Digital Dark Horse Newspapers

Media Mirror on the Wall, Who's the Fairest of Us All? Forbes ASAP

The perennial question of all suitors of fate and fortune now whispers and resounds through conference resorts, executive retreats and consulting sessions across the land as business leaders from Hollywood to Wall Street pose with pundits and ponder the new world of converging technologies. Symbolized in a famous mandala by MIT’s Media Lab, this grand fondue of information tools — to be served la carte on a flat-panel screen — is foreseen to be a $3.5 trillion feast for American business sometime early next century. Few would guess that crucial to the emerging mediamorphosis — as king of the flat panel — will be a slight, graying, bearded man with some 30 teddy bears, Roger Fidler.

Fidler coined the term mediamorphosis as the title of his forthcoming book. His office in Boulder, Colo., looks out on the panorama of a picturesque downtown of red brick and neo-Gothic, surrounded by the Rocky Mountain foothills and sepia sandstone buildings of a mile-high Silicon Valley. Down the hall is an Apple Computer media center which is developing graphical forms of AppleLink, the company’s on-line network. Down the block is Cablelabs, John Malone’s research arm, which is designing the future of the cable industry.

Roger Fidler, though, is a newspaperman, a veteran of some 32 years in a business little known for technology. Beginning as an 11-year-old paperboy in Eugene, Oreg., Fidler went on to serve as a reporter, science columnist and art director before launching what is now Knight-Ridder Tribune Graphics. A multimillion-dollar business and reliable profit center, this venture provides digital graphics for newspapers and video animations for TV stations across the country over a dedicated network called PressLink, also launched by Fidler. Now Fidler and his allies working in Knight-Ridder’s Information Design Laboratory are concocting an audacious plan to make the lowly newspaper the spearhead of the information economy.

Most information companies and executives are betting on him to fail. Barry Diller, the former ruler of 20th Century Fox, recently circled the planet of technology on a celebrated pilgrimage from Hollywood to find where the money would be made in the new information economy. Shunning Fidler’s little lab, he arrived at nearby Cablelabs and resolved on home shopping through cable TV. He bought into QVC for some $20 million and went into business with John Malone. After a more corporate investigation, featuring polls and customer surveys, Robert Allen of AT&T settled to a remarkable degree on the $14 billion market in electronic games. Since launching an alliance with Sega, AT&T has been collecting game companies as compulsively as your kid collects games. It has bought shares of Sierra Online, 3DO, Spectrum HoloByte and PF Magic.

Moving toward the news trade is IBM. But rather than collaborating with one of the thousands of newspapers that use its equipment, the computer giant is trysting with General Electric’s NBC in a kind of elephants’ waltz into the sunset of old broadcast media.

Most of these leaders in the new gold rush toward multimedia are getting it wrong. Fixated by market surveys that map demand for existing video, they are plunging down dead ends and cul-de-sacs with their eyes firmly focused on the luminous visions in their rearview mirrors. Blockbuster, Nintendo and other game and video vendors have good businesses, for the moment, but they are ballast from the past.

News In The Microcosm

The leader who best comprehends the promise of the next phase in information technology may be Fidler of Knight-Ridder. A student of electronic technology, he has grasped an amazing and rather obscure fact: of all the information providers, only newspapers are fully in tune with the law of the microcosm.

Based on the constant rise in the computing power of individual microchips relative to systems of chips, the law of the microcosm dictates that power will continually devolve from centralized institutions, bureaucracies, computer architectures and databases into distributed systems. On the most obvious level, it caused the fall of the mainframe computer and the companies that depended upon it, and assured the ascent of personal computers and workstations. In the next decade, the law of the microcosm will assure the displacement of analog television, with its centralized networks and broadcast stations, by computer networks with no center at all. While offering a cornucopia of interactivity, computer networks can perform all the functions of TV.

With the cost-effectiveness of chips still doubling every 18 months, the law of the microcosm is not going away. Now it dictates that of all the many rivals to harvest the fruits of the information revolution, newspapers and magazines will prevail.

The secret of the success of the newspaper, grasped by Roger Fidler, is that it is in practice a personal medium, used very differently by each customer. Newspapers rely on the intelligence of the reader. Although the editors select and shape the matter to be delivered, readers choose, peruse, sort, queue and quaff the news and advertising copy at their own pace and volition.

In this regard, newspapers differ from television stations in much the way automobiles differ from trains. With the train (and the TV), you go to the station at the scheduled time and travel to the destinations determined from above. With the car (and the newspaper), you get in and go pretty much where you want when you want. Putting the decisionmaking power into the hands of the reader, the newspaper accords with the microcosmic model far better than TV does. Newspaper readers are not couch potatoes; they interact with the product, shaping it to their own ends.

