• DIGITAL WORLD ‘92: A MATTER OF PERSPECTIVE…

Although it is almost axiomatic at this point that digital technologies are infiltrating traditional communications media, executives from the so-called “convergence industries” — i.e., consumer electronics, computers, communications, mass media, publishing and entertainment — all have a world view peculiar to where they sit. This was particularly obvious at last month’s Digital World conference, hosted by Seybold Seminars, where a stellar lineup of keynote speakers opened and closed the conference, addressing the theme, “Erasing the Boundaries.” When all was said and done, the picture each speaker painted was eminently logical, and from their respective points of view, accurate.

So is it true, as Microsoft’s Nathan Myhrvold said, that “Somebody’s got to be wrong”? No matter what predictions the pundits make today, how the convergence takes shape is likely to be something no prognosticator short of Nostradamus could have foreseen. Meantime, their articulate points of view are a fascinating glimpse into a world in the throes of transition.

• … AND THE PERSPECTIVES THAT MATTER

This year, 74 speakers “converged” on 14 panels to discuss the vast breadth of issues affecting the inexorable march toward digital technology. Topics ranged from the changing role of the phone company to location-based entertainment, multimedia pioneers discussed candidly what went wrong with the dream of interactivity, cable TV providers expressed certainty that the visions of those pioneers were not in vain. And for the first time, Hollywood artists — including actresses Lily Tomlin and Shelley Duvall — made an appearance to say, “Keep working — we really want this stuff.”

Panelists came from all corners of the digital world. They included Ed Horowitz, of Viacom International, from the cable world; Max Whitby of the pioneering MultiMedia Corp., from London’s BBC; Brenda Laurel, virtual reality specialist, from the research labs; Nat Goldhaber, new CEO of Kaleida, from computers and software investment; Koji Hase, senior manager at Toshiba Corp., from consumer electronics; and Kathleen Tyner of Strategies for Media Literacy, from education. An eclectic crowd, their collective contribution was significant, and most illuminating to all.

• EDITOR’S NOTE

• ANDY GROVE, INTEL CORP.

• RICHARD GREEN, CABLELABS

• RON SOMMER, SONY USA

• JOHN SCULLEY, APPLE COMPUTER

• LUCIE FJELDSTAD, IBM CORP.

• ALLEE WILLIS, SONGWRITER

• NATHAN MYHRVOLD, MICROSOFT

• MIKE LIEBHOLD, AATG

• JOHN EVANS, NEWS CORP.

• THE PHONE CO.’S IDENTITY CRISIS

• NEW CONSUMER DEVICES

• THE GREAT TV DEBATE

• INTERACTIVE TV

• MULTIMEDIA COMPUTING

• CABLE, SATELLITE, CELLULAR

• ARTISTS’ RAP SESSION

• NEW MEDIA AND ART

• LOCATION-BASED THEME PARKS

• EDUCATION

• THE INTELLECTUAL PROPERTY DEBATE

• EVENTS

>KEYNOTES

‘ERASING THE BOUNDARIES’
Everyone sees the world clearly — from where they sit

Although it is almost axiomatic at this point that digital technologies are infiltrating traditional communications media, executives from the so-called “convergence industries” — i.e., consumer electronics, computers, communications, publishing and entertainment — all have a world view peculiar to where they sit.

This was particularly obvious at the Seybold Digital World ‘92 conference, where a stellar lineup of keynote speakers opened the conference, addressing the theme, “Erasing the Boundaries.”

Opening speakers were Andrew Grove, president of Intel Corp., the world’s largest manufacturer of microprocessors; Richard Green, president of CableLabs, the research consortium for the cable industry, based in Boulder, CO; Ron Sommer, president of electronics giant Sony Corp. of America; John Sculley, chairman of Apple Computer; Lucie Fjeldstad, VP of multimedia for IBM Corp.; and Allee Willis, songwriter, artist and filmmaker. Nathan Myhrvold, VP of advanced technology and business development at Microsoft; Mike Liebhold of Apple Advanced Technology Group; and John Evans, executive VP of development for Rupert Murdoch’s News Corp. brought the conference to a rousing and thought-provoking close.

A matter of perspective When all was said and done, the picture each speaker painted was eminently logical, and from their respective points of view, accurate. So is it true, as Microsoft’s Nathan Myhrvold said, and we paraphrase, “Somebody’s got to be wrong”? No matter what kinds of predictions the pundits make today, how in fact the convergence takes shape is likely to be something no prognosticator short of Nostradamus could have foreseen.

ANDY GROVE, INTEL CORPORATION
‘Business will drive multimedia’

Always a galvanizing speaker, Intel Corp. president Andy Grove minced no words as the opening speaker of Digital World ‘92.

The so-called “convergence,” Grove said, is driven by nothing more lofty than fear and greed. “With all the hoopla lately … we’re worried that we’re going to miss out on the ‘next big thing,’” he said. “All [these industries] are experiencing slower growth than their appetites desire. All are fighting for markets, looking hungrily, greedily, at each other’s turf. Looked at this way, ‘convergence’ looks very different.”

Instead, Grove believes convergence will happen when someone solves a compelling user need in the business world — where Intel operates as top dog in the PC market, with by far the largest installed base — not in the consumer marketplace.

