George Gilder Essay: Digital Darkhorse - Newspapers [2 of 2]

[David Farber <farber () central cis upenn edu>]

LCD: no transistors, no polarizers, no color filters, no backlighting.
Without these power-and space-hungry features, Yaniv's screens can
achieve higher density of pixels at far lower energy use.  This adds
up to far higher resolution at milliwatts of power (rather than 20
watts) and at far higher manufacturing yields, and thus far lower
cost.  Yaniv predicts screens with laser-printer resolution and with
contrast higher than paper, costing between $1 and $2 per square inch
(compared with around $10 for current active-matrix devices).  That
means 8-1/2-by-11-inch tablets for $100 to $200 in manufacturing cost,
well under Fidler's target price.


     Still an R&D project in an intensely competitive industry, ATI
may not have all the answers, but it points the way to a solution.
Within the next three or four years, a portable tablet with
laser-printer resolution and contrast and with hundreds of megabytes
of solid-state or hard disk memory will be purchasable for an
acceptable price.  Fat Panel's tablet is not merely a toy; it is the
token of a technology that will sweep the world.


NEWS ON THE NET


     Meanwhile, precusor solutions are being rolled out on personal
computers, Newtons, Zoomers and other personal digital assistants.
Already collecting and transmitting copy in digital form, reporters
and editors could just as well provide digital content to all the
other platforms that are emerging in the 1990s, from tiny portable
personal communications services to supercomputer knowledge bases.


     Also empowering the newspaper industry will be the exploding new
world of boundless bandwidth or communications power in both the
atmosphere and the fibersphere (see Forbes ASAP, December 7, 1992, and
March 29, 1993).  One of the most difficult concepts for many business
planners to grasp is the onset of bandwidth abundance: the idea that
the electromagnetic spectrum is not scarce but nearly limitless.  The
text of a daily newspaper takes up about a megabyte; a hundred or so
black-and-white photographs take up about 100 megabytes; 25 color
photos could run another 100 megabytes, or even a gigabyte, depending
on resolution.  Video clips would take about 100 megabytes apiece.
With just 500 megabytes, you could throw in the entire "MacNeil/Lehrer
News Hour."


     Summing it all up, the total bit-cost of a paper, including
video-rich ads, might be comparable to that of a two-hour
movie_perhaps two gigabytes with compression.  Two gigabytes can be
transmitted in a second down fiber-optic lines, in perhaps 10 seconds
down a gigahertz cable connection, and in perhaps a matter of three or
four minutes down a twisted-pair copper line equipped with
Asymmetrical Digital Subscriber Loop (ADSL) technology, Amati Corp.'s
amazing new phone-company access system.  From Digital Equipment Corp.
and Zenith to Hybrid Technologies and Continental Cablevision, several
firms are demonstrating impressive ways to use cable lines for two-way
digital data transmission at a rate of 10 megabits a second or more,
which would fill up a two-gigabyte newspanel in just over three
minutes.  Electrical power companies also are laying fiber along with
their power lines.  All these pipes are little used for long hours of
the night and could be employed to deliver newspapers.


     Complementing this web of wires will be wireless methods of
delivery.  Cellular technology is moving toward a code division
multiple access (CDMA) protocol that allows use of the entire spectrum
every mile or so, and toward millimeter wave frequencies that offer
gigahertz of capacity.  Again, access to these systems might be
expensive on a demand basis, but a newspaper can be sent whenever
space or time is available.  Delivery of the basic paper through wires
and fiber and delivery of short updates and extras via the air would
be optimal.  Whatever electronic or photonic techniques are used, the
laws of the microcosm and telecosm ordain that distribution of
newspapers will become vastly cheaper, more efficient and more timely
than their present methods: trucks and bicycles.


THE "DOMONETICS" OF THE WORD


     The future of newspapers will not depend on technology alone,
however.  The ultimate strength of the "press" comes not from its
machinery but from its "domonetics"_a word that describes an
institution's cultural sources and effects.