Computers will soon blow away the broadcast television industry, but they pose no such threat to newspapers. Indeed, the computer is a perfect complement to the newspaper. It enables the existing news industry to deliver its product in real time. It hugely increases the quantity of information that can be made available, including archives, maps, charts and other supporting material. It opens the way to upgrading the news with full-screen photographs and videos. While hugely enhancing the richness and timeliness of the news, however, it empowers readers to use the “paper” in the same way they do today — to browse and select stories and advertisements at their own time and pace.

Until recently, the expense of computers restricted this complementarity to newsrooms and pressrooms. The news today is collected, edited, laid out and prepared for the press by advanced digital equipment. Reporters capture and remit their data in digital form. But the actual printing and distribution of the paper remain in the hands of printers and truckers.

Now the law of the microcosm has reduced the price of personal computers below the tag on a high-end TV and made them nearly coextensive with newspapers. Newspapers and computers are converging, while computers and televisions still represent radically different modes. It is the newspaper, therefore, not the TV, that is best fitted for the computer age.

Newspapers can be built on foundations of sand — the silicon and silica of microchips and telecom. Not only does the computer industry generate nearly three times the annual revenues of television but computer hardware sales are growing some eight times faster than the sales of television sets. By riding the tides of personal computer sales and usage, newspapers can shape the future of multimedia.

High-definition PC displays will benefit text far more than images. The resolution of current NTSC (National Television Standards Committee) analog television — 62 dots per inch — is actually ample for most images, particularly the studio-quality forms that can be converted for digital delivery over fiber-optic lines. Even the conventional interlaced TV screen — in which alternate lines are filled in every second — easily fools the eye for video. But for fully readable text you need the 200 to 300 dots per inch of a laser printer or super-high-resolution screen. Such screens are now being developed. Overkill for most images, they could supply the first display tablets with screens as readable as paper.

Fat Panel’s Digital Newspaper

After the “Rocky Mountain High” panorama, the first thing you see in Roger Fidler’s office is a more modest tableau. At a round table in the corner is a huge teddy bear he calls Fat Panel. Fat Panel is poised to read a tablet that looks very much like a newspaper, but in fact is a flat-panel screen some nine inches wide, a foot high and a half-inch thick. Weighing a little over a pound, far less than the Sunday edition of your local newspaper, this device — call it a newspanel — might contain a trove of news, graphics, audio and even video, representing more than a year of Sunday papers. Through fiber-optic lines and radio links, it might connect to databases of news and entertainment from around the world.

On the face of this tablet is something that looks a lot like the page of a newspaper. It contains headlines for featured stories followed by their first few paragraphs and a jump to an inner page. The jump, unlike that in your usual newspaper, is electronic and immediate. You click an arrow with a pen or a mouse — or in the near future, say the word — and the rest of the story almost instantly appears. If your eyes are otherwise engaged, you can click on an audio icon and have the story read aloud to you.

Discreetly placed on the bottom of the panel are three sample ads. Since ads currently supply some 80 percent of the revenues of many newspapers and magazines, the entire system will rise and fall on the effectiveness of the ads. However, electronics promises a more total revolution in advertising than in any other facet of the newspaper outside of printing. This change comes none too soon. As shown by a general drop in margins from 30 percent in the mid-1980s to close to 10 percent last year, newspapers are suffering a sharp decline in conventional advertising revenues, only partly compensated for by an influx of funds from blow-in coupons and inserts.

In a 1988 prophecy at the American Press Institute in Reston, Va., Fidler envisaged electronic newspanel ads in the year 2000: “When you touch most ads, they suddenly come alive. More importantly, advertisers can deliver a variety of targeted messages that can be matched to each personal profile. An airline ad offering discount fares to South America attracts me with the haunting music of an Andean flute. I’m planning to take some vacation time in Peru next month [Fidler’s wife is a Peruvian recording artist], so I touch the ad to get more information. Before I quit, I’ll check the ad indexes to see if any other airlines are offering discount fares. With the built-in communicator, I can even make my reservations directly from the tablet if I choose. The airline’s reservation telephone number is embedded in the ad, and my credit card numbers and other essential data are maintained in the tablet, so all I would have to do is write in the dates and times that I want to travel and touch a button on the screen. The information is encrypted as well as voice-print protected, so there is no risk of someone else placing orders with my tablet.

Contrary to the usual notion, the electronic newspaper will be a far more effective advertising medium than current newspapers, television or home shopping schemes. Rather than trying to trick the reader into watching the ad, the newspaper will merely present the ad in a part of the paper frequented by likely customers. Viewers who are seriously interested in the advertised item can click on it and open up a more detailed presentation, or they can advertise their own desire to buy a product of particular specifications.