Grove believes this compelling need is for faster and better information, and “[businesses] will pay through the nose” for it because it will ensure their survival. Business communication tools such as electronic mail, and especially video teleconferencing, best fit the bill.

Intel and other vendors are eyeing the video conferencing business as a huge potential market. Grove said the business community has been spending “a bundle” on such systems — in 1988, only $110 million, but just shy of $500 million in 1991. So of course, from where he sits, video teleconferencing is the best (and in his view, the only) application that will force a convergence upon digital media.

No surprise. This isn’t surprising: Intel manufactures DVI, or digital video interactive — a set of programmable chips that is likely to end up as standard equipment on future generations of computers.

‘INTEL HAS ALREADY SPENT $800 MILLION IN RESEARCH AND DEVELOPMENT ON THE PC PLATFORM’

During his presentation, Grove showed clips of video conferencing software developed at Intel. As with all such systems today, the slower frame rate and low quality of most video conferencing systems aren’t good enough to watch a movie — a definite requirement for the consumer market — but Grove said they are “adequate” for business communications.

Though Grove wouldn’t commit to specifics about Intel’s involvement in delivering such a product, he claimed it “should come as an upgrade or an application like video cards or network adapters in the near future.” He also wouldn’t comment on questions about when DVI and/or graphics acceleration would be built into the design of Intel’s microprocessors, though such additions have been the subject of industry speculation for months.

Standard anti-consumer argument. One would expect Grove to dismiss consumer multimedia as an oxymoron, which he does. He cites all the usual reasons: there isn’t enough content, there’s not a standard player, the quality of digital video isn’t sufficiently high, etc.

Instead, he proposed that while the quality and quantity of consumer multimedia is building momentum, a “real-life convergence” is already taking place on what he called “the most capable and economically feasible platform,” the Intel-based PC, driven by the needs and problems of the business world.

Intel, he says, has already spent $800 million in research and development on the PC platform’s past and upcoming generations of silicon technology. Some 20 million ‘486 processors are manufactured every year. “This is the foundation that’s already in place,” he says. “As it progresses forward, the ‘plain old PC’ will become more powerful and more ubiquitous. It’s hard to imagine a more fertile infrastructure to solve the kind of problems we’re talking about.”

Installed base, or replacement machines? Though Grove asserted his belief that all ‘386-based PCs with VGA graphics “are capable of doing” the kind of desktop videoconferencing applications he showed, he acknowledged that the company’s next level of technology, the P5 processor, will be even more suitable.

When we asked if this kind of application might drive businesses to large-scale replacement of their existing computers, Grove replied, “That’s what I hope.” Thus in some ways, Grove contradicts his own argument that the existing foundation of 100 million PCs is the best reason to consider it “the” convergence platform. What he wants, as does everyone in the commodity hardware business, is for customers to feel compelled to buy new products to get at these new capabilities.

Denise Caruso

RICHARD GREEN, CABLELABS
‘Never have we been so open to suggestion’

Just about the only thing that everyone acknowledges, in varying degrees, is that digital video is the key to “erasing the boundaries.” Andy Grove believes that consumer-acceptable (thus economically viable) digital video compression is still a number of years off, and, as a consequence, that the initial customers will be business users who are willing to pay higher prices for lower quality video (see p. 3).

But Dick Green, president and CEO of CableLabs, believes that consumer-quality digital video compression is, indeed, just around the corner. If he is right, it is likely to be the consumer market that leads the charge, and businesses will use the higher-quality, lower-cost consumer technology.

Green said the CableLabs research consortium –representing some 85 percent of cable subscribers in the U.S. — is deeply involved in the transformation of analog video to digital. It has at least one good reason to do so since, according to Green, the capability to deliver pay-per-view digital movies to the home could tap cable into a large share of the $11 billion video-rental market.

Digital cable by 1994. In fact, Tele-Communications Inc. (TCI), the largest cable provider in the U.S., with Viacom International and the Public Broadcasting Service (PBS), is now hearing proposals for video compression/decompression systems. The first step (by late 1993) will be to use the technology for satellite transmission, decompressing the signal at the “headend” of the cable distribution system. This should provide a four-fold increase in the number of channels that can be transmitted per transponder.

The second step (which Green expects to roll out in early 1994) will be transmission of digitally encoded signals to the home. Green expects that this will permit broadcast of eight channels over a single MHz video channel.

Fattening the pipe. In addition to moving from analog to digital transmission, the major cable companies are committed to replacing their coaxial distribution system with a high-bandwidth fiber network. Besides the bandwidth limitations of coax, the current “tree” system (which relies on a series of amplifiers to maintain signal strength as it travels down miles of coax cable) is highly unreliable. When any amplifier goes out, it takes out everything down stream.

The transition to fiber will replace this with a “fiber to the service area,” or FSA architecture that will provide fiber trunk lines to “service areas” of 250 to 500 homes, with existing coax providing the “last mile” to the home. This will give cable both two-way switching capability and a reliability that begins to approach that of the phone network.

The cost of doing this, Green believes, will be manageable, even for an already leveraged industry. “Fiber is as cheap as coax cable now,” he said, and the existing investment in coax to the service area represents only 19 percent of the total cost of a cable system.

