**i 
COMMISSION OF THE EUROPEAN COMMUNITIES 
COM(93) 156 final 
Brussels, 19 April 1993 
REPORT FROM THE COMMISSION 
TO THE COUNCIL. THE EUROPEAN PARLIAMENT AND THE ECONOMIC AND SOCIAL COMMITTEE 
IMPACT Programme 
Main events and developments in the electronic information services market 
1991 
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1. This Communication concerns the IMPACT Programme (EC plan of action for 
setting up an information services market) adopted by Council Decision 91/691/EEC 
of 12 December 1991. 
2. In conformity with Article 6 of Council Decision 91/691/EEC, a report has been 
prepared on the main events and developments which occurred in the electronic 
information services market in 1990-1991 and is attached to this Communication. 
Two similar reports, covering the state of the market in the periods 1988-89 and 1989-
90 have been forwarded to the European Parliament and to the Council as docs. 
SEC(90) 1788 final, dated 24 September 1990, and SEC(92) 1536 final, dated 2 
September 1992. 
3. This third report reviews the most important trends identified over the period 1990-
1991 within the following sectors: 
online ASCII database services, 
videotex services, 
CD-ROM publishing, 
fax-based and audiotex services. 
4. The report highlights the following major findings, some of which to some extent 
confirm those findings found in these previous reports: 
In 1990, turnover by EC-based producers and distributors of electronic 
information services was around BECU 3.1, providing employment for an 
estimated 32,000 people in 7,000 firms, of which those in the finance and 
business sectors represent around 95% of all revenues. The electronic 
information services sector on this basis is in between two other strategically 
important sectors: market research (BECU 1.9) and management consultancy 
(BECU 3.5). 
The United States continues to dominate international markets for professional 
electronic information services. US industry value in 1990 was around BECU 
6.9, more than twice the size of total EC-based activity (BECU 3.1). Typically, 
the average European company is smaller, less vertically integrated and more 
nationally-oriented than its US counterparts. Disparities continue to exist 
between the US and the Community in terms of database production and the 
number of market operators. 
Japan remains a relatively minor player in world markets for electronic 
information, but there is a strong public sector commitment to encourage 
innovation in the provision of electronic services. 
Significant differences exist between the Member States in relation to 
information market development. Particular problems are faced in the 
Community's "less-favoured" regions in relation to demand, local supply and the 
telecommunications infrastructure. 
Most information providers operate on a predominantly national basis 
delivering professional information services to their own national communities. 
Technical, linguistic, administrative and legal obstacles continue to hamper the 
development of a common market in information services. Despite the 
opportunities presented by the Single European Market, few truly pan-
European information services have been brought to the marketplace. This 
reinforces the need for market broadening and awareness raising activities, as 
supported by the INFO EURO ACCESS central strategic concept of the 
IMPACT programme. 
a. 
5. Since the publication of the previous IMO Annual Report, three important new 
developments have become apparent: 
Evidence from both supply and demand side indicators collected by the IMO 
points to a slow-down in the rate of growth of international markets for online 
information. In 1990, the European electronics information services supply 
grew by only 12.5% as against previous estimates of 20%-30% per annum. This 
slow-down appeared in the beginning of the second half of 1990 and continued 
throughout 1991. Recessionary pressures in the global economy appear to have 
depressed demand in EC, North American and Japanese markets. 
Intra-EC "trade" in online ASCII databases was the fastest growing market 
segment between 1989 and 1990 with a growth rate of 26.1% (in absolute 
terms), while exports to destinations outside the Community grew by only 6.0%. 
Merger and acquisition activity is a significant force in the European 
information market as industry actors seek to integrate information production 
and distribution activities. The number of vendors active in the European 
market is gradually declining and is predicted to fall from 7,000 firms in 1991 to 
no more than 5,500 by 1995. 
1t 
Contents 
INTRODUCTION 
EXECUTIVE SUMMARY 
1. ELECTRONIC INFORMATION IN AN INTERNATIONAL CONTEXT 
1.1 World markets and global competition 
1.2 European markets for electronic Information 
1.3 USA 
1.4 Japan 
1.5 Emerging markets in Eastern Europe 
2. EUROPE'S COMPETITIVE STRENGTHS AND WEAKNESSES 
2.1 European supply-side strengths and weaknesses 
2.2 Strengths and weaknesses 1n European telecommunications 
2.3 Reducing the gaps and imbalances within Europe 
3. 
3.1 
3.2 
4. 
4.1 
4.2 
4.3 
4.4 
4.5 
5. 
5.1 
5.2 
5.3 
5.4 TRENDS IN THE DEMAND FOR ELECTRONIC INFORMATION 
Indicators of European demand 
Trends 1n the demand for professional electronic Information 
3.2.1 Competition between Information delivery media 
3.2.2 Slowdown In demand for online ASCII databases 
3.2.3 Awareness of electronic information services by executives 
TRENDS IN THE PRODUCTION AND SUPPLY OF ELECTRONIC INFORMATION 
Indicators of European supply 
4.1.1 Structure of the European supply-side 
4.1.2 Trends in supply-side growth 
Online ASCII database services 
Videotex 
Audiotex 
Optical information media 
4.5.1 CD-ROM 
4.5.2 Multimedia information products 
4.5.3 Geographic Information systems 
DYNAMICS OF THE EUROPEAN INFORMATION INDUSTRIES 
Structural change 1n the Information industries 
Concentration of ownership: mergers and acquisitions 
Corporate strategies in the Information business 
5.3.1 Diversification and cross-media ownership 
5.3.2 Broadening the professional user base 
Completing the Internal market: challenges and opportunities 
CONCLUSIONS 
ANNEXES 
I: Definitions 
II: Acronyms and abbreviations 
III: List of publications page 
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7 
9 
11 
14 
19 
19 
20 
20 
23 
24 
26 
27 
29 
31 
34 
35 
36 
38 
39 
39 
40 
41 
41 
42 
44 
Ac 
List o-r tables a. ri ci charts 
Tat»! ©s 
page 
1. Online ASCII database production / distribution; 
worldwide, 1991. 2 
2. Electronic professional Information service revenues; 
USA; performance and estimates, 1988-1992. 3 
3. Online ASCII databases; Japan, market shares of key 
players, 1991. 5 
4. ISDN basic Unes; projected EC Infrastructure, 1994. 10 
5. Electronic information services; estimates of demand 
1n selected EC markets, end-1990 and projections to 1994. 15 
6. Electronic Information services; estimates of demand in 
selected EC markets by delivery technology, end-1990. 15 
7. Dedicated videotex terminals; installed base, 
EC, end-1990. 17 
8. Videotex; total and professional users, EC, end-1990. 18 
9. Key characteristics of electronic Information 
delivery media. 21 
10. Online ASCII database production/distribution; EC, 1991. 23 
11. Professional hosts and information providers in the EC; 
turnover by service or product type, 1989-90. 25 
12. Professional hosts and information providers 1n the EC; 
turnover by subject interest, 1989-90. 25 
13. Online ASCII databases; geographic distribution of 
turnover, 1989-90. 27 
14. International videotex standards; EC Member States, 1991. 30 
15. Premium Rate Services; prefixes and tariffs, EC, 1 May 
1992. 33 
16. CD-ROM titles published by EC-based players, 1989-1992. 35 
17. CD-ROM disk drives; installed base and projections: 
selected EC Member States, 1990-1994. 36 
Charts 
Videotex terminals; EC, end-1990. 16 
Videotex users; EC, end-1990. 18 
Database distribution; EC, 1990, staffing by function. 26 
ASCII databases; EC-based supply, 1990 revenues by type 28 
U 
INTRODUCTION 
When on 26 July 1988, the Council adopted a plan of action for 
setting up an information services market (the IMPACT programme), 
1t asked the Commission to establish an Information Market 
Observatory (IMO) 1n Luxembourg and to present an Annual Report on 
the most significant developments and trends 1n the European 
electronic information services market. This third Annual Report, 
based on data collected during 1991, reviews the state of the 
European market for professional Information services and Identifies 
the most important trends which became apparent that year. 
As before, this Report reviews developments 1n four key segments 
of the European marketplace for professional electronic information: 
o online ASCII database services 
o videotex services 
o CD-ROM publishing 
o audiotex and fax-based services 
As well as presenting detailed findings of work undertaken or 
commissioned by the Information Market Observatory, this Report 
attempts to widen the usefulness of the work by stressing the 
competitive strengths and weaknesses of European service providers. 
fe 
EXECUTIVE SUMMARY 
If Europe is to remain competitive 1n world markets for goods 
and services, and to continue to make advances in science and 
technology, organisations of all kinds must have access to the best 
possible information. The commercial value of timely and relevant 
information, especially in strategic areas of decision making such 
as Investment or market analysis, 1s Increasingly being realised 
and, as a result, a significant market for tradeable information 1s 
developing within the Community. Recorded Information comes 1n two 
forms: paper-based or electronic. The traditional publishing sector 
1s dominated by printed newspapers, periodicals and books, while the 
electronic Information sector Includes online ASCII databases, 
videotex, CD-ROM and other optical Information media, together with 
new and emerging forms of service delivery such as audlotex. Since 
the early 1980s, the market for electronic Information has evolved 
away from Its origins in science and technology towards specialised 
professional information services covering financial and company 
data, market research, bus1ness-to-bus1ness Information and news 
services. Innovation and diversity on the supply-side are essential 
to the continuing growth and stimulation of demand for Information 
services. It 1s for this reason that the Commission has placed 
considerable emphasis on co-funding a number of leading edge 
demonstration projects. 
A decade ago, the European market for professional electronic 
Information was Insignificant 1n economic terms. With an annual 
turnover in 1990 of around BECU 3.1, the electronic information 
services market is still relatively modest 1n comparison with the 
massive telecommunications (BECU 70) or the computer services (BECU 
33.5) industries. Nonetheless, the sector 1s becoming increasingly 
important in terms both of turnover and numbers of people employed -
strategically Important sectors of similar size to the electronic 
information services sector 1n Europe Include market research (BECU 
1.9) and management consultancy (BECU 3.5). 
A major impetus to the electronic information services 
marketplace will, of course, come from the general expansion of 
cross-border business activity after the Single Market is 
consolidated over the next few years. As businesses 1n all sectors 
of the economy adjust to the new realities of pan-European market 
competition and regulation, they will require more external 
Information to function effectively. This 1s likely to result 1n 
the stimulation of new demand for Community-wide Information, 
particularly 1n the areas of mailing lists, credit ratings, and 
company Information. 
Despite the evident importance of this emerging sector as a 
'trigger' to downstream productivity gains and Its contribution to 
growth 1n the European economy as a whole there has, until recently, 
been relatively little reliable Information on the size and 
structure of the information Industry, especially in the area of 
electronically-delivered services. There are many gaps 1n our 
detailed knowledge of the nature of the demand for electronic 
11 
t* 
information and of the factors that encourage and shape that demand. 
This means that newcomers to the electronic information Industry 
find it very difficult to gauge the market potential for their 
services, especially on a pan-European basis. The work of the 
Information Market Observatory is intended to give a better insight 
into the Information services market and provide the Commission with 
a basis for formulating policy in this field and for representing 
the Interests of European actors 1n international fora. 
Between 1989 and 1990, turnover in the European electronic 
information services sector grew by 12.5 per cent (unadjusted for 
Inflation) from BECU 2.8 to BECU 3.1, with finance and business 
information generating more than 95 per cent of all revenues. 
Finance alone, including information relating to stocks and shares, 
banking, foreign exchange and Insurance, accounted for more than 70 
per cent of sales. While performance 1n the sector outstripped the 
rate of growth in the economy as a whole, the 12.5 per cent measured 
growth between 1989 and 1990 contrasts with typical estimates for 
the preceding three years in the region of 20-30 per cent. A number 
of factors may account for this apparent slackening in demand, not 
least the generally difficult trading conditions 1n the second half 
of 1990 (especially 1n the UK financial services sector). Trading 
conditions in 1991 were far from Ideal and there 1s convincing 
demand-side evidence to show that the rate of growth in 
International online markets fell sharply, affected by the twin 
effects of a slowdown in financial services markets and the 
worldwide economic recession. At the same time, it can be argued 
that these same factors have actually underlined the importance of 
external information as a source of competitive advantage and this 
is likely to ensure the continuing growth of the electronic 
Information sector in the future. When drawing conclusions, 1t 1s 
Important to differentiate between cyclical and structural factors. 
The North American experience suggests that there 1s still much 
potential for market development in the longer-run, although the 
effects of cyclical down-turns might obscure this. 
Europe has a number of competitive strengths 1n world markets 
for professional Information services, not least because of the 
presence of world ranking information and media conglomerates within 
the Community and the existence of large and powerful markets for 
information in key industrial sectors such as chemicals and 
financial services. Yet, despite these strategic advantages, the 
European market for electronic Information lags behind that of North 
America, both 1n terms of supply and demand. The differences are 
striking. On the supply-side, North America accounted for almost 
59 per cent of world online ASCII database production 1n 1991, and 
its database producers and host services outnumbered its European 
counterparts by almost two to one. Compared with the United States, 
Europe also lags behind in terms of total industry value. According 
to evidence produced by the US Department of Commerce, the turnover 
by US suppliers 1n 1990 was BECU 6.9, more than twice that reported 
within the Community. Europe's other main competitor, Japan, 1s 
currently a relatively minor player in world markets for electronic 
information, but 1t has undoubted strengths 1n hardware and there 
iii 
1s a deep public sector commitment to encouraging Innovation in the 
provision of Information services. 
