(This is a transcript of an actual live presentation made at the Multimedia Expo in San Jose, California, October, 1993.)
What will be the technology of the future mass media? The answer is simple and it is certain. It is digital.
If you crack open a microwave oven, a computer, a clock, a videogame console, a smart telephone, a TV set, a fax machine, an automobile, or an electronic piano, you will find inside some silicon chips. In all sorts of machines, digital technology is replacing gears, cogs, tubes, strings, springs, and things.
This has been called the Great Convergence. Many different things are becoming the same thing as they are reimplemented with digital technology. If you look at it strictly in terms of the technology, the convergence is coming along nicely. But if you look at it in terms of business and society, it is not converging, it is wildly diverging, unable to keep up with the technology, resulting in the Great Confusion.
So, what's the difference between a television set and a telephone? The answer was once obvious. It is getting less clear, because they are made of the same stuff.
What is the difference between a cable television company and a telephone company? That is also getting less and less clear as the cable companies announce their intention to carry telephone traffic, while the telephone companies hope to deliver video.
Telephone companies have gone from being the most stable of companies to endangered species as the pressure of digital technology tears down the traditional boundaries that once differentiated industries and protected them from each other.
Once a big happy monopoly, the phone companies are now under attack. The weapons of their enemies are transistors, lasers, and optical fibers, which, ironically, were all invented by the phone company.
Having experience in the technology doesn't necessarily equip you for the confusion. No one knows this stuff better than the computer industry. For example, IBM no longer seems to know what business they are in or in what direction their future lies. What chance then does a company have that doesn't understand what DIGITAL means?
And so we find ourselves in a period of Great Confusion. Out of this will come a new mass medium, which will either absorb or significantly transform everything that came before. That's what I think anyway.
We are a long way from the point where it is obvious what the new medium is going to be, though you might not know that from what you hear at this conference.
In the computer industry, the way you establish a standard is by convincing enough people that you are right. If you can get the right consultants, editors, competitors, and even some customers to agree that you are right, then it turns out that you are, even if your really aren't. If you can turn enough influential early adopters, then you can establish yourself without giving the bulk of the market a choice. Microsoft has been particularly successful at this.
The computer industry has been eager to press an early advantage, declaring that the New Medium is a simple amalgam of PC and CD-ROM. They have been hyping it for years, but it isn't taking off.
The reason is simple: The Mass Market doesn't respond the same way as the Data Processing market. The Mass Market isn't interested in support for mission critical applications. It has a more important concern: It wants value.
This is first semester stuff, but it seems to have completely eluded the computer-centric new media folks. Walk up to an exhibitor on the trade show floor, and ask him if his wares are "good enough." Chances are he'll say "Yes! What?"
So it should come as no surprise therefore that Hollywood is interested in these dreams that stuff is made of. They can see that this business is mostly just hype, and nowhere do they do hype better than in the entertainment capital of the world!
There is also an art crowd that has grown up around this stuff. Producing multimedia can be fun, and is much easier to get funded than a motion picture. The problem is that there seem to be more people who want to make it than there are consumers who want to buy it.
And ever since Hollywood figured out which side its bread is buttered on in home video, it is receptive to any notion which says they can sell their products in yet another format and get more money for free.
There is a lot of hype around the whole Hollywood meets Silicon Valley thing. Most of it is mercifully forgotten after the press conference, but some of it has been great, like the digital film production techniques which were pioneered at Industrial Light & Magic.
But while movie special effects continue to get better, CD-ROM is a rapidly aging 10-year old technology, which at the present rate of technological evolution is very old indeed. It is an evolutionary dead end.
The future is in networks.
What will be the technology of the future communications networks? We know with absolute certainty that it is digital. Someday, all telephone networks will be digital. The telephone companies know that this is true, they know that they must do it to remain competitive, they know how to build it. Technology is easy. Comedy is hard.
The part they are unsure of is how to make money at it. They are under attack in exactly the same way they attacked the telegraph companies a century ago. They know they have to adapt, but they don't know what to become, and even if they did, regulatory restrictions may constrict them. So we have seen what had once been very respectable companies doing outrageous things like speculating in videogames, or conducting an expensive advertising campaign to sell products that don't exist.
The thing that makes telecommunications so wonderful is also what makes it so difficult. It is only really useful when everyone is hooked up. Full deployment of a new technology is extremely expensive. And because technology advances so quickly, there is a significant risk that the wrong technology will be used. By definition, it is large scale.
Unlike multimedia, a phone company can't sell 40,000 units of something and then declare that they've established a billion dollar industry. They have to do it for real and the stakes are very high.
It is frightening. Fail to act: extinction. Move, you have a chance. But take the wrong step: extinction.
It is like we're at the end of the Corporate Cretaceous Period. The big dinosaur companies somehow know that they lack the genetic material to survive in the next age, so they are madly mating with each other, hoping to find the assets and intelligence to continue to dominate in the next age.
And so we've been witnessing the Dance of the Dinosaurs, where they go pairing off in unexpected ways, each hoping that the other knows where it's going. It's like a crazy high stakes game of follow the loser.
This state of chaos cannot exist for long. We will eventually reach the point where it is obvious what the New Medium is, and when that happens, we will see a rapid transition to a new state of stability. In the process we will see some companies fail, some industries diminish, and amazing wonderful things seeming to come out of nowhere.
The new medium will be the largest open system in the world. It will reach everyone. It will be inherently secure. It will transform the Global Village into a community. It will make money for a lot of people.
A new medium that is less than that will not dispel the confusion.