Unlike the telephone company, which will also be an integral part of the national information network, cable providers such as New York-based Viacom are not waiting for information services magically to appear before they install the high-bandwidth fiber-optic cabling that will make tomorrow’s applications such as interactive television and pay-per-view movies a reality. They believe that this is simply a logical (and economically attractive) extension of the entertainment franchise they already have (see “Interactive Television Arrives,” p. 20).

In the process, they will find themselves already set up to provide HDTV transmission, interactive services and two-way communication. This is why cable is now reaching out to other industries — and to the computer industry in particular. CableLabs’ top priority, Green said, is the marriage of computer, cable and public networks. The computer industry has been especially noisy in its call for a national high-speed data network capable of connecting every person, home, business and/or government agency, and has persuaded the cable industry to heed the call as well.

Green is well aware that cable is likely to be the most prevalent alternative high-bandwidth network, and as a result, wants to be sure that every type of digital technology imaginable runs seamlessly over its wires. That’s why CableLabs is so hard at work developing technology for cross-licensing that will be available to anyone who wants to develop products for home use.

To help the process along, CableLabs will provide guidelines for digital delivery of data on cable systems — program guides, multimedia and other services, one way and interactive — including protocol, packet structure, error correction, etc. It is already working on interconnection technology for phone, cellular, satellite and computer networks. And whatever CableLabs comes up with in the way of transmission standards, Green promises it will be widely cross-licensed to ensure its ubiquity.

Ubiquity through cooperation. Indeed, cable is dabbling in just about every digital technology on the map today. And for good reason. In its transition to the digital world, the cable industry certainly does not intend to give up an 85 percent (and growing) market penetration.

If there is a unifying theme to the fast-and-furious pace at which the cable industry is adopting digital technology, ensuring its ubiquity through cooperation would have to be it. As Green says, “There has never been a moment when the cable industry has been so open to suggestion.”

Denise Caruso

RON SOMMER, SONY USA
‘Corporate birth certificates won’t count for much’

If the “digital world” concept stalls now, Sony is in a lot of trouble. Though much of its business still relies on analog media — the Japanese giant is a significant player in the professional market for television, music and video production equipment, as well as the most recognized name in the world for consumer VCRs, televisions and portable music systems — much of its business is moving to the digital realm.

Sony is already a major component supplier of hard disk drives and chips to computer companies such as Apple. It manufactures and sells its own computers and workstations. It is the largest single manufacturer of compact discs in the world and owns the world market for CD-ROM drives, as well as large stakes in rewritable discs, the MiniDisc and portable. It formed its own Electronic Publishing company long before most big players saw a need to do so. An acknowledged risk taker, Sony is constantly throwing new products — innovative devices such as the Sony Palmtop, an early Japanese version of the “personal digital assistant” — into the market to see what “sticks.”

Under the circumstances, then, it’s not surprising that Ron Sommer, president and CEO of Sony Corp. of America, believes that in five years, “not being at Digital World will be half the fun” — his window to the conference will be HDTV, his link will be a live two-way teleconference and he’ll be able to call up video from previous years for simultaneous display.

Of course, somebody’s got to pay for the development of all that nifty stuff, and thus Sony’s mission, according to Sommer, is “building a digital world and in particular, a digital marketplace for products.”

Easier said than done. But as the lines between the consumer electronics, computer and telecommunications industries disappear, suddenly companies are finding themselves to be not in the businesses they thought they were in. Do they then go out and develop their own expertise in the industries they don’t understand? Do they buy companies or technologies that meet their needs?

Certainly Sony has done both, but today Sommer believes forging alliances with players in other industries is the only way to navigate these treacherous waters. “Corporate birth certificates won’t count for much,” he says. Neither will hit products. Nor will being a leader in the United States in any business.

Instead, as traditional boundaries are erased, application areas take their place. Sony believes niches formerly occupied by the computer business, communications providers and traditional consumer electronics gadgeteers are being replaced by personal entertainment, information and communications products, as well as interactive home information and entertainment systems.

Sony’s work in enhanced personal electronics and in home systems will focus on optical-disc technologies, global-positioning systems and high-quality imaging that, due to the expansive nature of the digital world, will equally benefit business, home, broadcast and computer graphics markets.

SINKING ROOTS, ESTABLISHING ALLIANCES

Those who will be truly successful in the new world, he believes, will be those who have “sunk roots and established alliances” across the entire spectrum of those three industries. No one, he says, holds the trump cards. No one will dominate. The days of being good at just one thing are over. The days of cooperation and versatility have arrived. You cannot do it alone.

And neither, it seems, can you expect to do it right the first time. Trial and error and a “culture of innovation,” says Sommer, will be what moves companies along. It’s sustaining this culture, in supporting diversity and taking risks, where Sommer says the challenge lies — especially in an atmosphere where the “hit product” is the Holy Grail. “We need time for these things to mature,” he said. This attitude is itself refreshingly mature, and one that others might meditate upon.