Europe faces greater internal barriers to sector development 
than either the USA or Japan. This, together with the relatively 
poor financial performance of many European players 1n the 
electronic Information services marketplace provides much of the 
driving force and the rationale behind the European Commission's 
IMPACT programme. 
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1. ELECTRONIC INFORMATION SERVICES IN AN INTERNATIONAL CONTEXT 
Information 1s a key factor 1n the Industrial production, 
distribution and marketing chain. For some service sectors, such 
as finance, Insurance and tourism, it has been described as a basic 
raw material, such as energy is in the manufacturing industries. 
The commercial value of timely and relevant information, especially 
in strategic areas of decision making such as investment or market 
analysis, 1s being realised by growing numbers of decision makers. 
As a result, sizeable markets for tradeable Information often 1n 
electronic form, are emerging in many of the world's developed 
economies. The European Commission's IMPACT programme alms to 
promote the exploitation of this valuable resource to the full, both 
as an aid to competitiveness and to stimulate the emergence of an 
EC-w1de electronic Information services market. 
Since the early 1980s, the market for electronic Information has 
evolved away from its origins 1n science and technology towards 
specialised Information services, delivering financial and company 
data, market research, bus1ness-to-bus1ness Information and news 
services to groups of professional users. Information services are 
currently being brought to the European marketplace In a range of 
electronic formats, from online ASCII databases, videotex, to CD-
ROM and other multimedia publications, and audiotex. It 1s likely 
that this trend towards diversity, both 1n the services themselves 
and the ways 1n which they are 'packaged' and delivered to users 
will continue, opening up market opportunities in the areas of 
leisure, education and training, and for Information services with 
a social or cultural emphasis. 
1.1 World markets and global competition 
In 1979/80, the first Issue of Cuadra's Directory of Online 
Databases catalogued some 400 databases and 59 International host 
services across the world. By 1991, there had been a more than 
tenfold Increase 1n supply-side activity, with more than 5,026 
databases available through 731 host services. As 1s clearly 
demonstrated in Table 1, world production and distribution of 
electronic databases 1s very much concentrated 1n the highly 
developed economies of North America and the European Community. 
The differences between North America and the European Community are 
particularly striking. North America produced almost 59 per cent 
of the world's publicly-available professional ASCII database 
services 1n 1991, and North American database producers and host 
services outnumbered their counterparts in the EC by almost two to 
one. In the high revenue-generating area of business databases, 
North America produced more than three times as many databases as 
Europe. North American host services enjoyed a further advantage 
over Europe 1n terms of a more highly concentrated database 
distribution sector, as Indicated by higher database to host ratios 
(7.3 1n North America; 5.7 1n Europe). 
1J 
World Numbers 
Table 1 
Online ASCII database production / distribution; worldwide, 1991. 
Database Gateway 
Databases producers Hosts services 
North America 2,956 1,223 404 57 
European Community 1,280 651 226 26 
Rest of the world 790 284 101 23 
Total 5,026 2,158 731 106 
Source: Directory of Online Databases, Cuadra/Elsevier, July 1991. 
1.2 European markets for electronic information 
In addition to the supply-side Imbalances mentioned above, 
compared with the United States, Europe faces a considerable gap 1n 
market turnover for electronic Information services, of the order 
of 2:1. While North America 1s still clearly ahead of the rest of 
the world (including Japan, Incidentally) both 1n terms of database 
production and distribution, the European Information services 
market remains fragmented by linguistic, regulatory and technical 
barriers, with service developments often taking place on a 
national, rather than a truly pan-European, basis. 
Over the past decade the European electronic Information 
services sector has been characterised by markedly uneven patterns 
of development. In 1991, the example, combined Industry value for 
the United Kingdom and France was much higher than 1n the other 
Member States, accounting for well over half of all EC turnover. 
The reasons are largely historical. France, for example, has a 
booming videotex market which achieved the remarkable figure of 
nearly 105 million hours of traffic 1n 1991. The position of the 
City of London as a key International financial centre goes some way 
to explaining the development of a significant market for real-time 
financial services in the United Kingdom and other parts of Europe. 
Germany and the United Kingdom lead the field 1n terms of database 
production, particularly 1n the strategically Important areas of 
science and technology, if videotex services are excluded. 
A major impetus to the European electronic Information 
marketplace will, of course, come from the general expansion of 
cross-border business activity as the Single European Market 1s 
consolidated over the next few years. As firms 1n all sectors 
adjust to the new realities of pan-European market competition and 
regulation, they will require a great deal of external Information 
to function effectively and efficiently. This will stimulate 
further demand for Community-wide Information, particularly 1n the 
areas of market data, mailing lists, credit ratings and company 
Information. 
1.3 USA 
The majority of the world's database producers and distributors 
are located 1n the United States. In 1991, the US had almost twice 
as many database producers as the EC (1,111 as against 651) and 
nearly fifty per cent more host or gateway services: 461 as against 
252. Assuming that overall counts of database producers are in some 
way Indicative of market demand, then the US clearly had a major 
strategic advantage over the EC, both 1n terms of the scale of 
database production and 1n the diversity of services on offer. 
The US dominance of the electronic information service sector 
extends beyond sheer numbers of services. According to the 1992 US 
Industrial Outlook published by the US Department of Commerce, the 
1990 turnover for the electronic publishing sector (online ASCII 
databases and services; CD-ROM publishing; videotex; and audiotex) 
was around BECU 6.9, which was more than twice the size of the total 
Industry value for the European Community in 1990 (BECU 3.1). Table 
2 records the growth 1n US electronic Information service revenues 
(estimated) over a five year period from 1988 to 1992. One general 
trend, evident from the Table, 1s that year-on-year growth 1n US 
markets appears to be showing signs of declining growth, albeit 
gradually. Two possible explanations may account for this slowdown. 
The first 1s the widely accepted notion that some sectors of the US 
market for electronic Information services are now saturated and 
that the Industry 1s showing signs of early maturity. Another 
proposition might simply be that sales of electronic Information 
have been adversely affected by cyclical factors in the wider 
economy. 
USA BECU and percentages 
Table 2 
Electronic professional Information service revenues; USA, 
performance and estimates, 1988-1992. 
1988 1989 1990 1991 1992 
BECU 5.0 6.0 6.9 8.2 9.6 
Annual 
growth (%) - 20.0 15.0 18.8 17.1 
Source: US Department of Commerce, 1991. 
The reasons behind the leadership of the US electronic 
Information services industry can be found in Its early development 
coupled with a number of other factors. The current US specialised 
Information sector was partially created by public Intervention. 
The stimulus was both oriented towards the creation of databases 
within the federal agencies, through the action of the Committee for 
Scientific and Technical Information (CSTI), and the financing of 
the automation of learned societies' publishing systems through the 
action of the National Science Foundation (NSF). In addition to the 
positive stimulus given to the sector in terms of public 
intervention, the sheer size of the US domestic market sustained 
significant economies of scale and the development of profitable 
telecommunications networks and information services. 
European players entered the electronic information services 
arena some years later than their counterparts in the US, although, 
naturally, this lag in market entry will become less important as 
time goes on. More importantly, their primary national markets 
offer fewer opportunities for the economies of scale which are to 
be found in the large, homogenous, English-speaking US domestic 
market. The continuing strategic advantages of the US are reflected 
in terms of exports. The US Department of Commerce estimates (1991 
figures) that around 30 per cent of revenues for electronic 
information services are attributable to export earnings. In fact, 
the figure for Europe is roughly the same proportion, so the 
advantage here is relative rather than absolute. There are several 
reasons, apart from language, why the US is successful 1n export 
markets. One is that US suppliers tend to be very well represented 
overseas and the presence of a large number of US foreign 
subsidiaries has certainly been a facilitating entry factor in 
European markets for both US hosts and information providers. 
Another factor is that US suppliers are more and more keenly aware 
of the need to find overseas customers in order to increase their 
chances of surviving in an increasingly competitive environment. 
US suppliers have clearly identified International prospects as the 
key to future growth, with the EC and Japan as the prime targets. 
1.4 Japan 
According to the Japan Information Services Association (JISA), 
the total revenues of the Japanese database industry were around 
MECU 1,037 in 1989, compared with total revenues flowing to EC-based 
producers and distributors that same year of MECU 2,799. The 
Japanese supply-side was dominated by seven major players in 1991, 
who between them achieved a remarkable 87 per cent share of the 
total Japanese market (Table 3). The largest electronic information 
markets in Japan are 1n the financial services; patents; and 
scientific, technical and medical (STM) sectors. 
While Japan is currently a relatively minor player in world 
markets for electronic information, there is a very deep public 
sector commitment to developing the electronic information services 
sector. The main action lines of the Ministry of International 
Trade and Industry (MITI) in this area may be summarised as follows: 
supporting database production, often at a small-scale local level; 
research and development activities aimed at making electronic 
databases easier to use; support for the development of more 
efficient database services; the production of public sector 
database services; and the expansion of government-owned data 
supply. A public sector Database Reserve Fund was established in 
1987 to support the massive Initial investment necessary for 
database production. Further private support for database 
production 1s provided through the Japan Development Bank which 
provides low-interest financing for capital and other loans to those 
producing databases in the private sector. 
Japan Percentages 
Table 3 
Online ASCII databases; Japan, market shares of key players, 1991. 
Market 
share Market 
sector 
Quick 54.0 
Ninon Kelzai Shlmbun 9.0 
Kyodo Press 6.5 
JAPIO 6.5 
JICST 5.0 
Maruzen 3.0 
Kinokuniya 3.0 Financial services 
Financial services 
Stock market 
Patents 
STM 
Foreign database agent 
Foreign database agent 
Source: Electronic Publishing Services Ltd, 1991. 
It is possible that Japan will emerge as a major force in 
electronic information, but possibly by adopting a strategy which 
capitalises on their undoubted strengths 1n hardware. By 
Integrating data and hardware 1n convenient new packages, such as 
electronic books and games (Nintendo, for instance), the Japanese 
may be able to reap significant market opportunities for the 
delivery of electronic information. The recent wave of Japanese 
acquisitions of foreign 'software' concerns, like the takeover of 
CBS by Sony may be early indicators of their Intentions. 
The close relationships between government and industry 1n Japan 
1s another factor to consider. Two recent examples of this 
closeness both emphasise the medium- to long-term threat which Japan 
may pose 1n International markets for electronic Information. The 
first is the designation by the Ministry of International Trade and 
Industry (MITI) and the Ministry of Post and Telecommunications of 
more than 60 towns and areas outside Tokyo as testing grounds for 
the use of advanced Information technologies; 1n effect creating a 
series of experimental 'Information societies' with considerable 
investment in human skills. In June 1991, MITI announced that 1t 
Intended to make a large investment (MECU 24) by a 'Hyper Network' 
laboratory. This 1s an exercise to develop videotex and advanced 
telecommunications for Japanese industry which will Involve the 
cooperation of France Télécom. 
While there 1s clearly a trend towards the production of 
localised database products and greater self-sufficiency Japan still 
has to overcome many problems before competing 1n the global 
information marketplace on an equal basis. The most obvious of 
these 1s Japanese Itself and the considerable costs of translation 
in other languages. In the meantime, Japanese demand 1s 
characterised by a high degree of dependence on domestically-
produced sources of data. It 1s estimated, for example, that 
spending on foreign databases 1n 1989 accounted for only one-third 
of total expenditure, but two-thirds of available services. 
1.5 Emerging markets 1n Eastern Europe 
The dramatic changes which have taken place 1n the former 
Eastern Bloc or former Council for mutual Economic Assistance (CMEA) 
countries have provoked considerable Interest 1n the medium- and 
long-term opportunities for growth 1n information services trade 
with these countries, particularly for EC-based suppliers. However, 
there are a number of Infrastructural problems which mean that the 
emergence of information services markets 1s likely to take some 
considerable time. Whereas Western Europe has benefitted from 
diverse and efficient sources of Information supply, the former CMEA 
countries have had to rely on state-controlled agencies to gather 
and disseminate data.. In the post-war years Eastern Europe has 
lagged behind the West 1n nearly all aspects of telecommunications 
and information technology and massive Infrastructure problems 
persist within the former CMEA countries. The development costs to 
remedy these structural problems have been estimated, by one 
industry commentator to be of the order of BECU 350. Apart from the 
lack of a we 11-developed information Infrastructure, there are other 
factors which militate against short-term entry Into International 
markets such as political uncertainty and a lack of hard currency. 
2. EUROPE'S COMPETITIVE STRENGTHS AND WEAKNESSES 
2.1 European supply-side strengths and weaknesses 
Europe has a number of competitive strengths in world markets 
for professional information services, not least because of the 
presence of world ranking Information and media conglomerates within 
the EC. Many of these have been active in the field of electronic 
Information services for more than a decade: Reuters; Pearson-
Financial Times; Reed International; Elsevier; and VNU, to name a 
few. In addition, the Information services sector 1n Europe is 
characterised by large and well-established markets for professional 
electronic information in such key Industrial sectors as chemicals, 
pharmaceuticals, and financial services. Yet, despite these 
advantages, the market for professional electronic services 1n 
Europe remains relatively underdeveloped 1n comparison with North 
America, which, as has already been seen, enjoys considerable 
advantages over Europe. 1n terms both of database supply and demand 
for Information 1n electronic format. The 1989/90 co-ordinated 
survey of hosts and Information providers (CEC/EIIA) revealed that 
almost 49 per cent of European respondents were not operating at a 
profit. The mismatch between the relatively poor performance of 
European players in the electronic Information services arena and 
the considerable market potential which exists, especially after 
1992, has provided much of the driving force and rationale behind 
the Commission's two IMPACT programmes. 
