-moving high-tech company and just driving it straight into the ground.'' Tribune's Robert D. Carr cites Compton's failure to get shelf space: ''[Compton's]was too small a player to make it happen.'' Interfilm, whose theatrical process last year showcased the critically reviled Mr. Payback, accuses business partner Sony of reneging on its contract to make two more interactive movies. The terrible reviews were irrelevant, argues Bill Franzblau, Interfilm's chief operating officer. ''The way you build an industry is over time,'' he says. ''It doesn't happen in one or two pictures.'' Sony has no comment.
Taking a similarly long view, industry analyst Gary Arlen calls interactivity ''a process, not a product'' -- a transition that won't be complete until today's interactively inclined kids grow up. That may be true. But if Marc Andreessen is rolling in bucks now, should the casualties of Interfilm or Compton's have to wait until 2001 for a paycheck?