Denise Caruso

JOHN SCULLEY, APPLE COMPUTER
‘We don’t believe it all revolves around a PC-centric view of things’

In many ways, Apple Computer proves the point that both Sony’s Sommer and Intel’s Grove have made about convergence being driven by market hunger (see 3–4). But while Sommer’s and Grove’s appetites lean toward expanding their existing customer bases (albeit in Sommer’s case with new product types), Apple has taken the more daring tack of launching into a whole new market segment.

On the road to find out. Apple chairman John Sculley believes the first most important event of the last year was the “broad acknowledgment, at least by most of us, that there is a new mega-industry emerging,” based on digital technology in consumer electronics, computing and media publishing.

The second most important event was the rapid advancement in telecommunications technology that is allowing exponential leaps in the capacity for information to move across networks. By the early 21st century, Sculley believes that network capacity will have increased 10,000-fold — and the result will be “a very different world.”

Pervasive networking. So important is pervasive telecommunications to Apple’s participation in the new mega-industry, in fact, that Sculley says almost all of Apple’s multimillion-dollar research and development budget is linked into communications. Networking is already a core feature for the enormously successful PowerBook product line, as well for as the upcoming Newton line of personal digital assistants or PDAs. All Newton devices will be equipped with sophisticated communication links between devices as well as to local area, telephone, cable, satellite and mobile networks — and on a global level, too.

A MEGA-INDUSTRY METAPHOR

The reason the mega-industry is forming, says Sculley, is that both the consumer electronics and the computer businesses have become commodities. Neither industry is making much money at what it does, and both can see how their family trees are growing together as a result of smaller, cheaper and vastly more powerful electronic components.

So where once it was a boon to have a fierce and incompatible competitor, much industry talk has shifted to strategic alliances. Sculley believes they are vital to any company that wants to move past the “commodity” trap.

Thus, Apple, long the revolutionary renegade, wants to license its PDA technology and is tightly partnered with former arch-rival IBM, as well as Sony, Motorola, Random House and Pacific Bell. It formed Kaleida, its joint venture with IBM, to standardize multimedia software formats and license QuickTime (Apple’s most successful new technology since the introduction of the Macintosh in 1984) for use on other computer platforms. With Toshiba, it hopes to create a successful home multimedia player, and with Sharp, a more useful Wizard-style device.

In response to our questions, Sculley admitted that he would like Apple to become an information provider, or “publisher,” as well as a supplier of devices and technology: “It’s not likely we’ll necessarily own the content, but there will be a real need to be converters of content in digital form, a real need to distribute the content to whatever services that can come out of publishing and distributing content,” he said. “The place we would start is with people who are good at the things we aren’t.”

Not for the faint of heart. It’s a strategy that’s not for the faint of heart. But as Sculley has said on many occasions, Apple really had no other choice. With its traditional PC market already viciously commoditized, a move into personal and consumer electronics — and the binding together of these devices with computers in a digital world — was the only real alternative to shutting down the factories and getting out of the hardware business altogether.

Sculley sees great potential in the market for interactive devices and consumer electronics. Disagreeing with Grove, he said, “We don’t believe that all of this revolves around a PC-centric view of things. Clearly we think there’s a great role for personal computers in all of this, but there’s clearly something much, much bigger than this occurring.”

Thus Apple will continue parallel product development in both the company’s personal electronics division and its traditional business market. “It doesn’t make sense for Apple to jump from one commodity [business computers] to another [consumer electronics],” says Sculley. “But for us to ignore consumer electronics and just focus on business will really slow down the process to get these personalized, professional systems really in place.”

Denise Caruso

LUCIE FJELDSTAD, IBM
A radical break from Big Blue’s traditional business

Lucie Fjeldstad, vice president and general manager of multimedia for IBM, believes that high-bandwidth digital telecommunications is the basic infrastructure for the future of the digital world. She also believes that IBM can make a substantial contribution to the development and deployment of these digital networks — and can derive revenue not just from providing hardware, but from being an information provider as well.

Of all the keynote speakers, her vision of the future — and her vision of the role IBM should play in that future — represents the most radical break from the company’s “traditional” business and business practices.

Virtually every information and entertainment industry is “going digital” — music, publishing, video production, telecommunications and television. For all of them, the key technology for the future will be the digital distribution link. This will most likely evolve from the current cable and/or telephone systems.

Cable is particularly interesting because of the high-bandwidth infrastructure already in place and the tremendous potential of fiber-optic networks now being installed. Until now, cable has been a broadcast medium. This is probably going to have to change to a certain extent. (The traditional analog-world “channel” metaphor is not very useful when consumers have 150 channels to choose from.)

From broadcast to telecom. IBM would like to go even further and help turn cable from a broadcast business into a telecommunications business. And IBM would like to participate in the telecommunications business.

Cable will continue to carry television programming. But it will also have substantial unused bandwidth that can be used for all manner of additional services, including one-to-many (broadcast), one-to-one, and peer-to-peer applications for business-to-business, business-to-consumer and consumer-to-consumer markets.

Like Grove, Fjeldstad sees widespread communication via digital video as a central part of the coming revolution. “We want to do for full-motion video what facsimile and cellular phones have done to data.” (Which means, we presume, that IBM wants to provide an infrastructure that makes it possible for businesses and individuals to transmit and receive video at will. One telephone company visionary we know envisions home camcorders equipped with phone jacks that allow individuals to transmit their own videos.)