European players face strong competition from non-EC operators 
1n a number of specialised (or 'vertical') markets, of which 
chemistry 1s perhaps the most notable example. In vertical, as 1n 
more general interest (or 'horizontal') market sectors - for 
products such as dictionaries or news services - the realisation of 
scale economies will Increasingly determine competitive advantage. 
North American suppliers are 1n a strong position to develop scale 
economies since their home markets are large and effectively 
monolingual. 
Certain segments of the market for electronic Information are 
global by their very nature. This is particularly true 1n the area 
of scientific and technical information, since research 1n these 
areas knows few national boundaries. While many of the largest 
scientific and technical databases are North American, European 
providers still command large shares 1n a number of global vertical 
markets (such as Derwent in the case of patent Information and 
INSPEC in the areas of electronics, computing and physics). 
Similarly, the trend towards the Increasing economic Interdependence 
between the countries of Europe and other trade blocs means that 
markets for macro-economic data and financial information services 
are becoming Increasingly International 1n scope. 
Creating and maintaining databases Involves considerable time 
and Investment: in the EC much of this effort often tends to be 
concentrated in the production of reference databases, often in STM 
subjects. While Europe has a lead over the USA 1n the number of 
bibliographic databases produced, US databases tend to be much 
bigger (on average about three times bigger). This means, in 
absolute terms, that the USA produces many more database records 
than the EC. In addition, the US has a considerable lead over 
Europe in the production of full text and other 'source' databases. 
So, while the EC produces almost as many scientific and technical 
databases as the United States, it produces many fewer news and 
current affairs services (despite the presence of well-established 
newspaper and other traditional publishers on European soil). The 
production of bibliographic database services, aimed at 
intermediaries in libraries and documentation services 1n research 
organisations and in the larger public and private sector 
institutions, is still a dominant feature of supply-side activities 
in the EC. If Europe is to redress the Imbalances in the demand for 
professional electronic information, then the solution must He with 
marketing services directly to end-users: to financial directors, 
jurists, engineers, and marketing executives. 
A further issue regarding the competitiveness of the European 
supply-side relates to the optimal number of distribution outlets 
for electronic services. Critics have long argued that Europe 1s 
oversupplied with national host services and that this factor tends 
to exacerbate market fragmentation and work against the realisation 
of critical mass demand. In many sectors, such as legal and 
statutory information,information on company solvency, or market 
intelligence, supply is heavily dominated by national operators. 
In other words, the main database services have developed along 
national lines, to serve national rather than international markets. 
On the other hand, these same factors tend to work against the entry 
of American operators into a European marketplace which continues 
to be dominated by dozens of medium-sized European suppliers 
operating essentially within their own national markets. To reach 
international markets in a number of key subject areas, providers 
must be willing to invest heavily in data collection, form strategic 
alliances, or gain access to the information base of foreign 
companies through acquisition or merger. These are barriers which 
must be crossed if pan-European information services are to be 
established. 
Paradoxically, many of Europe's strengths are, at the same time, 
also weaknesses. For example, the existence of a highly developed 
and efficient supply structure for traditional printed business and 
professional Information in many EC countries 1s a factor which may 
contribute to a relatively underdeveloped market for electronic 
information. Further evidence of Europe's simultaneous strengths 
and weaknesses in the global information services marketplace can 
be marshalled by observing the commercial strategies of some of the 
larger European media conglomerates. In the early 1980s, several 
Dutch and British media corporations invested aggressively 1n the 
US in preference to the EC, taking the view that the likely returns 
on Investment were very uncertain 1n Europe. British publishers 
have tended to develop strategies which are 'transatlantic' in 
nature, a natural outcome of their shared language and good trading 
8 
relations with the US. Dutch publishers, confined to a small 
national market, have tended to grow by acquisitions both In the US 
and, more recently, in Europe. 
2.2 Strengths and weaknesses in European telecommunications 
The European Community's vision of a market without obstacles 
to the free movement of goods, services, capital and people, to be 
achieved by the end of 1992, needs to be supported by a flourishing 
Community-wide market 1n professional information services and by 
an advanced telecommunications infrastructure which can deliver 
those services competitively. As well as stimulating Information 
market development through a variety of mechanisms under the IMPACT 
programme, the CEC has a significant role to play in shaping the 
legal and regulatory environment within which pan-European 
electronic Information services can flourish. In the wake of 
telecom's liberalisation, an EC-w1de regulatory framework 1s needed 
to ensure free competition. The framework which 1s currently being 
laid down will ensure that former monopoly operators do not abuse 
their dominant position 1n the market, through mechanisms such as 
cross-subsidy or the Imposition of proprietary standards. Similar 
processes of liberalisation have been taking place in the United 
States with the deregulation of AT&T. This has been the subject of 
much public debate, not least because the American press and media 
are understandably reluctant to share the Income from electronic 
advertising with the telephone operators. Currently, with the 
recent lifting of restrictions, five of the seven Regional Bell 
Operating Companies (RBOCs) are engaged in the delivery of a range 
of transport and Information services, Including electronic yellow 
pages and audiotex services. The full significance of these 
developments has yet to be seen, but analysts think 1t 1s likely 
that the RBOCs will seek entry to a number of foreign 
markets,Including European ones. In Europe, many of the large 
national operators have already entered the information services 
marketplace and are Involved 1n the provision of host services, 
videotex and kiosk services, gateways, electronic messaging 
services, and electronic telephone directories and Yellow Pages. 
While a more liberal regulatory environment within Europe is 
beginning to show signs of assisting Information market development, 
progress in the technical area of developing a European broadband 
network has been much slower. The current revolution in 
telecommunications technology has considerable implications for the 
way that Information services will be delivered 1n the future. 
Broadband communications, which enable huge quantities of data to 
be transmitted at high speed, make 1t feasible to Integrate text, 
voice, sound, and Images and so open up new markets for Innovative 
service providers, 1n areas such as video conferencing and training. 
Major progress has been made on Installing an Integrated 
Services Digital Network (ISDN) Infrastructure within the Community, 
but a great deal remains to be done. By 1990, four Member States 
were already offering commercial services, but partly as a result 
of a lack of agreement over standards, the ultimate goal of 
replacing the analogue public switched telephone network with a 
fully-fledged pan-European ISDN has been delayed. It is now four 
years since the twelve PTOs operating in the EC agreed to implement 
a European ISDN infrastructure by 1992. While basic ISDN lines are 
already installed in most European countries, the rate of progress 
is highly uneven, as can be seen in Table 4. Naturally, this has 
implications for the development of an advanced information market 
across the Community. 
EC Member States Numbers 
Table 4 
ISDN basic Unes; projected EC Infrastructure, 1994. 
Current ISDN Basic lines per 
population(a) Unes 000 population 
(million) by 1994 by 1994 
Belgium 10.0 140,000 14.0 
Denmark 5.1 125,000 24.5 
Germany 79.6(b) 1,250,000 15.7 
Spain 39.0 420,000 10.8 
France 56.4 1,100,000 19.5 
Greece 10.1 170,000 16.8 
Ireland 3.5 30,000 8.6 
Italy 57.6 825,000 4.3 
Netherlands 15.0 280,000 18.7 
Luxembourg 0.4 7,000 17.5 
Portugal 19.9 60,000 6.1 
UK 57.4 1,000,000 17.4 
EC 344.0 5,407,000 15.7 
(a) OECD Employment Outlook, 1990. 
(b) For unified Germany. 
Source: Yankee Group, 1992. 
ISDN 1s not the only technology around which new forms of 
Information service delivery will develop. There is an intention 
that an even more advanced Integrated Broadband Communications (IBC) 
network will be set up within the Community. The IBC network could 
take over from ISDN which does not have a broad bandwidth and 1s 
therefore unsuitable for advanced multimedia services. The 
prospects are that Integrated Broadband communications (IBC), 
currently still at the developmental stage within the context of the 
Commission's RACE (Research & Development 1n Advanced Communications 
1n Europe) programme should be available commercially from about 
10 
1995 onwards. If these assumptions hold good, then another major 
enabling element 1n the European information environment will be in 
place before the end of the decade. 
In its Green Paper on the development of a common market for 
equipment and services, issued 1n 1987, the CEC outlined a programme 
of regulatory change meeting the challenges of the Single Market of 
1992 and of technological development. The Green Paper argues that 
there must be an opening up of the public telecommunications 
infrastructure to allow equality of access of both private service 
providers and the public network operators, and that equality of 
access should be based on clear common rules and practices. The 
common principles regarding the general conditions for the provision 
of networking Infrastructure to users and competitive service 
providers, in particular for transborder services, have become known 
as Open Network Provision (ONP). The Council directive on the 
establishment of the internal market for telecommunications services 
through the implementation of ONP identifies the following priority 
areas where ONP conditions are to be developed: leased Unes; voice 
telephony; packet data services; and ISDN. Users and analysts agree 
that ONP 1s an Important catalyst to change but that progress has 
so far been slower than expected. In this respect, ONP has still 
some way to go in order to achieve Its main objective; to give 
competitive service providers and users uniform access to Europe's 
public networks. 
As a result of action by the Commission of the European 
Communities as well as through market forces, further convergence 
and harmonisation of standards in telecommunications will continue 
to be beneficial forces in the European marketplace for electronic 
Information, although inevitably, new equipment and technologies 
will create new disparities and divergences. While considerable 
progress has been made, transparency in the videotex marketplace 
remains elusive. Even here, however, technical developments on two 
broad fronts are helping to break down some of the barriers to the 
pan-European market acceptance of videotex. One is the increasing 
network transparency which gateway solutions can offer. The other 
relates to the availability of multistandard terminal hardware and 
the continuing diffusion of the personal computer and multistandard 
software Into the home and office environment, developments which 
have a significant role to play. 
2.3 Reducing the gaps and Imbalances within Europe 
Although in recent years there has been a steady and well 
documented growth 1n the European electronic information 
industry,this growth has tended to be concentrated within the more 
developed countries such as France, Germany and the United 
Kingdom. Over the past decade, the European information market has 
been characterised by a markedly uneven development of products and 
services, with some countries showing a high commitment to 
electronic services, whilst others are largely Ignoring them. 
Between Individual Member States there are significant variations 
given to the various technical options. This shows itself, for 
11 
example, in the heavy commitment given in France to public videotex 
and, 1n the UK, in the emphasis on a market preference for online 
ASCII databases and audiotex services. 
Particular problems are faced by the 'less favoured' regions 
(LFRs) of the Community, who are not as yet major participants 1n 
the electronic information services market,either as producers or 
users. For strategic business reasons, such as minimising 
telecommunications costs or needing to maintain close contacts with 
major customers, hosts tend to be located in the major metropolitan 
areas of the Community; equally, telecommunications carriers tend 
to concentrate their new network investments and services in the 
central markets of national economies. Another difficulty 1s that 
divergences between telecommunications tariff structures have 
further reduced the demand for electronic information within the 
LFRs. There is a danger, therefore, that Information market 
development 1n the LFRs will continue to lag behind the Community 
as a whole, and that their prospects for improved economic and 
social development through the exploitation of electronic 
information services will fade. This underlines a continuing need 
for the market broadening activities initiated by DG-XIII under the 
IMPACT programme's INFO EURO ACCESS theme, which 1s designed to 
improve the accessibility of Information at the European level for 
all interested parties. 
Differences in the political and regulatory environment, 
especially in the field of telecommunications, coupled with economic 
imbalances between the various Member States of the EC have 
contributed to this uneven development - and the moves to further 
deregulate telecommunications and so favour the emergence of value 
added networks, actually runs the risk of widening rather than 
closing the gap between Member States. These disparities are 
particularly acute in the case of the 'less favoured' regions of 
the EC, those at the geographical periphery and those which lack an 
adequate telecommunications infrastructure, the equipment, and the 
know-how to exploit electronic information services to the full. 
Advanced telecommunications are currently at the forefront of 
regional economic development. One of the key alms of EC 
telecommunications policy is to reduce the disparities in 
development between the various regions of the Community. In an 
attempt to boost the usage of data communications 1n some of the 
Community's poorest regions, the European Commission set up a 
initiative 1n 1991 known as Télématique^ jointly managed by the 
regional development (DG-XVI) and telecommunications (DG-XIII) 
directorates. This Initiative is designed to reinforce and broaden 
the progress made under the Commission's STAR programme. The 
emphasis of Télématique 1s put on services, specifically on data 
communication applications. As regards the development of data 
communication services in small- and medium-enterprises (SMEs), the 
Initiative is intended to assist access to the same databases and 
information services as those available in more central locations 
1n the Community. A further aim is to help firms to work with or 
become suppliers of data services 1n the fields, for example, of 
design, accounting, financial management, joint ordering, and stock 
12 
management. Under the Télématique scheme, eligible regions are 
those with a per capita domestic product less than 75 per cent of 
the European average (areas which qualify Include Greece, Ireland, 
Portugal, together with the poorest regions of France, Spain, Italy, 
and the UK). 
13 
3- TRENDS IN THE DEMAND FOR ELECTRONIC INFORMATION 
3.1 Indicators of European demand 
The emergence of an identifiable, 1f 1ll-def1ned Information 
Industry has not been accompanied by the collection and publication 
of regular, standardised Industry statistics. Mapping and measuring 
the electronic information services sector presents many problems 
of definition and classification and nowhere 1s this more apparent 
than in relation to demand-side indicators. It 1s for these reasons 
that the Information Market Observatory was established to further 
the collection of Industry data and provide a deeper understanding 
of the market. 
