Implications of Electronic Mail and Message Systems for the U.S. Postal Service

Ch. 3-Market Penetration Model and Technology Assumptions .31

documents. Five percent penetration in this
market for Generation III is not expected to
occur until 1985.
Generation III systems will begin to replace
advertising within the nonhousehold sector
when "online" catalogs and order entry sys
tems are implemented between corporate buy
ers and their suppliers. Such systems will re
quire extensive software development and
standardization. Thus, OTA projected an addi
tional 2 years (compared to bills and state
ments) to reach a 5 percent penetration of
advertising (1987).
Generation III systems involving the house
hold as either sender or receiver will be paced
by the rate of acceptance of one of three prin
cipal home terminal technologies the home
computer terminal, the video based viewdata/
teletext terminal, and the inexpensive home
hardcopy receiver.
A home computer terminal or its equivalent
will be required for households to originate cor
respondence. As discussed above, OTA pro
jected that a 5 percent market share for mes
sage services using home terminals would oc
cur about 1987. By that time, however, many
standards issues relating to home computer
services are likely to have been resolved.
Hence, OTA assumed very rapid initial
growth (40 percent) for Generation III corre
spondence and other nonadvertising messages
between households and nonhouseholds.
For correspondence between households,
Generation III EMS growth is expected to be
slower, since both sender and receiver must
be equipped with a terminal device. For exam
ple, with 50 percent of households equipped,
only 25 percent of household pairs on the aver
age would have a terminal available at both
ends. For this reason, the projected initial
growth rate for household household Genera
tion III EMS correspondence is slower (20 per
cent).
Viewdata/teletext systems are most likely
to penetrate the advertising and greeting card
segments involving household receivers,
though the maximum penetration potential is

limited. These systems are projected to
achieve a 5 percent market share somewhat
ahead of home computers OTA estimated
1985. Advertising by viewdata/teletext is ex
pected initially to grow very rapidly (40 per
cent), since it is paced only by availability of
the home receiver. The greeting card segment
is likely to grow slowly, again because of the
requirement that both sender and receiver be
equipped.
The use of Generation 111 EMS services to
transmit bills and financial statements to
households requires home terminals as a pre
requisite. In addition, it seems likely that
many consumers will desire a hardcopy of
their statements or bills for tax records and
other purposes, thus making consumers more
reluctant to accept bills and statements over
a viewdata like terminal. OTA assumed that
home hardcopy equipment sales will be
delayed 3 years behind video terminal sales
and will grow at a slower rate, thus affecting
the use of Generation III for bills and state
ments. OTA estimated that inexpensive hard
copy printers capable of reproducing the con
tents of a TV display will be produced in vol
ume quantities for under $200 (1980 dollars)
per unit when market penetration reaches 5
percent (1990).

Relationships
Generation
Generation III

Between
II and
Estimates

Generation II growth rate and timing esti
mates are not assumed to have any significant
effect on the rate or timing of mail diversion
to EFT systems or on the rate and timing of
Generation III growth. The latter assumption
may seem surprising at first since Generation
II and III are in some sense competing. How
ever, while the decision to send messages by
Generation II as opposed to conventional mail
is almost entirely at the discretion of the
sender, the decision to receive mail electronic
ally and hence via Generation III is large
ly at the discretion of the receiver. Thus, if
Generation III is available, the recipients of

United States. Congress. Office of Technology Assessment. Implications of Electronic Mail and Message Systems for the U.S. Postal Service. UNT Digital Library. http://digital.library.unt.edu/ark:/67531/metadc39480/. Accessed December 19, 2014.