What does IBM bring to the party? Fjeldstad says that her company has developed a system architecture that encompasses the full range of technology required from scalable high-speed servers and gigabit digital switches down to the set-top decoder box. It is applicable to both cable and telephone companies. (Ultimately, she says, the telecommunications infrastructure should resemble the transportation infrastructure: When you have a package to send, you pick the transportation alternative that makes the most sense for that particular package.)

IBM does not want to get tangled up in fights over video compression schemes. It will support whatever emerges as standard. Nor does IBM want to be strictly a hardware provider. Like John Sculley, Fjeldstad has dreams of owning a piece of the information-provider or information-server business and deriving an on-going revenue stream from the data that flows over the network. As Andy Grove pointed out, everyone seems to want a piece of someone else’s pie as part of the reward for cooperation.

But IBM cannot do this on its own. It is actively seeking partners — especially in the cable and telephone industries. It is now field testing its architecture with Rogers Cable in Canada. A joint project with Bell South is next. Beyond this, Fjeldstad confirmed that she is in the midst of active discussions with a number of other companies — including, but not limited to, Time Warner (see Vol. 1, No. 12, p. 3).

Jonathan Seybold

ALLEE WILLIS, SONGWRITER, ARTIST, FILMMAKER
‘We are ready to work with you … we hope you are ready to work with us’

Songwriter, artist and filmmaker Allee Willis started her career writing album liner notes for Columbia Records. But her Detroit roots caught up with her, and with characteristic chutzpah she bought a piano and a tape recorder, wrote and recorded some songs and took the tape to an agent at Columbia, saying, “I just found this girl …” She was the girl, and she got herself a record deal.

Her first album was enough to convince her that she didn’t really want to be in the limelight. Since then, she’s written songs for Bonnie Raitt, Patti LaBelle, Herbie Hancock, and Earth Wind and Fire. She’s worked with Stevie Wonder, Bob Dylan, Bette Midler, the Pet Shop Boys and the Pointer Sisters. She’s sold 40 million records, more than a few of them gold.

But it’s boring. A restless creative spirit led Willis into many arenas other than music. Her vast collection of ’50s and ’60s paraphernalia led to designing television sets for MTV. She paints and builds motorized art pieces. She’s also gotten vast amounts of attention for throwing wild parties at her North Hollywood home (only fitting, since it was originally designed as a party house for MGM), and has made a handful of short, quirky films.

Willis’s goal has always been “to try to combine as many of these mediums as possible,” and when a friend introduced her to CD-ROM-based interactive multimedia, she was sold. “There is no other place that I’m interested in working,” she says. “It’s amazing the types of things you can do, how deep you can get into everything.”

However, Willis is incredulous that, as she says, “the stuff is really boring.” When she shows the existing titles to her friends, they’re “asleep in three minutes.”

A GOOD OMEN

The arrival of artists such as Willis at Digital World is what many people feel has been missing until now, and is a good omen for the future. Willis’s well-taken point is that anyone who has grown up watching TV and listening to the radio, two very compelling media, does not (and will not) find most of today’s interactive product offerings appealing.

“That’s what interactivity is competing with — it needs to have the emotion, the warmth, the ‘hipness’ and sophistication [of TV and radio],” she says. “And that will come from artists now working in other, more linear mediums, who know how to reach out to the public, to grab the public.”

Willis says working with interactive software designers will “take my brain places where it’s never gone before,” and that’s why she and other artists who attended Digital World (i.e., actress/producer Shelley Duvall, actress Lily Tomlin and author Jane Wagner — see p. 26) are convinced that multimedia in the right hands will create an entire new art form.

“I am really interested in process, in things changing,” Willis says. “That’s why I’m interested in multimedia, and why it’s so important to integrate artists into work with the technicians, particularly at this junction.”

As you might expect, Willis disagreed strongly with Grove’s picture of the business market being the only viable one for digital media in the short term. After her talk, Grove said, the mass media market would take off only “after solving the incredibly boring problems of connections and how to place orders in the field. That has to happen before we can deliver gadgets that you and your friends can play with.”

But Willis believes it’s the quality, not the state of the technology, that’s keeping interactive titles out of the mass market. “I don’t know what these people are aiming for — the three people who own the machinery?” she said. “When artists realize this world is opening up to them, not only can we blow this whole thing wide open, but each individual technology will completely change. It will change movies forever, TV forever, music forever. To take it to the next step, entertainment is something that people should really be looking at. We are ready to work with you, and we hope that you are ready to work with us.”

Denise Caruso

NATHAN MYHRVOLD, MICROSOFT CORP.
‘We are destined to go through chaos’

Using events in the history of communication as his guide, Nathan Myhrvold, Microsoft’s vice president of advanced technology and business development, mapped out a path that he believes will lead us into the digital world as he began the closing session of Digital World ‘92.

Printing presses, photocopy machines and desktop publishing technology revolutionized the dissemination of information. The next landmark technology, according to Myhrvold, will be digital media. It will, he says, incite an information revolution greater, perhaps, than all save Johannes Gutenberg’s printing press.