The total demand for electronic information within the EC 1s 
the sum of imported Information products and services plus local 
consumption of EC-produced electronic information. Unfortunately, 
electronic Information by-passes export and Import regulations, 
customs posts and tariffs and therefore goes unrecorded 1n national 
trade statistics. At the same time, online databases are accessible 
internationally through an increasingly complex world-wide system 
of host computers, gateways and data communications networks, making 
1t virtually Impossible to produce any meaningful figures for cross-
border transactions. Similarly, 'portable' databases carried on 
media such as optical disk or magnetic tape are very easily shipped 
across national frontiers. 
As a result, there 1s a massive gap in our detailed knowledge 
of the nature of demand for electronic information and the factors 
that encourage and shape that demand. In the absence of adequate 
mechanisms to capture demand-side Indicators, policy makers and 
investors have to rely on gross estimates of market size and shape. 
Despite these qualifications, the following sections will attempt 
to present an overview of the current state of the European market 
and key trends in demand for electronic Information, based on 
available information. 
Demand for electronic information services (including online 
ASCII databases; videotex; audiotex; and broadcast Information 
services) 1n Western Europe was estimated at more than BECU 3.5 in 
1990. Table 5 gives a broad Indication of relative market size 1n 
selected EC countries and confirms that the largest European 
national markets for electronic Information services are located 1n 
the United Kingdom, France and Germany. Finer detail 1s given in 
Table 6 of the level of European demand for the various delivery 
technologies which are included in the total market figures 
presented in Table 5. 
14 
Western Europe MECU 
Table 5 
Electronic information servlces(a); estimates of demand in selected 
EC markets, end-1990 and projections to 1994. 
end-1990 estimates 1994 projections 
Germany 295 1,000 
Spain 105 315 
France 950 1,685 
Italy 195 685 
Netherlands 260 435 
UK 1,205 1,960 
Western 
Europe(b) 3,535 7,480 
(a) Includes online ASCII databases; videotex; audiotex; and 
broadcast Information services. 
(b) Total demand across EC and EFTA countries. 
Western Europe MECU 
Table 6 
Electronic Information services; estimates of demand in selected EC 
markets by delivery technology, end 1990. 
Online Broadcast 
ASCII Videotex Audiotex information 
databases services services services 
Germany 270 20 5 * 
Spain 90 15 * * 
France 285 505 155 5 
Italy 170 15 10 * 
Netherlands 160 * 100 * 
UK 860 15 240 90 
Western 
Europe(a) 2,325 580 530 100 
(a) Total demand across EC and EFTA countries. 
Source (Tables 5 and 6): Communications & Information Technology 
Research Ltd, 1991. 
15 
While demand indicators for online ASCII database services are 
very difficult to compile, for the reasons already mentioned, the 
situation is very different with respect to videotex network 
services. The reasons for this are threefold. First, European 
markets for videotex information tend to be almost exclusively 
national. Secondly, unlike online ASCII services which may be 
accessed through a standard personal computer, a very high 
proportion of users access services by means of dedicated videotex 
terminals (as may be seen in the pie chart). 
Videotex terminals; EC, end-1990 
(thousand units) 
Dedicated tor minais 
6140 
Fmulatcd PC: 
Sourco Tablo A 
Thirdly, videotex services have typically been offered by the 
national telecommunications network operator in most European 
countries. This feature of videotex usage makes it possible to 
establish indicators of the installed terminal base (Table 7). The 
total European installed base of videotex terminals is estimated to 
have reached more than 6.6 million by the end of 1990. Comparing 
this figure with similar indicators for North America and Japan, it 
is possible to say that in 1990, on average, there was one videotex 
terminal for every 61 inhabitants in Europe, compared with 1 for 
every 131 inhabitants in North America and 1 for every 1,134 
inhabitants in Japan. However, figures for the European installed 
base of videotex terminals are distorted by France's massive 
contribution of 87 per cent of the total. 
However, taking into account the shortcomings and disparity of 
sources, comparisons between countries should be made with prudence. 
The most critical areas for discrepancies relate to how the figures 
for the installed base of terminals is presented, where three main 
considerations need to be taken Into account: 
o national estimates do not clearly distinguish between 
terminals and users; 
16 
1n most EC countries, the national operators provide estimates 
of the number of dedicated videotex terminals, but do not 
include estimates of the number of general purpose personal 
computers running videotex emulation software; 
in some EC countries, the videotex operators estimate the 
installed base in terms of the number of subscribers; 1t 
should be noted that the number of users may be greater than 
the number of subscriptions, also that there may be more users 
than terminals. 
EC Member States Numbers, percentages and dates 
Table 7 
Dedicated videotex terminals; Installed base, EC, end-1990. 
Installed base of 
videotex terminals(a) Share of total EC 
Installed base (%) Year service 
commenced 
Belgium 
Denmark 
Germany 
Spain 
France 
Greece 
Ireland 
Italy 
Luxembourg 
Netherlands 
Portugal 
UK 
EC 
(a) 
(b) 
(c) 
(d) 
(e) 7,700 
6,000 
130,000(b) 
60,000(c) 
5,607,000(d) 
1,000 
3,000 
145,000 
1,000 
25,000(6) 
3,500 
160,000 
6,149,200 0.12 
0.09 
3.91 
2.25 
87.41 
0.02 
0.05 
2.18 
0.02 
1.50 
0.05 
2.40 
100.00 1986 
1987 
1983 
1986 
1980 
1990 
1988 
1986 
1986 
1980 
1989 
1979 
Dedicated terminals only. 
Plus an additional estimated 130,000 videotex-emulated PCs. 
Plus an additional estimated 90,000 videotex-emulated PCs. 
Plus an additional estimated 210,000 videotex-emulated PCs, 
Plus an additional estimated 75,000 videotex-emulated PCs. 
Source: Information Market Observatory. 
Despite the inevitable limitations in these indicators, they 
remain useful in conveying a sense of the overall size and shape of 
European videotex markets. Videotex was initially designed to 
simplify the access of consumers to information and transactional 
services, with households having a link installed between their 
televisions and telephones. 
17 
EC Member States Numbers and percentages 
Table 8 
Videotex; total and professional users, EC, end-1990. 
Belgium 
Denmark 
Germany 
Spain 
France(a) 
Greece 
Ireland 
Italy 
Luxembourg 
Netherlands 
Portugal 
UK Total number 
of users 
7,700 
6,000 
260,000 
150,000 
5,256,300 
1,000 
3,000 
145,000 
1,000 
100,000 
3,500 
100,000 Professional 
users 
7,315 
4,740 
156,000 
90,000 
2,628,150 
1,000 
3,000 
72,500 
1,000 
75,000 
1,750 
80,000 Share of 
professional 
users (%) 
95 
79 
60 
60 
50 
100 
100 
50 
100 
75 
50 
80 
EC 6,033,500 3,120,455 52 
(a) Ten per cent of Minitels are inactive (France Télécom). 
Source: Information Market Observatory, 1992. 
Videotex users; EC, end-1990 
(millions) 
Professional users Domestic users 
Source: Table 8. 
The dissemination of low cost terminals in France created a 
mass-market of consumer services, which has been useful in the 
design of professional services. Although Té lé tel traffic is 
18 
currently split more or less evenly between professional and 
consumer or general interest services, according to France Telecom, 
1t 1s professional use which is the fastest growing sector. In 
other Member States professional usage dominates, as can be seen 
from Table 8 and the accompanying chart. 
3.2 Trends 1n the demand for professional electronic information 
3.2.1 Competition between information delivery media 
From a single act of keyboarding, a database publisher may 
create a series of information products and services in formats 
ranging from print-based products to data broadcasting services. 
The impact of alternative electronic Information media and their 
acceptance in the marketplace is complex, but it 1s of enormous 
interest for the industry. Although very difficult to quantify, it 
1s becoming evident that alternative information media, notably in 
the form of CD-ROM and in-house networked systems, are beginning to 
have a significant impact on the marketplace for electronic 
Information. Table 9 attempts to Identify some of the key 
characteristics and differences between the main forms of electronic 
information delivery considered in this Report: online ASCII 
databases; videotex; audiotex; and CD-ROM. While there are clear 
advantages and disadvantages associated with each delivery 
technology, they are not necessarily 1n direct competition with one 
another. Indeed, the different forms of delivery may be highly 
complementary. A good example 1s the relationship between CD-ROM 
and online ASCII database services, where there may be considerable 
advantage to an organisation to have both modes of access to what 
is essentially the same data. CD-ROM offers the possibility of easy 
and frequent access to key sources at no incremental cost, while 
online services circumvent the slow updating cycles of optical 
media. 
Electronic information services are pervasive throughout the 
whole economy and are produced across a very broad range of 
Industries. A corollary of this is that there is an increasing 
diversity in the number and types of players who operate in 
information service markets; from the 'traditional' online sector, 
to publishers, télécoms operators, and the service industries 
themselves. In particular, the low entry costs associated with 
optical publishing have been a significant factor tempting many new 
players into the marketplace. At the same time that the 
'traditional' online sector is facing increased competition from 
these new entrants, their market position with their end-users is 
being gradually eroded by the advent of gateway services and local 
area networks (LANs). The connect-hour approach to pricing, 
customer support, and the protection of copyright all take new 
dimensions when users gateway out of a LAN and onto an online host. 
If LANs represent a challenge to online services, then they offer 
both a threat and an opportunity to the CD-ROM industry. To deal 
with the opportunity first, CD-ROM is a natural file-server, and an 
ideal tool to place at the hub of a distributed network. The threat 
19 
is the difficulty of establishing suitable pricing mechanisms and 
the potential loss of revenue as many more users are able to access 
the data (similar problems are faced by suppliers of software for 
LAN-based applications). This issue is being addressed through 
multi-user site licensing agreements. The main point is that LAN 
technologies are here to stay and that the Industry must to learn 
to adapt to new market conditions. 
3.2.2 Slowdown in demand for online ASCII databases 
One notable development the European marketplace for electronic 
information in 1991 was evidence of an apparent decline in 
international demand for online ASCII database services. It is 
difficult to establish the full extent to which the demand-side 
suffered and whether this represented a slackening in the rate of 
expansion of the market, or a real fall 1n market value over 
previous years since, at this stage, the evidence is partial. There 
were several reports in the trade press, for instance, which 
indicated that international demand (as measured by total connect 
hours) for a number of market leaders 1n the text and bibliographic 
services area decreased by as much as 30 to 36 per cent 1n the first 
six months of 1991, compared with the same period in 1990. A re-
analysis of the results of the CEC/EIIA co-ordinated survey for 
1989 and 1990 by the UK-based Policy Studies Institute revealed that 
two Important factors contributed to the recent downturn in demand 
experienced by EC-based suppliers between 1988/89 and 1989/90 - slow 
growth in the UK market (compared with the EC as a whole) and 
negative real growth in US sales. 
It is only possible to speculate what causal factors might 
explain this slowdown. Certainly, general trading conditions were 
far from ideal during 1991 and this may well have had a negative 
effect on information purchasing behaviour. At the same time, there 
is an argument that the recessionary pressures being felt 1n most 
highly developed economies are likely to Increase the importance 
attached to timely external information - early indications from the 
financial services sector suggest that demand held up well in 1991 
despite the recession. The growing recognition of the strategic 
value of external information is likely to ensure the continuing 
healthy growth of the online database sector as a whole. 
3.2.3 Awareness of electronic information services by executives 
It is clear that the further use of electronic information 
services will in the first instance be evident in the professional 
and business sectors. Just as PCs were Initially regarded as being 
of no or little use to executives, over time with more exposure and 
with the development of more user-friendly Interfaces, a wide range 
of information technology is now 1n daily use by the office 
executive, across a wide range of industry sectors. Yet a survey 
of a European panel of executives conducted by the IMO in 1991 
Indicated that two-thirds of executives do not currently use 
electronic information services. The reasons given for non-use 
20 
Table 9 
Key characteristics of electronic information delivery media 
Online ASCII 
databases Videotex Audiotex CD-ROM 
Minimum 
hardware 
requirements 
Mode of 
access 
Training 
requirement 
Graphics 
capability 
Typical 
mode of 
Interrogation 
Frequency of 
updating 
Mode 
of 
delivery 
Data volume 
limits 
(storage) 
Data volume 
limits (trans­
mission) 
Method 
of 
payment 
Method 
of 
billing PC 
plus 
modem 
online 
high 
low 
command 
language 
or menu 
frequent 
character 
by 
character 
unlimited 
high to 
medium 
Invoice 
from 
service 
provider dedicated 
terminal 
or emulat­
ing PC 
online 
medium 
medium 
menu 
screen 
by 
screen 
medium 
billing 
from 
kiosk 
operator DTMF 
telephone 
handset 
online 
low 
n/a 
touch 
tone 
/voice 
recognition PC plus 
disk 
drive 
offline 
medium 
high 
command 
language 
or menu 
frequent frequent infrequent 
analogue 
voice 
unlimited limited 
combination 
of subscrip- usage 
tion & usage only very 
limited 
billing 
from 
kiosk 
operator 
usage 
only character 
by 
character 
limited 
to 0.65Gb 
high to 
medium 
subscrip­
tion 
basis 
fixed price 
(1ndependent 
of usage) 
Source: Information Market Observatory. 
21 
include the difficult access procedures for logging 1n to database 
hosts and expensive data retrieval. In general, it seems that many 
executives prefer to rely on traditional sources of information such 
as reading hard-copy journals and attending trade fairs or 
exhibitions in preference to new information technologies. This is 
likely to shift in the future, however, since 87 per cent of 
executives anticipated an increasing requirement for external 
information services in the future. In fact, 73 per cent of the 
non-users in the panel said that they intend to use online services 
1n the future. While it can be said that European executives appear 
to appreciate the usefulness of electronic information services 
(especially in France), there is generally a considerable degree of 
Ignorance of the opportunities presented by videotex, audiotex and 
kiosk system facilities. If the market for professional and 
business electronic information services is to expand beyond the 
ranks of information professionals and documentalists, there is 
clearly much to be done in terms of raising awareness among 
executives of the benefits of using electronic information services. 