     Judeo-Christian scripture declares that in the beginning was the
word.  There is no mention of the image.  Today in information
technology, the word still widely prevails.  In 1992, trade
publications, newspapers and magazines alone generated some $73
billion in sales, compared with television revenues of $57 billion.


     In general, images are valuable as an enhancement to words. As
Robert Lucky of Bellcore has pointed out, images are not in themselves
usually an efficient mode of communication.  In his definitive work
"Silicon Dreams," just released in a new paperback edition, Lucky
writes that after an evening of television, "we sink into bed, bloated
with pictorial bits, starved for information."


     People who gush that a picture is worth a thousand words usually
fail to point out that it may well take a million computer "words" to
send or store it.  Written words are a form of compression that has
evolved over thousands of years of civilization.  In a multimedia
encyclopedia, such as Microsoft's Encarta, some 10,000 images take up
90 percent of the bits, but supply perhaps one-100th of the
information.  With the pictures alone, the encyclopedia is nearly
worthless; with the words alone, you still have a valuable
encyclopedia.  Most of the work and the worth are in the words.
Supremely the masters of words, newspapers can add cosmetic pictures,
sounds and video clips far more easily than TV or game machines can
add reporting depth, expertise, research and cogent opinion.


     More profoundly, the domonetics of the new technologies strongly
favors text-based communications.  Video is most effective in
conveying shocks and sensations and appealing to prurient interests of
large miscellaneous audiences.  Images easily excel in blasting
through to the glandular substrates of the human community; there's
nothing like a body naked or bloody or both to arrest the eye and
forestall the TV zapper.


     TV news succeeds because of timeliness and vividness.  Compared
with TV imagery, news photos tend to be late and lame.  Nonetheless,
for all its power and influence, broadcast television news is a dead
medium, awaiting early burial by newspapers using new technologies.


     The TV news problem is summed up by the two-minute rule_the usual
requirement that, short of earthquake or war, no story take more than
two minutes to tell.  This rule even applies to the epitome of
broadcast news_CNN.  It is entirely a negative rule.  The reason for
it is not that the audience desires no more than two minutes of
coverage of stories of interest.  On any matter deeply interesting to
the viewer, two minutes is much too little.


     The rationale for the two-minute rule is that the viewer will not
tolerate more than two minutes of an unwanted story.  Its only
function is to forestall the zapper, but its effect is to frustrate
any viewer with more than a superficial interest in a story.
Increasingly it reduces TV news to a kaleidoscope of shocks and
sensations, portents and propaganda, gossip and titillation.


     The new technologies, however, put individual customers in
command.  Making their own first choices among scores of thousands of
possibilities, individuals eschew the hair-trigger poise of the
channel surfer.  Narrowcasting allows appeal to the special interests
and ambitions, the hobbies and curiosities, the career pursuits and
learning needs of particular individuals.  Thus, the new media open up
domonetic vistas entirely missed by mass media.


     At the domonetic elevation of newspapers, images are
supplementary, not primary.  The new technologies thus favor text over
pure video because text_enhanced by graphics where needed_is by far
the best (and digitally most efficient) way to convey most information
and ideas.  Where graphics are overwhelmingly more efficient than
alphanumerics_as in visualization of huge bodies of data or
statistics_the newspanel can supply true computer graphics and
simulations.  Interactivity, after all, is the computer's forte.


THE $700 MILLION INCENTIVE


     As early as 1981, Fidler saw and predicted that computer
technology using flat-panel screens would allow the newspaper business
to eliminate much of its centralized manufacturing and printing plant
and much of its distribution expenses, and deliver the product
directly to the customer at half the cost.  He saw that this process
would jeopardize neither the branded identity nor the editing
functions nor the essential character of the paper.  The distribution
of intelligence would simply permit the customer rather than the
newspaper to supply the display and the printer.  This microcosmic
shift would drastically simplify and improve the accessibility and
worth of the information, enhancing the value of newspaper archives
and other resources.  This step could theoretically save Fidler's
employer, Knight-Ridder, some $700 million, or between half and
two-thirds of its current costs.


