The death of Ceefax shows that change is the enemy of high-tech businesses.
On the BBC News website, Financial Times columnist Matthew Engel today waved a fond farewell to Ceefax, the BBC's teletext service.
Before the Internet was Ceefax
Engel's homage to Ceefax ('see facts') -- the BBC's broadcast teletext service since 1974 -- comes as the analogue TV signal is switched off in London. Other parts of the UK lost Ceefax as much as two years ago, during the early stages of the roll-out of digital television.
The good news is that the UK's switch from an analogue to a digital TV signal brings many advantages, including an increase from five terrestrial channels to 40 Freeview channels. Even so, like Engel, I used to be a Ceefax addict, so I too mourn its demise.
Ceefax isn't quite dead yet (it can still be found in Kent, the North East, Northern Ireland and Sussex), but its days are numbered. Six months from now, Ceefax will finally die, superseded by the BBC's interactive Red Button service by October 2012.
Ceefax for shares
As a private investor since 1987, I first started using Ceefax to check share prices 25 years ago (always starting at page 200 for business news). I remember well the patient wait for Ceefax to cycle through, say, eight pages so that I could view a particular share price.
Even though these prices were delayed 20 minutes and updated only every 15 minutes, they were the best free quotation system available to small investors in those days.
What's more, I can remember returning from a holiday outing on the afternoon of 11 September 2001, switching on Ceefax first and seeing pages and pages of red quotes, signifying that share prices had fallen right across the board. Only when I flicked off Ceefax did I see the full horror of the attacks.
Onwards and upwards
Of course, all things must pass -- and Ceefax is no match for the Web when it comes to up-to-the-minute, interactive news, sport, weather and TV listings. Indeed, ITV and Channel 4 closed their Teletext service in December 2009, with Channel 5 following suit last year.
From late 1993 onwards, my reliance on Ceefax started to fade, as I gained Internet access at work and home and began using various websites to check share prices and monitor stock portfolios. To be honest, I didn't really miss Ceefax, as its online rivals were faster, easier to use and graphically far superior. However, nostalgic fans can check out the Teletext Museum.
In summary, Ceefax ran for 38 years and, at its peak, had 2,000 pages of information and was checked by a third of the UK population each week. In many ways, it was truly the Internet of its time.
Of course, the point here is that even the most well-established technology can be blown away -- sometimes slowly, sometimes overnight -- by a superior product or a better business. It's what Austrian-American economist Joseph Schumpeter called the 'creative destruction' of capitalism.
In other words, in free markets, the strong drive out the weak in a process of continuous corporate Darwinism. However, thanks to their incredibly strong household brands, it's a tough call to unseat consumer behemoths such as Coca-Cola (NYSE: KO.US) and Unilever (LSE: ULVR).
On the other hand, barriers to entry are far lower in the technology sector, where established companies can be brought to their knees by latecomers, relative upstarts and even 'one smart guy in his bedroom'.
For example, during the Nineties dotcom boom, AOL (NYSE: AOL.US) was the Big Daddy of the Internet. Alas, following a disastrous merger with Time Warner (NYSE: TWX.US), AOL lost ground to the likes of Yahoo! (NASDAQ: YHOO.US), Google (NASDAQ: GOOG.US) (born in 1996) and soon-to-be-listed Facebook (created in 2004).
In short, the demise of Ceefax holds up a mirror to the world of technology. It reminds us that today's must-have computers, consoles, software and applications can be tomorrow's junk -- as can be the companies selling them!
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