22 
A- . TRENDS PRODUCTION ELECTRONIC IN THE AND SURRLY OF INFORMATION 
4.1 Indicators of European supply 
In this section, Indicators of the supply-side of the European 
Industries are presented, focusing on the direct contribution which 
they make to the economy, as opposed to market size which Includes 
European demand for foreign (non-EC) products and services. Table 
10 presents a series of broad indicators of the level of database 
production and distribution activity in each of the EC Member States 
in mid-1991. 
EC and World Numbers 
Table 10 
Online ASCII database production / distribution; EC, 1991. 
Databases Database 
producers Host 
services Gateway 
services 
Belgium 
Denmark 
Germany 
Spain 
France 
Greece(a) 
Ireland 
Italy 
Luxembourg 
Netherlands 
Portugal 
United Kingdom 
EC 
World 
(a) 47 
28 
233 
102 
275 
2 
110 
23 
51 
9 
400 
1,280 
5,026 23 
25 
121 
45 
173 
2 
32 
5 
32 
8 
185 
651 
2,158 5 
16 
20 
25 
63 
19 
2 
16 
9 
51 
226 
731 3 
1 
2 
13 
26 
106 
Although Cuadra does not Identify any Greek online ASCII 
services, at least six organisations are known to be actively 
Involved 1n the CD-ROM business (1992) as publishers or 
information providers (EIIA). 
Source: Directory of Online Databases, Cuadra/Elsevier, July 1991. 
Although 1n recent years there has been a steady growth 1n the 
European electronic Information Industry, supply-side activity 
23 
remains highly concentrated in the more developed countries of 
France, Germany and the United Kingdom. Nearly 74 per cent of EC 
database producers are located in these three countries, similarly 
54 per cent of host services and 69 per cent of gateway services. 
Counts of databases and information Industry players may be useful 
as broad indicators of the supply-side activity, but they are a 
limited tool since they say little about the impact of database 
supply on the economy, nor about the richness and diversity of 
information services. Much more detailed and valuable information 
about the size and shape of database supply can be obtained by means 
of carefully designed industry surveys. Through the joint efforts 
of the European Commission's Information Market Observatory and the 
European Information Industry Association (EIIA), a valuable base of 
supply-side data is being built up through an annual co-ordinated 
survey of hosts and information providers. The latest CEC/EIIA 
survey, provides highly comparable data for the two calendar years 
1989 and 1990 and allows an analysis of European supply-side 
activities in terms of human resources and turnover broken down by 
delivery medium, subject Interest, service/product type, and 
geographic distribution. 
4.1.1 Structure of the European supply-side 
The results of the CEC/EIIA co-ordinated survey confirm that 
online ASCII databases are still the most dominant (and fastest 
growing) component of the European online information services 
sector, accounting for revenues worth 2,054 MECU in 1990 or 78 per 
cent of total online revenue. Professional videotex services are 
also a significant area, and are estimated to account for between 
16 and 18 per cent of all online service revenues in EC countries 
(the remaining 5 per cent is attributable to a range of 
'unclassified' online services). 
A significant finding of the CEC/EIIA survey, highlighted 1n 
Table 11, is the contribution of offline services, including such 
activities as optical publishing, document delivery, consultancy and 
information brokerage services to the revenues earned by electronic 
information industry players. Turning to the sources of revenue by 
subject (Table 12 and the accompanying pie chart), it is clear that 
finance and business-oriented information services together 
accounted for nearly 96 per cent of the value of EC electronic 
services industry. Finance alone accounted for more than two-thirds 
of the Industry value. As regards growth, finance enjoyed a growth 
rate higher than that of the Industry as a whole, but it is 
interesting that one of the smaller sectors, government, also grew 
at a faster rate than the average. This may Indicate that some 
small niche operators may have achieved some success. The growth 
of business-oriented services, as opposed to financial information 
services, appears to have levelled out, Indicating that this market 
might be approaching maturity. The STM subject area also displays 
relatively weak growth. Again, STM 1s a market which may be close 
to maturity, with a high proportion of academic and public sector 
users, many of whose budgets were under pressure over the period. 
24 
EC MECU and percentages 
Table 11 ^ 
Professional hosts and Information providers 1n the EC; turnover by 
service or product type, 1989/90. 
1989 
turnover 
MECU 1990 
turnover 
MECU Growth 
90/89 
% 
Online services 
Real-time 
Retrospective 
Other online 
Total EC online 
Offline products 
and services 
Magnetic media 
Optical media 
Document delivery 
Consultancy 
Other offline 
Total EC offline 1,346 
967 
20 
2,333 
31 
23 
12 
115 
117 
466 1,545 
1,068 
24 
2,638 
35 
31 
13 
119 
119 
491 14.8 
10.5 
20.0 
13.1 
12.9 
30.9 
8.1 
3.3 
1.5 
5.4 
TOTAL EC REVENUES 2,799 3,149 12.5 
Source: CEC / European Information Industry Association, 1992. 
EC MECU and percentages 
Table 12 
Professional hosts and Information providers 1n the EC; turnover by 
subject Interest, 1989/90. 
1989 Share of 
turnover total 
MECU % 1990 
turnover 
MECU Share of 
total Growth 
90/89 
% 
Finance 
Business 
STM 
Government 
Other 
EC SUB-TOTAL(a) 1,674 
666 
49 
38 
15 68.5 
27.3 
2.0 
1.5 
0.6 
2,442 100.0 1,929 
689 
52 
43 
17 70.7 
25.2 
1.9 
1.6 
0.6 
2,728 100.0 15.2 
3.4 
5.3 
14.1 
8.6 
Representing 
of survey total 87.2% 
2,799 MECU 86.6% 
3,149 MECU 
(a) This sub-total relates only to those survey respondents who 
were able to provide a breakdown of turnover by subject. 
Source: CEC / European Information Industry Association, 1992. 
25 
4.1.2 Trends in supply-side growth 
One of the most interesting findings of the CEC/EIIA survey is 
an indication that the growth in turnover for host organisations is 
showing signs of slowing down, confirming the demand-side evidence 
presented in the previous section. In 1990, the total turnover of 
EC-based host organisations was 3,149 MECU, representing a growth 
of 12.5 per cent over the 1989 figure of 2,799 MECU. While still 
higher than the growth in the economy as a whole, this is a 
significantly lower rate of growth than attributed to previous 
years, for which estimates in the region of 20-30 per cent are 
frequently cited. A number of factors may account for this apparent 
slackening of growth, not least the generally difficult trading 
conditions in the second half of 1990 (especially in the United 
Kingdom). New industries, especially those 1n technology-related 
areas, have typically shown very high initial growth rates from a 
small base, followed sooner or later by an Inevitable slowing down 
as the demand base becomes established. Whatever the explanation, 
there is evidence to suggest that this slowdown is a global 
phenomenon. For example, a questionnaire survey conducted by the 
Japanese Database Promotion Centre (DPC) in September 1990 indicated 
that the Japanese information industry players had scaled down its 
own estimates of annual growth over the next five years from more 
than 30 per cent to between 10 and 20 per cent. 
Database distribution; EC, 1990 
Staffing by function (%) 
Editorial Managerial 
In 1989, the EC-based electronic information services industry 
provided employment for a total of more than 21,000 people in the 
database dissemination sector. In 1990, this figure had risen to 
almost 22,000. It is difficult to estimate how many additional 
staff are employed in 'pure' database creation activities, but these 
probably account for a further 10,000 jobs. The chart shows 
26 
human resources in 1990 by function and confirms that database 
creation constitutes an Important part of the activities of multi­
functional, composite information industry organisations. Although 
the numbers employed in the sector grew by only 3.5 per cent between 
1989 and 1990, it should be noted that there were considerable 
productivity gains. Average turnover per employee 1n the database 
dissemination sector rose by 8.9 per cent over the period, from ECU 
138,262 in 1989 to ECU 150,573 1n 1990. 
A further interesting feature of database distribution activity 
as indicated by the CEC/EIIA survey was the small, almost 
insignificant part of the whole, played by gateway services. These 
remain something of a specialist feature of the electronic 
information services industry, accounting for turnover worth only 
9.5 MECU 1n 1990. At the same time, the survey indicated that 
gateway activities enjoyed a 21.8 per cent rate of growth between 
1989 and 1990. 
4.2 Online ASCII database services 
The biggest sector of European value added data services, online 
ASCII databases, is more than 20 years old. The origins of the 
online ASCII database sector can be traced back to the 1960s when 
publishers of printed abstracting and indexing services began to 
rationalise their production methods by adopting the new technology 
of computer typesetting. A by-product of these activities were 
copies of the parallel printed publications on magnetic tape. These 
were destined to become the first online databases as suitable 
hardware platforms and retrieval software were developed to provide 
remote interactive access to text-based information. At the same 
time the number of personal computers and networked terminals has 
increased, and hence the market potential for online services across 
Europe and throughout the world. 
The market for online ASCII database services divides into two 
very different sectors, real-time and retrospective databases. 
Real-time databases provide Instant access to continuously updated 
Information. Traditionally, the main commercial applications for 
real-time database services has been within the financial sector 
for monitoring fluctuations in international currency and equity 
markets. The added value of real-time database services is derived 
from the timeliness of the Information delivered as much as its 
quality. Retrospective databases are those for which the real-time 
updating constraint is not applicable. The pie chart shows the 
relative proportions of real-time and retrospective services within 
the European online services industry in 1990. Evidence from the 
CEC/EIIA co-ordinated surveys suggests that there has been very 
little change in these relative proportions since 1988. If 
anything, real-time services are slowly gaining market share at a 
rate of about one percentage point per annum. 
27 
ASCII databases; EC-based supply 
1990 revenues by type (%) 
Source:CCC.I MA. 1992. 
EC MECU and percentages 
Table 13 
Online ASCII databases; geographic distribution of turnover(a), 
1989/90. 
1989 Share of 1990 Share of Growth 
turnover total turnover total 90/89 
MECU % MECU % % 
National 
Intra-EC 
EC sales(b) 
North America 
Rest of World 
Export sales(b) 
Sub-total(b) 454.9 
616.1 
1,071.0 
289.6 
395.3 
684.9 
1,755.9 25.9 
35.1 
16.5 
22.5 
39.0 524.3 
777.1 
61.0 1,301.4 
294.2 
431.6 
725.8 
2,027.2 25.9 
38.3 
64.2 
14.5 
21.3 
35.8 15.3 
26.1 
21.5 
1.6 
9.2 
6.0 
15.5 
Representing 
of survey total 62.7% 
2,799 MECU 64.4% 
3,149 MECU 
(a) Online delivery only, offline products/services excluded. 
(b) These figures relates only to those survey respondents who 
were able to provide a breakdown of turnover by geographic 
area. 
Source: CEC / European Information Industry Association, 1992. 
28 
Table 13 breaks down European revenues from the sale of online 
ASCII database services by geographic region. In 1990, nearly two-
thirds of all revenue (64.2 per cent) came from national sales (25.9 
per cent) or from 'trade' with other EC countries (38.3 per cent). 
The remaining sales were in the form of exports, to markets in North 
America (14.5 per cent) or other parts of the world (21.3 per cent). 
These results confirm that national demand continues to be an 
important source of revenue for European online distributors. 
However, when the results for 1990 and 1989 are compared, it can be 
seen that the most striking growth (21.6 per cent) has come from a 
greater level of trade with other EC countries. The results suggest 
relatively little growth in export earnings, especially to North 
America (up 1.6 per cent), but to some extent, this may be partly 
attributable to fluctuations in the ECU-dollar exchange rate 
(figures from EUROSTAT show that the relative value of the ECU 
fluctuated considerably over the period of the survey, from a low 
of US$1.074 to a high point of US$1.367). 
4.3 Videotex 
Public videotex systems began to appear in Europe in the second 
half of the 1970s. With the entry of Eire and Greece into the 
marketplace, videotex services now exist in all the Member States 
of the European Community. In almost every case, the services are 
provided by the national telecommunications operator. In early 1991 
there were 6.6 million terminals 1n the European marketplace and the 
penetration of users in the Community's professional sector was of 
the order of 3.120 million. However, the European videotex market 
is still very much dominated by France, with nearly 87 per cent of 
all videotex terminals and 80 per cent of service provider revenues, 
although there are now efforts by other Member States, to match the 
mass dissemination of videotex terminals as achieved by France 
Telecom. The success of France Telecom's Télétei network is in part 
due to the wide and free distribution of Minitel terminals. 
One of the key trends in the European videotex market has been 
the growth in demand in the professional and business sectors. A 
major stimulus to videotex market development has been the creation 
of access and billing facilities through premium rate access points. 
These 'kiosk' facilities have stimulated the use of information and 
transactional services, both by professionals (notably in SMEs) and 
by consumers. The diversity of tariffs and the ability to charge 
higher rates for value added services (ECU 20 to 70 per hour), have 
both had a direct effect on the variety of services, especially in 
the supply of professional information services. Such kiosk 
facilities, available 1n France since 1986, are operational or 
planned for 1992 in Belgium, Ireland, Italy, Luxembourg, Portugal 
and Spain. 
The extent of cross-border traffic within Europe in respect of 
videotex Information services remains very modest. To a large 
extent, this is because the European videotex market has been 
characterised by separate national approaches to service 
development. This applies to standards, transmission networks, 
29 
policies for the distribution of terminals, as well as the 
procedures for billing customers. An agreement has not been reached 
among the twelve EC Member States on a common European videotex 
standard. Currently, three different videotex standards are 1n 
operation within the EC: 
o CEPT1, derived from the German Bildschirmtext (Btx) 
specifications; 
o CEPT2, derived from the French Télétei specifications; 
o CEPT3, derived from the British Prestel specifications. 