WITH DIGITAL, AUTHORS ARE EVERYWHERE

“[With the advent of this digital world], we are saying let’s use digital technology and electronic distribution, either directly on line, via servers or stored media, to fundamentally change the way video and audio and text — all forms of information — are stored,” Myhrvold, says. “Part of the message here is that authors are everywhere.”

So far, so good. Other than the potential for lots of really horrible multimedia everywhere you look, people like the idea that this technology empowers individuals to become creators of content that is no longer destined for their eyes only. Myhrvold’s vision promises a future where people can access and distribute more media than is currently available through the television networks, cables companies, and media publishers.

Discussed at this high level, we all get the warm-and-fuzzies about “converging technologies.” Individuals from the telephone and cable companies, the entertainment, computer and consumer electronics industries can actually see a future where “we cooperate to compete.” It’s when we try to figure out how to get
to that digital utopia from here that causes indigestion and territorial marking en masse.

The pecking order. “It is clear that we can’t all be right,” he said, noting that for two and a half days, speakers from each of the “converging” industries provided Digital World attendees with their version of the future, which inevitably put their particular company, or industry, in the driver seat.

“Any actionable, concrete suggestions that came out of the presentations were almost always contradictory to the concrete suggestions made by someone else,” says Myhrvold. “Now in a way that is something we should expect, because these are industries feeling their way. But I think there is also going to be a substantial realignment.” And not everyone will be happy with their position in the pecking order.

Probably a lot of smoke, actually. “We will see personal computers, information providers, consumer electronics and telecommunications coming together,” he says. “But this is not necessarily the happy picture some would paint. This is also the clash of the industries, because in the natural process of deciding which of these fundamental assumptions is right and wrong, which need to be adjusted and which don’t, we are going to see a lot of heat, light and smoke generated.”

BIRTH PAINS COME IN WAVES

All this angst, philosophizing and posturing, he says, is really no different than the stages that companies had to move through during the beginnings of the personal computer industry, and, for that matter, the birth of publishing. Like any birthing process, the pains come in waves.

“The first wave [of the digital world] is already with us,” says Myhrvold. “Digital technology such as CD audio has transformed parts of the entertainment and consumer electronics businesses. We are now entering the second wave, making dedicated systems such as PDAs and dedicated multimedia players and proud of it.”

But, he warns, we should look to the past and remember the ballyhoo that surrounded the arrival of dedicated word processors in the early days of the computer revolution. We must ask ourselves, he says, where those 50 different dedicated systems are now, and be prepared for a future that is nothing like we have imagined it.

Janice Maloney

MIKE LIEBHOLD, APPLE ADVANCED TECHNOLOGY GROUP
‘Apple’s role in this mess is the agnostic’

Even for the technologically sophisticated crowd at Digital World, Mike Liebhold, Apple’s manager of media architecture, is what’s called “out there.” “I am going to talk about a future that doesn’t work yet,” says Liebhold, who has been working on aspects of the National Information Structure with “cable TV, research types and the telcos.”

Not surprisingly — based on his current endeavors — he stressed the need for cooperation among the warring factions in the digital world, saying each has a piece of the puzzle but can never create the full picture on his own. “Let’s get real here,” he said. “We must form alliances among ourselves to push this thing.”

TOTALLY WIRED

This thing, of course, is the “wired” home.

According to Liebhold’s vision of the future, consumer devices supporting a wide variety of transmission vehicles — from ISDN to cellular data networks to high-bandwidth digital TV — will crop up in four separate areas of the home.

He emphasized that we must not get “stuck into thinking everything is going to happen in the living room with a remote control.” The areas to watch include the home office, the kids’ room, the living room (now the “home entertainment center”), and — a new area for interactive media — “that little room off the kitchen where we keep the Yellow Pages and bills.” In there, says Liebhold, will be some sort of “third or fourth full-motion videotext information device.”

These four different areas assume different needs, and will require interoperability. In Liebhold’s future, all manner of information will be delivered over a single, compound media delivery system. “Make TV a meta-format that can accept a wide variety of things,” he says, echoing Apple chairman Sculley’s keynote comments about giving television a second chance.

ENTER COOPERATION

This advanced, somewhat utopian scenario requires cooperation. Neither the telephone nor the cable companies — not even the computer companies — have enough of the pieces to form a whole pie. What is needed is a “hybrid network,” a partnership between the cable and phone companies. “Think about the cable network and the telephone network as an integral communications fabric,” says Liebhold, a fabric that is critical for delivering interactive, multimedia applications.

After all, the telephone networks do not have the bandwidth to do full-motion video, nor are the prospects high for seeing it anytime soon. They also operate on a regulated rate structure that is completely inappropriate for the range of services from simple voice, or POTS (plain old telephone service), to multiple channels of video and audio.

Catch-22 rate structure. For example, if the tariff on telephone services continues to be based on voice communications, as it is today, it will be prohibitively expensive to send video over a phone line. If the fees were based on video services, the phone companies would be giving away voice services — its core business today — for free.

The cable networks, for their part, are primarily one-way services, without switching capabilities. The cable operators are also highly leveraged, which means that apart from well-publicized experiments, there will probably be little widespread deployment of interactive services.

And, neither operation knows how to operate interactive service. “People in this room can do it,” he emphasized. “Use the best of both media and keep in mind interoperability.”