In deference to Fidler, who currently combs the world looking for the best flat-panel screens, Fat Panel appears to be perusing a story on field emission displays (FEDs). Even cathode ray tubes with VGA graphics command only 72 dots per inch of resolution. This has been shown to slow down reading by some 25 percent compared with paper. Readers of Voyager Co.’s tomes on Mac PowerBooks quickly discover that even Susan Faludi’s breezy Backlash or Michael Crichton’s compulsive Jurassic Park or James Gleick’s normally riveting biography of Richard Feynman bog down in subtle but insidious typographical fuzz. A newspaper with more than one item on the screen would be worse. The age of electronic text entirely depends on the development of screens with the definition of a laser printer. For this purpose, FEDs offer great long-term promise.

While the prevailing liquid crystal displays (LCDs) merely reflect or channel light, FEDs emit light like a cathode ray tube. Indeed, as currently envisaged by a Micron Display Technology process, FEDs will array millions of tiny cathode light emitters that allow bright displays with high resolution and full-motion video. Although today’s FEDs require too much power for full portability with current battery technology, they represent an inviting option for newspaper tablets at the turn of the century.

Usable tablets, however, will arrive long before then. At the August Siggraph show, Xerox demonstrated a 13-inch-diagonal liquid crystal display with a record 6.3 million pixels, delivering 279 dots per inch of resolution. The 279 dots per inch provide some three times more definition than the screen of a Sun workstation — the current desktop graphics workhorse — and negligibly short of the 300-dot resolution of a laser printer.

Beyond resolution, the key to the newspaper tablet is portability. Portability means low power. Active-matrix LCDs are inherently a high-power, low-transmissive medium. The crystals absorb light; the polarizer wastes half the light; the transistors at each pixel squander power. For high contrast, backlighting is essential. That sinks another 20 to 30 watts. The higher the resolution, the worse all these problems become.

Full-Motion Images Or Full-Motion Users?

According to the Fidler vision, the U.S. should stop emulating the Japanese, who boldly invested some $12 billion in manufacturing capacity for power-hungry liquid crystal displays used on notebook computers and flat-screen TVs. Urged by the Clinton administration, this U.S. industrial policy is based on a strategy of “catch up and copy,” and it will fail. Rather than chase the Japanese by achieving high resolution at high power to compete with cathode ray tubes, the U.S. should target high resolution at low power to compete with paper.

As in semiconductor electronics, the winners will follow a strategy of low and slow. The law of the microcosm ordains exponential performance gains from slower and lower-powered transistors packed ever closer together on individual microchips. Throughout the history of semiconductors — from the first transistor to the latest microprocessor — the industry has succeeded by following this law: replacing faster and higher-powered components with smaller, slower and lower-powered devices. When you pack enough of the slow and low transistors close enough together, your system may end up operating faster than a supercomputer based on the highest-powered and fastest discrete transistors. And it will definitely be more efficient in MIPS per dollar.

The law of the microcosm has not been suspended for displays. The Japanese have been focusing on high-powered screens capable of reproducing the features of low-end CRTs: full-motion color video. Rather than favoring full-motion video, however, the U.S. should foster full-motion readers through low- powered and slow components. It is the people rather than the pixels that should be able to move. Speed will come in due course.

Demonstrating the first prototype of such a system is Zvi Yaniv of Advanced Technology Incubator (ATI) of Farmington Hills, Mich. Long among the most inventive figures in America’s eternally embryonic flat-panel industry, Yaniv was a founder of Optical Imaging Systems, currently the leading U.S.-based producer, with well under one-percent global market share.

For his tablet, Yaniv uses a material invented at Kent State University in Ohio called Polymer Stabilized Cholesteric Texture (PSCT). On it he inscribes pixels in the form of helical liquid crystal devices. The helices are chemically doped to give them a specific reflectivity: showing all wavelengths or colors of light that do not match the resonant wavelengths in the helix.

So far ATI has demonstrated images in black and white and in 16 levels of gray scale. Color, according to Yaniv, poses no theoretical problems. Based on current experimental successes, it will be achieved within the next two years. For the first newspanels, however, color is less important than the high-resolution text capability, which ATI delivers at a breakthrough price.

This technology offers four key advantages over the active-matrix 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.

George Gilder

Senior Fellow and Co-Founder of Discovery Institute
George Gilder is Chairman of Gilder Publishing LLC, located in Great Barrington, Massachusetts. A co-founder of Discovery Institute, Mr. Gilder is a Senior Fellow of the Center on Wealth & Poverty, and also directs Discovery's Technology and Democracy Project. His latest book, Life After Google: The Fall of Big Data and the Rise of the Blockchain Economy (2018), Gilder waves goodbye to today's Internet.  In a rocketing journey into the very near-future, he argues that Silicon Valley, long dominated by a few giants, faces a “great unbundling,” which will disperse computer power and commerce and transform the economy and the Internet.