One approach to overcoming these standards barriers has been to 
develop gateways between national services. As Table 14 shows, only 
most national videotex networks had adopted multi-standard services 
by 1991 (including Belgium, Denmark, Ireland, Italy, Luxembourg, The 
Netherlands and Portugal). 
Table 14 
International videotex standards; EC Member States, 1991. 
Service CEPT1 CEPT2 CEPT3 ASCII 
Belgium 
Denmark 
France 
Germany 
Greece(a) 
Ireland 
Italy 
Luxembourg 
Netherlands 
Portugal 
Spain 
UK RTT VIDEOTEX 
TELEDATA 
TÉLÉTEL 
BILDSCHIRMTEXT 
HELLASTEL 
MCL 
VIDEOTEL 
VIDEOTEX 
VIDEOTEX 
NEDERLAND 
SVP 
IBERTEX 
PRESTEL Y 
Y 
N 
Y 
n/a 
N 
Y 
Y 
N 
Y 
Y 
N Y 
Y 
Y 
N 
n/a 
Y 
Y 
Y 
Y 
Y 
N 
N Y 
Y 
N 
N 
n/a 
Y 
Y 
Y 
Y 
Y 
N 
Y Y 
Y 
Y 
N 
n/a 
Y 
N 
N 
Y 
Y 
N 
N 
(a) The HELLASTEL network 1s due to be launched in 1992. 
Source: CEPT, 1991. 
By April 1991, there were 26 interconnections of national 
videotex networks. Of these, 14 corresponded to two-way gateways, 
notably: France-Italy; France-Belgium; Germany-France; France-
Luxembourg; Luxembourg-Germany; Germany-Netherlands; and France-
Spain. A further 26 interconnections are planned up to 1993, 
bringing the total number of agreements to 52. The already 
30 
extensive and growing number of links between national networks 
raises the possibility of the development of a pan-European videotex 
system. However, despite the considerable work to establish 
connections and overcome protocol and standards differences, the 
volume of International traffic remains low, exemplified by France's 
Minitelnet export traffic of 242,500 hours for 1991, representing 
less than 0.3 per cent of total Té le tel traffic. 
Besides this, the question mark over the French service and the 
time it will take France Telecom to recover its investment, have 
also cast doubts on such a system. At the request of France 
Telecom, Coopers & Lybrand International was commissioned to review 
the financial performance and outlook for French videotex services 
over the period 1984 to 2000. The report anticipates that it will 
not be before 1998 that the Télétei service will reach break-even 
point, the position at which the cumulative costs of offering the 
service are exceeded by cumulative receipts. 
The success of videotex as an information network in the future 
will depend on a number of factors, notably increased access 
facilities and the supply of interesting new information services. 
In the early stages of market development, there is often a 'chicken 
and egg' situation where both the supply- and demand-sides need to 
be stimulated if a viable market is to develop. One way in which 
videotex markets can be established is through subsidising the 
distribution of terminals, although this subsidy may not necessarily 
be recovered in the long run. The lesson to be learnt from the 
Télétei experience is that a major factor attractive to both users 
and Information providers is the central management of the system 
by France Telecom, with regard to billing, distribution of terminals 
and the transmission of signals. 
The videotex technology currently 1n use is to a large extent 
outdated, but the basic concept is still valid. New opportunities 
exist for information service providers who can harness the power 
of second generation telematics based on ISDN. The post-production 
videotex standardisation undertaken at the demand of industry, faced 
with a fragmented market, has unfortunately not led to a single 
European voluntary standard. This needs to be avoided in the next 
generation of telematic services, based on broadband data 
communications, which will eventually be able to integrate complex 
animations, high quality still pictures, and sound. 
4.4 Audiotex services 
The recent waves of telecommunications deregulation across 
Europe have allowed a new range of Premium Rate Services (PRS) to 
be made available by telephone, enabling users to interact, by means 
of voice or touch-tone recognition, with remote databases. Like 
videotex, audiotex is very simple to use and 1t requires for touch 
tone recognition only the purchase of a suitable DTMF handset. 
These characteristics enable a wide range of mass market 
applications, directed not only to the consumer but also to the 
business community. Audiotex 1s beginning to find a variety of 
professional applications. Voice access is currently being provided 
31 
to various online database services, such as the British Library's 
BLAISE service. The European Commission has conducted experiments 
with Max, a talking 'robot' to provide information on the ECHO 
Online Service; the exchange rates for the ECU; the programmes and 
institutions of the European Commission; and technical terms used 
in information technology. 
The market for audiotex services in the European Economic Space 
(EC plus the EFTA countries) has shown very rapid growth in Its 
early stages. In 1990, the value of the market was estimated at 
MECU 530, with growth over the previous year of 83 per cent, 
admittedly from a very low initial base. The United Kingdom, France 
and The Netherlands are the most highly developed markets, 
accounting for more than 90 per cent of 1990 revenues. Other 
European countries, especially Germany, are expected to extend their 
market share as the processes of telecommunications liberalisation 
and new service developments begin to have an Impact. In 
comparison, various estimates of the US market for audiotex services 
(in 1991) have been made, ranging from MECU 400 (Information 
Industry Association) to MECU 720 (US Department of Commerce). 
The European market for audiotex services is currently dominated 
by the UK, but this is expected to change quickly as other European 
countries install lines and develop new services. However, in such 
a new and emerging area, it is difficult to predict at this early 
stage whether significant levels of demand will emerge for audiotex 
services. Neither is it possible to say with confidence whether 
stable market conditions will prevail, as this will depend on the 
regulatory environment, such as controls on the types of service 
allowed in different markets, or restrictions on the length of 
calls. Audiotex represents the least developed pan-European 
information market. Future market development is dependent on 
progress in three main areas: 
o the policies adopted by PTOs in respect of tariffication and 
billing; 
o the digitalisation of the networks and the availability of 
DTMF handsets; 
o commercial initiatives. 
Perhaps the most important of these issues is the last one. 
Unless commercial operators come to the audiotex marketplace with 
an attractive range of services, demand will be limited. This is 
a classic 'chicken and egg' situation and one where an imaginative 
operator could make a considerable difference to the way that 
audiotex services develop in the future. Naturally, the tariff 
structures which are formulated for Premium Rate Services will have 
a considerable bearing on market development. The current range of 
PRS tariffs across different EC countries is shown in Table 15. An 
Important point to note is that PRS tariffs are set by PTOs, who 
are therefore in an extremely powerful position to control and 
determine the market for audiotex and other kiosk services. 
32 
EC Member States Prefix numbers and ECU 
Table 15 
Premium Rate Services; prefixes and tariffs(a), EC, 1 May 1992(b). 
Prefix Peak rate charge 
per minute(c) 
Belgium 
Denmark 
Spain 
France 
Ireland 
Italy 
Netherlands 
Portugal 
UK (British Telecom) 
UK (Mercury) 077 
901 
902 
903 
903 
3665 
3664 
3666 
3667 
3670 
0300 
144 
06 
506 TPL/0670 CTT 
0898 
0839/0660 
0881 0.14 
0.14 0.42 
0.14 
0.95 
2.84 
0.47 
0.18 
0.11 
0.21 
0.32 
0.53 
0.62 
(d) 
0.22(e) 
0.93 
0.58 
0.58 
0.47 
(a) Excluding value-added taxes. 
(b) Data for Germany, Greece and Luxembourg unavailable. 
(c) Exchange rates used: Financial Times 4 June 1992. 
(d) Tariffs in preparation. 
(e) Base rate only, range of tariffs applicable on 06 number. 
Source: Logica, 1992. 
An important feature of the emerging market for audiotex 
services lies in the technical possibilities for linking audiotex 
with other electronic information services. Increasingly, 
information publishers are employing database creation and retrieval 
technology which permits individual end users to obtain specific 
information needed by them or, indeed, which permits the publisher 
to provide services tailored to the individual user's requirements. 
Electronic mall, fax, and encrypted satellite broadcasting all 
permit such customised services to be delivered with security. 
In the US, some service providers have created new applications 
for business-oriented audiotex services. One example of an 
interesting development in audiotex is that of Searchcraft, a 
service which offers a voice/fax gateway to a series of online 
databases. By means of a pay-per-call number, a user can call an 
automated voice response number, choose an online database service 
33 
and have the results delivered by fax. Industry analysts see great 
growth potential in this medium, known as 'audiofax'. The 
advantages of audiofax are considerable. As well as overcoming the 
very limited amount of information which can be delivered in a 
classical audiotex system, the fax medium allows the possibility of 
transmitting non-ASCII information such as pictures and graphics. 
Fax-based information delivery may create new opportunities for 
existing electronic information services by offering new forms of 
delivery. There are now more fax machines in the world than there 
are personal computers. A study by the London-based Electronic 
Publishing Services Ltd projected that 8.5 million fax machines will 
be installed in Europe by the end of 1992. According to another 
consultancy, BIS, the number of messages transmitted in Europe in 
1990 by e-mail was 350 million, compared with 6 billion transmitted 
by fax. The ease of use of facsimile makes it an important feature 
of the electronic information landscape, particularly if it is used 
for the selective filtering of information, including personalised 
newsletters and services combining fax with audiotex. 
4.5 Optical Information media 
There is some uncertainty over the future use of CD-ROM and 
multimedia information products in the face of competition from 
'electronic books' (handheld devices which store text information, 
such as dictionaries). A rapid growth in the number of electronic 
books is forecast over the next five to six years. An early 
indicator of the market acceptability of electronic books may be 
seen in the example of Franklin, the USA's largest dictionary 
publisher. Franklin sold more than 3 million units in the two years 
to the end of 1991. Growth in professional multimedia applications 
using optical media is likely, but there is still much uncertainty 
over its penetration of home consumer markets. In the next two or 
three years there is a possibility that CD-ROM may be partially 
replaced or complemented, either by WORM discs or by discs with 
added capability, like the CD-ROM extended Architecture (CD-ROM/XA) 
standard. At the same time, there is likely to be an increase in 
the number of drives used for 1n-house applications and also for CD-
ROMs to be produced in-house for data archival purposes. At the 
present time, the rate of increase of mastering for publication on 
optical disc far outstrips the growth of any other publishing 
sector. 
European revenues from the sale of professional information on 
optical media (predominantly CD-ROM) were of the order of MECU 30.5 
1n 1990 and seem to be exhibiting fast growth rates, albeit from a 
low initial base (turnover grew by 30.9 per cent between 1989 and 
1990). Whilst in absolute terms, the European professional optical 
publishing sector is quite small, although 1t should be pointed out 
that the figures presented are for the sales of information media 
only - often figures for the optical publishing marketplace bundle 
together hardware, search software, in-house, and publicly-available 
titles. 
34 
4.5.1 CD-ROM 
CD-ROM offers a particularly attractive medium for professional 
information. The medium is characterised by high data capacity, 
durability, and agreed technical standards (notably ISO 9660). The 
question which remains is largely one of market acceptance and 
penetration. Worldwide, the production of new 'public' CD-ROM 
titles is growing at an extraordinary pace. Each month of 1991 saw 
the addition of around 100 new CD-ROM titles. The most reliable 
figures available for European CD-ROM title output are probably 
those produced by London-based TFPL Publishing, in the form of their 
Annual CD-ROM Directory. In a booklet entitled CD-ROM Facts and 
Figures 1992, European CD-ROM title output for the period 1989 to 
1992 was as follows (Table 16): 
EC Numbers 
Table 16 
CD-ROM titles published by EC-based players, 1989-1992. 
1989 1990 1991 1992 
89 237 487 698 
Source: CD-ROM Facts and Figures 1992 (TFPL Publishing). 
A notable feature of European CD-ROM production has been the 
continuing entry of new players from outside the 'traditional' 
online ASCII sector, mostly traditional print publishers. Scale 
economies now mean that the costs of mastering and duplication are 
now relatively low, which means low entry costs (of the order of 
ECU 30,000) to the CD-ROM marketplace. However, CD-ROM market 
development has been rather slow, possibly due to the initially high 
prices attached both to CD-ROM disk drives and titles. 
Meanwhile, in terms of European sales, CD-ROM is making steady, 
if not dramatic, progress 1n a number of vertical markets with law, 
medicine and business being the dominant application areas. CD-ROM 
has a substantial foothold in the area of bibliographic services -
most of the major commercial providers of bibliographic services 
have ventured into the medium - and its future as a library 
reference medium seems pretty well secure. A further stimulus to 
this market segment has come from various CEC Initiatives to develop 
joint ventures between European national libraries. These have 
included the publication of a bibliographic CD-ROM by the British 
Library working in collaboration with the French Bibliothèque 
Nationale. 
The 1991 installed base of CD-ROM disk drives within the 
European Community and the countries of EFTA has been estimated, by 
Link Resources, to be around 176,000 units and to be exhibiting 
35 
average annual growth rates of 41 per cent. Table 17 provides a 
breakdown of the situation in four selected EC Member States. 
Thousand units and percentages 
Table 17 
CD-ROM disk drives; Installed base and projections: 
selected EC Member States, 1990-1994. 
Annual 
growth 
1990 1991 1992 1993 1994 rate (%) 
Germany 15 23 35 54 85 54 
France 17 27 40 60 95 54 
Italy 60 90 115 140 170 30 
UK 17 25 37 50 80 47 
Source: Link Resources, 1991. 