A FUTURE THAT DOESN’T WORK YET

In addition to espousing a future that doesn’t work yet, Liebhold advocates patience with the standards process, which some believe will further delay interactive services. But at a time when we are seeing the “compression algorithm du jour,” Liebhold urges industries not to “standardize on what we haven’t developed yet.”

He foresees high-powered digital signal processors, or DSPs, in the television set that could be programmed to include each new improvement as it is developed. This thinking is in line with the work being done by the Society of Motion Pictures and Television Engineers (SMPTE), which has already developed standards to identify and display different digital video signals, including decompression instructions (see Vol. 1, No. 10, p. 14).

So where does Apple fit in? “Apple’s role in this mess is the agnostic,” says Liebhold. It is playing both sides of the fence in order to provide and provoke new services, at least initially for the Macintosh and the company’s Newton line of digital assistants. Again Liebhold sounded a John Sculley theme, and one that the Japanese have been exploiting successfully for some years now: “Let’s cooperate to compete.”

Janice Maloney, David Baron

JOHN EVANS, NEWS CORP.
‘I am regarded as being on the lunatic fringe’

John Evans, the executive vice president of development for Rupert Murdoch’s News Corporation Ltd., listened to the two presentations preceding his and decided to throw away whatever shreds of a prepared presentation he might have had (which, by the way, was going to extol the virtues of PDAs). He did, however, have the decency to warn attendees before his rant — the rant that closed Digital World ‘92 — that he is “regarded as being on the lunatic fringe of my company.” Fair warning.

Lunatic or no, fact is that John Evans has made a number of singularly important contributions to the world of publishing. A lot of money was spent on products that he believed would be successful, and they usually were. One only need to look at the Village Voice and New York Magazine to see that Evans knows his stuff. So at Digital World, listening to people who he considers novices in publishing, talking about the next big thing in information delivery, struck him as “obscene.”

He held up Nathan Myhrvold’s “edited” version of the Wall Street Journal. Myhrvold had taken the first page of the paper, sliced out everything that was of no interest to him, and explained how that represented a personalized newspaper.

Evans took him to town. “This is a typical hacker’s approach to media,” he howled. “Let’s strip out all the revenue, let’s have that elitist egalitarian point of view, and then nobody makes any money on it so nobody can afford to print it, but nobody reads it so who cares!”

This is the problem with the state of interactive media and information services, he says. There is great concern about convergence and a meeting of the minds (the last two Digital World themes), but no compelling content. And even the type of content that has proven to sell boxes to the consumer, those addressing more “prurient interests,” are approached by technologists in a way that would never make a business in the publishing world, and is obviously not generating huge bucks for the technology companies, either.

For example, Evans created personal ads in the Village Voice, and developed an immense revenue stream based on it. Compuserve offered the same service, except that it considers itself an “information business” (whatever that is) — so it decided to give away the same service for free!

When magazines and newspapers are successful, it is because the revenue stream of advertisements, personal notices and classified ads are able to subsidize the content — news, art, features, etc. If you are indeed going to separate out each individual feature (as Myhrvold did with his Wall Street Journal), you need to put a price on it. “Pay-per-look,” Evans calls it.

What Evans objects to most about Myhrvold’s vision of publishing is that the process has completely overlooked the importance of editors and the editing process, which is what makes information enjoyable and even palatable today. Myrhvold may want to tear up the Journal, but it isn’t his, so he can’t.

Companies such as Evans’, he’s only too happy to remind us, not only edit the information, they collect the revenues, and they own the content. “So we’re not ‘converging’ with you guys,” he said. “We’re watching you come at us with your greedy little mouths going, ‘Oh, we would like to have a synergistic relationship with you.’ and we say ‘Piss off! Because we don’t need you right now.’”

If TV Guide is going to become electronic and interactive (and News Corp. owns TV Guide, the second most-recognized logo in America), it will only be when the reader, who may or may not want to perform “mega-manipulations”of the data, can get the “warm-and-fuzzy feeling [of] … good old, familiar TV Guide.” And not a moment before.

Practicing what he preaches. Evans may sound like a technophobe, but to make that assumption about him would be a grave mistake indeed. News Corp. is, in fact, sitting on some of the most potentially transforming technology that exists today. It owns a Menlo Park, CA-based company called Etak, an electronic navigation and mapping company. Etak makes auto navigation systems, but it also owns the world’s largest library of electronic, geocoded maps.

News Corp. is keeping fairly quiet about its long-term plans for geocoding, but Evans has spoken publicly about a future where your information and entertainment, as well as your phone calls, will be able to “follow you around.” At present, says Evans, News Corp. is licensing the technology to interested parties whose applications don’t cross boundaries into News Corp.’s territory. But when the time is right for Evans to move it into the mainstream, rest assured he will be ready.

David Baron, Janice Maloney

>SESSIONS

THE PHONE COMPANIES’ IDENTITY CRISIS
To change with the times, they must learn to fight

When U.S. District Court Judge Harold Greene signed the consent decree breaking up the Bell Telephone System, it was with the express intention of improving phone service by fostering competition. He forbade the Regional Bell Operating Companies (RBOCs) from becoming computer service providers so that they would be evenhanded in their role as common carriers for the information services.