     Fidler's vision is just as promising for magazines.  In effect,
his concept allows newspapers to combine the best features of daily
journalism with the best qualities of specialty magazines.  The front
pages and shallower levels of the system will still function like a
streamlined newspaper, which readers can browse, search and explore as
they do a conventional paper without thrashing about through the
pages.  The deeper levels will function like magazines, focusing on
business, technology, lifestyles, sports, religion or art.  Indeed, to
exalt their offerings into an ever richer cornucopia, news systems
will want to collaborate with magazines, just as they often distribute
magazines today with their Sunday papers.




THE SOUL OF THE NEW MEDIUM


     In addition, electronic magazines can excel newspapers in
providing a sense of community through interaction with other readers
and authors in new kinds of dynamic letters, bulletin boards and
classified sections.  In a sense, the news panel never ends.  Beyond
its offering of news, articles and archives, it opens into new
dimensions of interactivity.


     As Stephen Case puts it: "Everybody will become information
providers as well as consumers.  The challenge is to create electronic
communities that marry information and communications_thereby creating
an interactive, participatory medium.  This community aspect is
crucial_it is the soul of the new medium."


     The most practical current vessel for this expansion of the press
is Case's own company, America Online, a supplier of an icon-based
interface and gateway to scores of "infobases" and bulletin boards in
Vienna, Va., outside the District of Columbia.  Ten percent owned by
the Tribune Co. of Chicago, eight percent controlled by Apple, allied
with Knight-Ridder and providing access to such journals as the New
Republic, National Geographic, Time and Macworld, America Online has
uniquely focused on the vital center of the new market: the point of
convergence of newspapers, magazines and computers in new communities
of interest and interaction.


     Following this strategy, America Online has invested just $20
million (one-100th the capital of Prodigy) and devoted half the time,
to achieve nearly one-third the customer base and generate strong
profits, in contrast to huge estimated losses on the part of IBM and
Sears.  Prodigy is now paying AOL the high tribute of imitation,
making deals with Cox Enterprises Inc. and its 17 newspapers, and with
Times-Mirror.  Perhaps most audacious in pursuing this vision,
however, is Murdoch's News Corp. Ltd., which recently purchased Delphi
Internet Services Corp., the only on-line service with full Internet
access to home PC users.  Delphi already offers an array of news
programs and special-interest conferences, including a popular
computer news show led by moderator Jerry Pournelle that provides
interactive dialogs on everything from abstruse computer features to
science fiction.  Pournelle and some 300 other conference moderators
can function like editors in cyberspace.


     Internet is the global agglomeration of data networks that has
emerged from the original Pentagon research network called ARPANET.
Growing at some 15 percent a month for several years to a current
level of 10 to 20 million users, Internet has bifurcated into linked
commercial and research nonprofit divisions.  As John Evans, president
of News Corp.'s Electronic Data, puts it, explaining the Delphi
purchase: "Internet is like a giant jellyfish.  You can't step on it.
You can't go around it.  You've got to go through it."  Delphi now
plans to go through it using much quicker access systems, including
cable.


     Evans declares that these new collaborations between News Corp.
and Internet will "put the 'me' back into media."  His concept, also
shared by Nicholas Negroponte's Media Lab and Apple Computer's
Knowledge Navigator, is an automated news database ultimately
supplying the customer with a personal paper filtered from floods of
daily information by an agent programmed to pursue your own interests.
In Fidler's view, however, these digital papers will succeed only to
the extent that they transcend this vision of the Daily Me.


     Fidler prefers the vision of a Daily Us, shaped by human editors
rather than by electronic agents or filters.  According to Fidler, the
law of the microcosm will put so much intelligence and storage in the
tablet that the individual can personalize the "paper" every day in a
different way.  If, as Case puts it, the soul of the new medium is
community, the reader will want to begin in a particular context, a
specially favored "place" in the world of information, a place with a
brand name and identity: a newspaper.