It is not possible to distinguish from Link's figures whether 
users are acquiring CD-ROM disk drives to access external 
information or for their own inhouse applications (according to one 
Industry estimate, only 80,000 CD-ROM drives were being used to 
search 'public titles' in 1991). 
4.5.2 Multimedia information products 
Multimedia information products which combine text, sound, still 
and moving images, and comprise a new breed of information products 
which are more engaging and attractive to the consumer than 
traditional character-based Information products. The significance 
of multimedia products and services is that they signify a change 
of attitude to information and the way that it 1s presented and 
used. Instead of large amounts of text which must be searched by 
means of complex query languages, information can be presented and 
manipulated in ways that relate more directly to users' experience. 
As used currently, the term multimedia implies that the delivery 
medium is an optical disc, either a videodisc or a compact disc. 
This is a purely technical limitation, a feature of the very large 
amounts of data which are required to deliver sound and graphic 
Information, combined with the low data transfer rates which are 
available to most users of online and videotex services. 
There is a growing number of multimedia titles in areas such as 
education, health and safety, business and finance. Currently, this 
is a market segment where traditional online simply cannot compete 
at present because of current limitations for the average user 1n 
data compression, storage requirements, data transfer rates, and 
display characteristics. The emergence of multimedia titles is an 
36 
important trend to monitor because of its potential implications not 
only on the volume and price characteristics of CD-ROM publishing, 
but on the impact these factors will have on professional, library 
and other information markets. In Europe, a number of encyclopedia 
publishers, including Esselte Forlag, have begun to establish large 
text and image banks which will allow parallel output either as 
print and optical disc output. The entry of large traditional 
publishers into the multimedia arena could well mean that print 
archives, previously unavailable in electronic form, will become 
transformed and enable previously underdeveloped markets to be 
exploited. 
The potential of multimedia technologies, which perhaps could 
or should be exploited by the online information industry is not 
being developed by members of that industry, but rather by members 
of a parallel information industry comprising computer hardware, 
software and peripherals companies, the television and film 
industries, and the music industry. The traditional information 
industry, more often than not, is not even Involved at the design 
stage. Multimedia applications will evolve with the introduction 
of: capture and authoring tools, more powerful and less expensive 
microcomputers capable of supporting the more demanding 
applications, content which is not a direct transfer from existing 
applications, but is newly created or has a significant value-added 
over existing collections; and distribution channels which introduce 
and integrate CD-ROM and related CD-based products into the mass 
market. 
The trend towards international information content and markets 
is being accelerated by the emergence of multimedia. Linguistic 
differentiation in particular will be reduced for information 
products which are more graphical in nature and subject and less 
textual. The setting of international standards will play a 
continuing role in making available tools, technologies and 
platforms which have a common nature across national boundaries. 
In multimedia today, standards are working for market growth in some 
respects and against it in others. Compressed image standards are 
a positive factor, including CCITT Group 3 and 4 facsimile page 
image compression standards and ISO JPEG (Joint Photographic Expert 
Group) and MPEG (Motion Picture Expert Group) colour still and 
motion picture compression standards. Interestingly, these 
standards are being developed more for telecommunications 
applications than for optical publishing. However, the different 
formats, platforms and systems with which optical publishers may 
soon deliver multimedia to the customer (CD-ROM for the PC, Apple 
and Commodore systems, CD-ROM/XA, CD-ROM/Multimedia Windows, DVI, 
CD-I and CDTV) are numerous and not likely to be addressed by any 
standards body except by the market Itself over a period of time. 
Before CD-I or DVI can achieve any level of success, however, 
questions of price and the availability of development systems and 
the cost, timescale and ease of application development must be 
answered, as well as the availability and price of end-user systems. 
Interplays will continue between consumer electronics products 
and professional workstations, between institutional and private 
37 
education and training applications, between analogue video-based 
and digital computer-based entertainment and leisure time 
applications and between retail sales and represented sales. Such 
phenomena have already been observed in the extension of CD-Audio 
to CD-ROM, and 1n the base represented by professional CD-ROM 
products in the US and mass markets in Japan, and will likely be 
observed in the next few years between local (Interactive) 
multimedia and online multimedia over broadband networks. 
4.5.3 Geographic information systems 
Geographical information systems (GIS) first appeared over a 
decade ago and have exhibited dramatic growth ever since. They were 
conceived for numerous purposes: natural resource management, 
management and prevention of natural disasters, urban planning, land 
management, the development of public sector projects, such as 
hospitals. Geographic information systems can be used as a new 
access mode to other statistical and factual databases. Geographic 
interfaces represent a powerful and universal language. By 
combining geographical and other databases it becomes possible to 
develop radical new applications: tourist-oriented databases 
providing Information about routes, restaurants, hotels and sites 
of interest; marketing databases combining demographic data, 
consumer behavioural data, and address files. 
The point emphasised here is that of the role of catalyst that 
GIS developments are likely to play for the wider Information 
services market. 
38 
5- DYNAMICS OR THE EUROPEAN INFORMATION INDUSTRIES 
To fully understand the dynamics of the European Information 
Industries, it is important to realise that the electronic 
Information services marketplace 1s formed at the point where 
intellectual property (information) telecommunications services, 
hardware, and software meet. This means that the electronic 
information services marketplace is open to many external Influences 
and pressures, especially in the form of technological change. 
5.1 Structural change 1n the Information industries 
The Information services sector in Europe is characterised by 
continuing growth at rates generally faster than those 1n the 
economy as a whole. At the same time, driven by the challenge of 
North American and, increasingly, Japanese competition the sector 
is subject to processes of Industrial change and restructuring. 
The traditional publishing sector in Europe 1s highly 
fragmented, consisting mainly of small competitors, many of whom 
face the same commercial problems, including shorter runs per title, 
decreasing margins, and under-investment. As a result, most 
publishing, even by the year 2000, will continue to be in printed 
form - even today, only a small proportion of the larger European 
publishers are actively involved 1n electronic publishing. However, 
print media will Increasingly be processed and produced by 
electronic means, creating new opportunities for 'traditional' 
publishers to become Involved in the provision of electronic 
information services. The key issues facing publishers will be the 
extent to which the new opportunities represent: a 'natural' 
replacement of their existing business; a logical product line 
extension; or simply an opportunity to diversify. 
Compared with the computer services sector as a whole, turnover 
in the electronic Information services market 1s currently at a 
relatively low level. However, there 1s evidence of a significant 
and growing market for electronic Information within and across the 
Community. Intra-EC 'trade' 1n online ASCII databases, for example, 
accounted for 38.3 per cent of all revenues to EC-based hosts and 
distributors 1n 1990. By comparison, distribution within the 
'domestic' markets of the Member States accounted for only 25.9 per 
cent of all EC revenues. 
5.2 Concentration of ownership: mergers and acquisitions 
The structure of the electronic information services sector 1s 
highly dynamic and 1s characterised by Intense mergers and 
acquisition activity, coupled with a tendency towards 
diversification. These forces are leading to an Increasing 
concentration of ownership 1n the hands of a few major players. 
Mergers and acquisition are spread across all-functional areas of 
the Information services marketplace: database production; 
distribution; and network operations. Notable European acquisitions 
1n 1991 Included the purchase of Pergamon Press by Elsevier and the 
39 
acquisition of interests 1n both the French and Italian markets 
(through the purchase of information providers in the legal and 
taxation areas) by Wolters Kluwer. Typically, information providers 
have sought to strengthen their role 1n distribution (either by 
means of self-hosting or publishing their data on optical media) 
against a background of increasingly fierce competition, while 
network operators are tending to move increasingly into Information 
service provision through the acquisition of Information providers. 
The best estimate of the number of local EC-based firms active 
in the European electronic information marketplace 1n 1991 1s about 
7,000 (EIIA figures). While this is a large number, many European 
vendors continue to operate primarily at national level, with, at 
best, a limited Involvement in two or three adjacent countries. 
Europe has probably less than one hundred Indigenous pan-European 
operators, although to this figure should be added a significant 
number of US providers who maintain a presence at European level. 
Typically, the average European company 1s smaller, less vertically 
Integrated, and more nationally-oriented than Its US counterparts, 
although this 1s slowly changing. 
Analysis by Link Resources indicates that takeover and mergers 
activity 1n the European market during the period 1990-91 was less 
intense than had been anticipated. Contributory factors appear to 
have been the unfavourable economic climate and the possibility that 
companies were taking a longer-term view (in which 1992 was not 
necessarily a key date). Another factor 1s that cross-border 
cooperation has never been a common feature of the European 
publishing sector. The EIIA has projected that the number of 
vendors active in the European market 1s declining and will probably 
drop to no more than 5,500 by 1995. This is likely to be as the 
result of a growing emphasis on takeovers and mergers rather than 
company failures or withdrawal from the marketplace. 
While the European information services marketplace 1s dominated 
by larger players, especially by large Information conglomerates, 
like Bertelsmann, there appears to be a fairly stable two-layer 
Industry structure with small- and medium-sized enterprises (SMEs) 
existing alongside the industry giants. These smaller operators are 
exploiting niche markets, as packagers and providers of specialised 
information services. If what has happened in the computer services 
sector 1s a pointer to future developments in the Information 
services sector, then mergers and acquisition activity may lead to 
the greatest competitive pressures being felt amongst medium-sized 
players in regional markets. 
5.3 Corporate strategies 1n the information business 
From a single act of database creation, it 1s possible to derive 
a wide range of complementary products; from printed media to 
videotex services and online ASCII databases. This characteristic 
of database publishing enables producers to develop multiple 
commodities, and so create larger but more segmented markets. In 
Europe, corporate strategies are evolving to exploit these 
opportunities for product diversification, while developments 1n 
marketing and pricing policies, delivery systems and advances in 
retrieval software are being Introduced in an attempt to create and 
40 
stimulate greater demand for electronic Information. 
5.3.1 Diversification and cross-media ownership 
Database creation and maintenance are highly labour-intensive 
and therefore expensive operations. However, a peculiar economic 
feature of information is that subsequent reproduction costs are 
very low. The low marginal costs of generating information products 
have encouraged this process of product diversification. The 
contents of many national newspapers are often published 
electronically, as online information services of CD-ROMs, as well 
as traditional printed copy, making it possible for the newspaper 
to position different delivery systems and formats for different 
market segments. At the same time, advances in telecommunications 
are extending the geographical reach of information markets, 
permitting information goods and services to be distributed 1n 
different regional markets at insignificant marginal costs. These 
developments are stimulating the creation of a pan-European 
Information marketplace 1n which there is potential for a range of 
parallel Information products and services to co-ex1st. The high 
first copy costs of Information products, combined with low 
reproduction costs, creates a strong incentive for sales 
maximisation so as to minimise unit costs. This economic logic 
tends to especially favour large publishers and media companies, 
where advertising revenues and competitive positioning are 
determined by circulation and audience share. As a result, 
information business monopolies are emerging 1n specific information 
markets, a process which tends to exclude smaller producers. 
Diversification is a key feature of the Information marketplace. 
It is motivated by defensive strategies to protect market share and 
the realisation of scope economies through the joint production of 
information commodities (thus spreading costs over several different 
products). The privatisation of the audiovisual industry in Europe, 
in particular, has led to higher levels of cross-media ownership. 
For example, newspaper and magazine publishers have emerged as 
dominant players in the German audiovisual industry, similar 
patterns of cross-media ownership are evident in Italy and France 
where broadcasting has been progressively deregulated. The 
expansion of the pan-European marketplace is also beginning to 
create 'transnational' Information products, whereby the same 
television programme, for example, is broadcast simultaneously to 
national and regional audiences in several countries. While this 
development is aimed at maximising audiences and reducing 
programming costs, there 1s a danger that, left unchecked, it might 
eventually undermine Europe's rich cultural diversity. 
5.3.2 Broadening the professional user base 
The major costs of electronic publishing lie in sales and 
distribution, largely because there are few established channels 
for electronic publications 1n the same way that there are retail 
bookshops for printed media. Furthermore, consumers tend to need 
a high level of support and after-sales service because of the 
complexity of many electronic Information products and services. 
41 
In order to begin to recover these costs, the stimulation of greater 
levels of demand 1s essential to the future development of the 
marketplace for professional electronic information 1n Europe. In 
the second phase of the IMPACT programme, beginning 1n 1991, the 
European Commission has accordingly shifted the emphasis from the 
supply to the demand side of the market, adopting 'INFO EURO ACCESS' 
as Its central strategic theme. INFO EURO ACCESS 1s concerned with 
improving the accessibility of Information at the European level for 
all interested parties. A variety of corporate and Industry level 
initiatives, running concurrently with the Commission's IMPACT 
programme, are attempting to establish the Information business as 
a mass production and distribution sector. 
There are signs that European firms are beginning to place more 
emphasis on Improving the balance between technological development 
and market development, the latter being more directly oriented 
towards the requirements of users. As part of this greater 
marketing effort, there is increasing attention to promotional 
activities and improvements to training, customer services, and 
support documentation. A further welcome development is the 
restructuring of pricing structures in online ASCII database 
markets, the result of not only more intense market competition but 
also of new and cheaper telecommunications options which have become 
available. Traditional online pricing practices, based on charging 
for time spent connected, are being redefined and firms are seeking 
to define new pricing formulae which more satisfactorily reflect the 
effective market demands of users,Information providers, and service 
operators. For example, both ESA/IRS and Maxwell Online began 
experimenting with new pricing mechanisms 1n 1991, signalling a 
shift away from connect time to charging for the information 
actually delivered (using a mix of print pricing, command-based 
pricing, and fixed fee or subscription arrangements). 
Finally, the stimulation of the demand-side will be encouraged 
by the creation of more user-friendly access systems and innovative 
value-adding features by the host services. Recent examples of 
these innovations include: intelligent interfaces and gateways; 
multi-file searching; ; post-processing of search results by means 
of text processing, personal database, spreadsheet, statistical and 
graphical tools. 
5.4 Completing the Internal market: challenges and opportunities 
On the whole, European companies have been less successful than 
North American and Japanese companies 1n converting their research 
and technological development (RTD) activities into Inventions and 
their inventions into market shares and profits. From the mid-
1980s, European industry has become less competitive globally. As 
indicated in earlier sections of this Report, the EC has a 
significant trade deficit with the USA 1n the electronic information 
services sector, and the challenge from the Japanese is expected to 
Intensify through the latter half of the 1990s. Therefore, there 
1s a need for considerable effort in applying market-driven 
approaches to research and technological development (RTD) 1n the 
information services sector. This may Involve balancing the needs 
for priority technological research with more Intensive and 
42 
proactive measures toward demand-stimulâtion, matching user 
acceptance with product design, and reducing some of the legal and 
regulatory barriers to market growth and development. 
In this latter area, the Commission has made an Important 
contribution through IMPACT and the activities of the Legal Advisory 
Board (LAB). The lack of a comprehensive legal framework relating 
to the electronic Information services sector presents many 
difficult issues for the industry, not least 1n the area of 
Intellectual property rights. Traditional literature and published 
written information have long benefitted from copyright protection 
as a safeguard against copying and re-use, thereby protecting the 
time, expense, and Intellectual effort invested in their creation. 
Yet in the database domain, piracy 1s particularly easy as some or 
all of the contents can be downloaded and reproduced quickly and at 
low cost using modern communication networks. Similar problems 
emerge in relation to the protection of computer software. Without 
adequate protection, European companies are reluctant to Invest 1n 
new database technologies if action 1s not taken to provide a secure 
and stable legal framework. The LAB contributed to this debate by 
Its preparatory work. In May 1991, on the basis of a study 
providing an overall view on the legal status of protection for 
'Informational compilations', the LAB's majority opinion suggested 
to the Commission that a mere droit d'auteur protection would not be 
sufficient and that additional means of protection should be sought. 
Similarly, the LAB has recognised the diversity of approaches to 
personal data protection in Member States as a significant obstacle 
to the free flow of data within the Commnulty and contributed to a 
draft Directive on this Issue, proposed by the Commission 1n 1990. 
As well as facing up to some of the legal and administrative 
problems already mentioned, there 1s a further challenge 1n the form 
of the linguistic and cultural differences which constrain 
Information market development at European level. These barriers 
lead to market fragmentation and mean that the creation of a single 
Internal market based on economies of scale is difficult to achieve. 
This places the Community at a strategic disadvantage compared with 
North America, whose domestic markets are very largely monolingual. 
The challenge ahead 1s therefore to develop a co-ordinated and 
balanced approach to developing the electronic information sector, 
reconciling the conflicting goals of Increasing global 
competitiveness while maintaining national and cultural diversity. 
The major Impetus to the electronic Information marketplace 
will, of course, come from the general expansion of cross-border 
business activity after the Single European Market is consolidated 
over the next few years. As businesses 1n all sectors adjust to the 
new realities of pan-European market competition and regulation, 
they will require a great variety of Information to function 
effectively and efficiently, and a greater share of this 
information will need to be accessible across national borders. 
Clearly, the markets for electronic information services will play 
a central role 1n these major transformations of the European 
Economic Area, by providing the technologies and services needed for 
Integration and competitiveness at the level of firms and 
industries. 
43 
CONCLUSIONS 
The Information Market Observatory has continued to make 
progress in the collection and analysis of Indicators relating to 
the European electronic information services marketplace. The 
estimates which follow represent possibly the most accurate measures 
of industry value so far available: 
- In 1990, turnover by EC-based producers and distributors of 
electronic Information services was around BECU 3.1, providing 
employment for an estimated 32,000 people (full-time equivalents) 
In 7,000 firms. These figures place the sector on a roughly 
equivalent basis with two other strategically Important sectors: 
market research (BECU 1.9) and management consultancy (BECU 
3.5). 
This third Annual Report of the IMO underlines four significant 
trends and structural features of the European electronic 
Information services marketplace identified in the previous Report: 
- The United States continues to dominate international markets 
for professional electronic information services. US Industry 
value in 1990 was around BECU 6.9, more than twice the size of 
total EC-based activity (BECU 3.1). Typically, the average 
European company Is smaller, less vertically Integrated, and 
more nationally-oriented than Its US counterparts. Disparities 
continue to exist beween the US and the Community In terms of 
database production and total Industry value. 
- Significant differences exist between the Member States In 
relation to information market development. Particular problems 
are faced in the Community's 'less favoured' regions In relation 
to demand, local supply, and the telecommunications 
Infrastructure. These problems are being ameliorated by 
Community actions, notably under the Télématique and IMPACT 
programmes. 
- Most Information providers operate on a predominantly national 
basis, delivering professional Information services to their own 
national communities. 
44 
- Technical, linguistic, administrative, and legal obstacles 
continue to hamper the development of a common market In 
information services. Despite the opportunities presented by 
the SEM, few truly pan-European Information services have 
been brought to the marketplace. This reinforces the need for 
market broadening and awareness raising activities, as 
supported by the INFO EURO ACCESS central strategic concept 
of the IMPACT programme. 
Since the publication of the previous IMO Annual Report, three 
Important new trends and developments have become apparent: 
- Evidence from both supply- and demand-side Indicators 
collected by the IMO points to a slowdown in the rate of growth 
of International markets for online Information, beginning In the 
second half of 1990 and continuing throughout 1991. 
Recessionary pressures In the global economy appear to have 
depressed demand In EC, North American, and Japanese markets. 
- Intra-EC 'trade' In online ASCII databases was the fastest 
growing market segment between 1989 and 1990 with an growth 
rate of 26.1 per cent (In absolute terms) while exports to 
destinations outside the Community grew by only 6.0 per cent. 
- Merger and acquisition activity is a significant force in the 
European Information market as industry actors seek to 
integrate Information product/on and distribution activities. 
The number of vendors active In the European market Is 
gradually declining and Is predicted to fall from 7,000 firms In 
1991 to no more than 5,500 by 1995. 
45 
Annex I: Definitions 
AUDIOTEX. Audiotex 1s a new electronic information medium with applications 
both 1n consumer (home user) and business markets. Audiotex services are 
directly accessible by means of a suitable (Dial Tone Multi-Frequency or DTMF) 
telephone handset. 
BROADCAST SERVICES. Services where no Interactivity is possible on the 
part of the customer in selecting what is sent by the service provider. 
DATABASE PRODUCER. An organisation which holds the Intellectual property 
rights relating to the content of electronic information products and services 
and which licences host services or distributors to use that content which 
those hosts/distributors make available 1n electronically usable form. 
Usually the database producers perform the editorial tasks of collection and 
organisation of the Information contained In electronic information services. 
DISTRIBUTOR. An organisation which performs a function similar 1n nature to 
that of a host service, but 1n relation to unitized electronic Information 
products (such as magnetic tapes or disks, or CD-ROMS) rather than Information 
services delivered via telecommunications. 
DOCUMENT DELIVERY. Primary documents ordered as a direct result of using 
electronic information services. 
GA TEW A Y SERVICE. A gateway operator provides specialised 
telecommunications links to online Information services provided by third 
parties. 'Pure' gateway services are not hosts in their own right. 
HOST SERVICE. An organisation which offers its customers direct access to 
computer-held information via a telecommunications link. This definition 
includes services delivered in videotex mode. 
INFORMATION SERVICES INDUSTRIES. The term 'information services 
industries' embraces a range of commercial and non-commercial activities 
relating to the creation; publication; and distribution of Information goods 
and services. In the context of this Report, the term carries a rather more 
precise meaning, relating solely to a subset of those Industries which 
delivers Information services to professional (1e non-consumer) markets on a 
commercial basis across a range of information media, from print-on-paper to 
optical disk. 
MAGNETIC MEDIA. Tapes and disks of various sizes and formats (Including 
diskettes for personal computers) which use magnetic storage technology. 
46 
ONLINE ASCII DATABASES. The term 'online' 1s deemed to cover all 
Interactive information services delivered by hosts (directly or through 
gateways) via telecommunications links. Services delivered character by 
character, rather than page by page or screen-full by screen-full, are 
distinguished by reference to the Internationally recognised ASCII convention 
for character coding. 
OPTICAL MEDIA. Various types of disk which use optical storage technology, 
the most common format being CD-ROM. 
REAL-TIME INFORMATION SERVICES. Online services which are updated 
immediately as new data becomes available. 
RETROSPECTIVE DATABASE SERVICES. Online services which are not updated 
in real time. 
TRANSACTION SERVICES. Services where the principal objective 1s a 
transaction rather than the delivery of information, such as EDI services. 
VIDEOTEX. Online services delivered page by page or screen-full by screen-
full, rather than character by character. 
UT 
Annex II: Acr~onyi 
at>fc> r*ov i ati on s and 
ASCII American Standard Code for Information Interchange 
AT&T Atlantic Telephone & Telegraph 
BLAISE British Library Automated Information Service 
BT British Telecom 
Btx Bildschlrmtext 
CAS Chemical Abstracts Service 
CCITT Comité Consultatif International Télégraphique et Téléphonique 
CD-I Compact Disk - Interactive 
CD-ROM Compact Disk - Read Only Memory 
CD-ROM/XA Compact Disk - Read Only Memory/eXtended Architecture 
CDTV Commodore Dynamic Television 
CEC Commission of the European Communities 
CEPT Conférence Européenne des Postes et Télécommunications 
CIT Communications & Information Technology Research 
CMEA Council for Mutual Economie Assistance 
DG-XIII CEC Directorate-General for Information Technologies and 
Industries, and Telecommunications 
DG-XVI CEC Directorate-General for Regional Development 
DPC Database Promotion Centre (Japan) 
DTMF Dial Tone Multi-Frequency 
DVI Digital Video Interactive 
EC European Community 
ECU European Currency Unit 
ECHO European Commission Host Organisation 
EFTA European Free Trade Association 
EIIA European Information Industry Association 
ESA/IRS European Space Agency / Information Retrieval Service 
EUROLUG EURopean OnLine User Group 
Eusidlc European Association of Information Services 
GIS Geographical Information Systems 
IBC Integrated Broadband Communications 
IBM International Business Machines 
ICT Information and Communication Technologies 
IIA Information Industries Association (US) 
IMO Information Market Observatory 
IMPACT Information Market Policy ACTIons 
INSPEC INformation Services for the Physics and Engineering Communities 
ISDN Integrated Services Digital Network 
ISO International Standards Organisation 
JAPIO JApan Patent Information Office 
JICST Japan Information Centre for Science and Technology 
JPEG Joint Photographic Expert Group (ISO) 
LAB Legal Advisory Board 
LAN Local Area Network 
LFR Less Favoured Regions 
MCC Maxwell Communication Corporation 
MDC Mead Data Central 
MITI Ministry of International Trade and Industry (Japan) 
MPEG Motion Picture Expert Group (ISO) 
'I* 
NSF National Science Foundation (US) 
OECD Organisation for Economic Co-operation and Development 
ONP Open Network Provision 
PC Personal Computer 
PRS Premium Rate Services 
PSTN Public Service Telephone Network 
PTO Public Telephone Operators 
RACE Research & development in Advanced Communications in Europe 
RBOC Regional Bell Operating Company 
RTD Research and technological development 
SDI Selective Dissemination of Information 
SEM Single European Market 
SME Small and Medium Enterprises 
STAR Special Telecommunications Action for Regional development 
STM Science, Technology and Medicine 
TFPL Task Force Pro Libra Ltd (UK) 
VADS Value Added Data Services 
VANS Value Added Network Services 
WORM Write Once Read Many (optical disk standard) 
ivl 
Annex III: Lie-fc. o-p publ ications 
Arnold, Steven A. The Information factory: a profile of Japan's information and 
database Infrastructure. Infonortics Ltd, 1991. 
Analysis of Industry prospects for optical storage compact disk products 
(volume 4 draft). Understanding & Solutions, August 1991. 
Can the hosts make money? [Videotex special report]. Videotex International 
15 January 1992, page 1. 
CD-ROM databases: a survey of commercial publishing activity. Database 
February 1992. 
CEC/EIIA co-ordinated survey of professional hosts and information providers in 
the European Communities 1989/90 (final report). European Information Industry 
Association, April 1992. 
Les chiffres 1991 In La Lettre de Télétei. Supplement, April 1992. 
CMEA 90 (final report). Frank-Michael Bahr, Political Consulting and Technology 
Assessment, June 1991. 
Databases in Japan. IMO Working Paper 91/3, December 1991. 
Directory of online databases. Cuad ra/E 1 sev 1er ( b 1 enn i a 1 ). 
EUSIDIC/EUROLUG survey of public data networks In Europe 1991. EUSIDIC, 
1991. 
Information UK 2000: an overview of the European information scene. Electronic 
Publishing Services Ltd for the British Library, March 1990. 
New opportunities for publishers in the Information Industry: a strategic study 
(interim report). Consulting Trust GmbH, June 1992. 
Overview of the EC videotex market 1990/91. IMO Working Paper 92/4, April 
1992. 
Les services videotex professionnels en Europe: Impact sur le marché des bases 
des données (rapport final). Quadrature, October 1991. 
Summary results of 1991 executive panel. IMO Working Paper 92/1, January 
1992. 
Understanding information: business, technology and geography (ed. K. Robins). 
Belhaven Press, 1992. 
Value added services In Western Europe 1992. CIT Research, 1991. 
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