THE COMPUTER IMPERATIVE


     Above all, the key to the special advantage of newspapers in the
new era is their great good fortune in being forced to focus on
computers.  It should be evident by now to everyone in the information
business that the energy, the creativity, the drive, the gusto, the
pulse, the catalyst of this industry is computers.  The magic is in
the microcosm of solid-state electronics (doubling the density of
components on a chip every 18 months) and in the concentric circles of
enterprise and invention that surge outward from this creative core:
the some 5,000 software firms, the thousands of manufacturers of
chips, peripherals, printed circuit boards and add-on cards; the
double-digit annual expansion in the armies of computer scientists and
software engineers; the ever growing millions of PC owners devoting
their creative energies and passions to this intoxicating machine.


     What the Model T was to the industrial era-the teenage training
board, the tinkerer's love and laboratory, the technological
epitome-the PC is to the Information Age.  Just as people who rode the
wave of automobile technology -- from tiremakers to fast-food
franchisers -- prevailed in the industrial era, so the firms that prey
on the passion and feed on the force of the computer community will
predominate in the information era.


     Why, then, are so many apparently ambitious and visionary
executives shrinking from the central arena to play around on the
fringes with TVs and game machines?  Why are American computer
executives standing silently aside while the so-called U.S. Grand
Alliance for the Future of Advanced Television, so-called digital
HDTV, adopts an interlaced screen technology that is fundamentally
hostile to computers?


     For images, the human eye cannot tell the difference between
interlaced and progressively scanned displays.  But interlace poses
endless problems for text and multimedia.  Apart from Zenith, the
American leaders in the Grand Alliance are AT&T, General Instrument
Corp., MIT, Sarnoff Laboratories and GE-NBC.  All but MIT capitulated
to pressure from foreign TV interests such as Sony, Thomson Corp. and
Philips Electronics to betray the American computer and newspaper
industries by adopting a display scheme unsuited for the multimedia
and text programs central to the next computer revolution.


     Without text and multimedia capabilities, high-resolution images
can open virtually no markets not already served by current "digitally
enhanced" improved-definition television displays.  Limiting the
teleconferencing market, for example, is not the resolution of the
screens but the bandwidth of the network.  Without computer
capabilities, digital TV is likely to be a large disappointment.


     Claiming to set a standard that can survive deep into the next
century, the Grand Alliance is focusing on short-term economies for
manufacturing TVs tomorrow.  These executives are all missing the
point and the promise of the era in which they live.  The Information
Age is not chiefly about kicks and thrills, offering games for kids
and so-called dildonics for "adults."  Markets for educational
programs and on-line information services are already growing much
faster than game markets.  In 1992 in the computer business, according
to the Software Publishers Association, entertainment software
revenues rose some 29 percent to a level of $342 million.  Educational
software for the home rose some 47 percent to $146 million.
Meanwhile, sales of computers with modems are rising at about 1,000
percent a year, hugely faster than the sales of TVs.  Online services
like America Online and Prodigy have been growing almost 500 percent
per year since 1988.  According to current projections based on
microprocessor CPU sales, some 50 million PCs may be sold over the
next 12 months, and perhaps three-quarters of them will contain either
on-board modems or networking systems.


     The ultimate reason that the newspapers will prevail in the
Information Age is that they are better than anyone else at
collecting, editing, filtering and presenting real information, and
they are allying with the computer juggernaut to do it.  The
newspapers are pursuing the fastest expanding current markets rather
than rearview markets.  They are targeting adults with real interests
and ambitions that generate buying power rather than distracting
children from more edifying pursuits.  In the computer age, follow the
microcosm and you will find the money, too.


                              #####




Regards,


Gordon Jacobson   Portman Communication Services  (212) 988-6288
gaj () portman com           gaj1 () eniac seas upenn edu
MCI Mail ID:  385-1533    Channel One BBS - Cambridge, MA