A RASH OF RESTRICTIONS

Ever since, the Bells have chafed under his restrictions. They have suggested that they would install high-bandwidth fibers to homes and offices much sooner if they had some financial incentives, such as the right to sell digital information services on those fibers, or even to invest in information providers’ stock. This strikes some observers as a disingenuous bid for monopoly power (see Cathleen Black’s comments in Vol. 1, No. 7, p. 9), while others see it as simply leveling the playing fields between the telcos and the unregulated cable companies that face no restrictions on providing the content that they distribute.

The U.S. Federal Communications Commission — as well as the higher courts — have sided with the telcos, and it now appears certain that they will be permitted to provide information services. Even so, Digital World speakers and panelists at the session “The Telephone Company: Public Network or Information Provider” were far from certain that this will spur the kind of investment required to accelerate significantly the conversion of home and business phone services to high-bandwidth fiber.

No longer a single network. Robert Pepper, chief of the Office of Plans and Policy at the FCC, put the discussion in perspective by stressing the fact that the United States no longer has a single telecommunications network. It has, rather, an interconnected web of nets that includes the local phone exchanges, the interexchange carriers such as Sprint and AT&T, cellular and satellite radio companies, the alternative or “bypass” carriers and the cable companies. Each of these services forms part of a larger whole, and each can be evaluated in terms of ubiquity, bandwidth and cost.

True ubiquity. The various phone companies are truly ubiquitous. Not only do they serve every business and home, but they are highly reliable; outages are rare and usually involve some physical catastrophe to the lines. But when it comes to bandwidth, the current phone system falls short. The copper pairs from the pole and running throughout the home are generally limited to 1.5 megabits per second.

That’s a bit more than the data rate coming off a CD-ROM, so it could be used to deliver one channel of highly compressed video. But there are wide variations in capability among the local exchanges; some could begin offering wide-band digital service tomorrow, but most would need expensive upgrades to the switches.

WILL CABLE SUPPLANT TELEPHONE?

The cable companies are the most obvious direct competitor. They can deliver the bandwidth. And being in 90 percent of U.S. homes, they are partially ubiquitous, if there is such a thing. But businesses are a different story; as yet, cable companies have no reason to string wires in business districts.

Reliability is also another story; because coaxial cable needs an amplifier every mile or so to maintain signal strength, each amplifier in the distribution network is a failure waiting to happen. Not to mention that most of the installed amplifiers have another limitation: they are one-way devices. That’s fine for distribution of TV shows, but it is a serious barrier to the person-to-person, custom connection served so well by the phone company.

Even so, cable is positioned to do to the phone companies what it did to broadcast television. Cable operators can make incremental investments in infrastructure as a business decision, independent of regulatory oversight. Cable operators are risk takers, while telco managers have been risk-adverse care takers. But, be careful: unlike the telcos, cable is not required by law to provide network access, and cable operators can be (and often are) information providers as well as carriers.

Pepper is concerned with pushing the telcos to move more rapidly on deployment of fiber to the home. Permitting them to be information providers may help move things along, but it is not a panacea. Remember that only the ex-Bell operating companies were ever prevented from being information providers, and all telcos are already permitted to carry (as opposed to originate) every kind of information. On a purely economic basis, allowing the phone companies to replace perfectly good copper wire with fiber (and pass the expense on to their customers) would help even more. Only the state regulatory commissions can do this.

What happens in the end will depend both upon what government bodies (especially Congress and the various state regulatory agencies) do, and what the phone companies stir themselves to do. We may, in the end, continue to evolve a diverse (and increasingly competitive) web of interconnected telecommunications services and providers.

STRUGGLING WITH A COMPETITIVE ENVIRONMENT

Pepper’s view of the challenges facing the phone companies was reinforced by Ken Thomson, a 20-year Bell veteran (both pre- and post-breakup). He described the struggle that phone companies are going through as they try to fit into this new, competitive environment.

In the past, Ma Bell provided voice service to horizontal markets in which they held monopoly franchises. The advent of new data and video services has fragmented the market into many specialized vertical slices. In many of these markets, the Baby Bells face serious competition, yet they themselves are constrained by federal regulation — by Congress, the FCC and Judge Greene — and 50 state public utility commissions.

Repricing as business strategy. Consider these facts: A typical RBOC’s revenue stream includes 40 percent from local services, 20 percent from connections to long-distance carriers and 20 percent from “enhanced,” phone-related services. It can expect to see its main product, network usage, grow by 1 to 3 percent per year, yet as a publicly held corporation it needs annual profit growth of 6 to 8 percent.

The first conclusion you might draw, then, is that repricing is going to be an RBOC’s primary business strategy. Even the smallest RBOC has at least 10 million customers; additional revenue of even 50 cents per month from every home would be most interesting. By contrast, no conceivable information service is likely to generate — in the short-to-medium term at least — the kind of revenue that will have real impact on an RBOC’s bottom line. This is especially true if you remember that the RBOCs are, after all, regional companies. None has access to a nationwide market. Yet, if the phone companies are going to get the revenue growth they need, they will have to move beyond their current services.

Thomson believes that the demand for high-band-width services is there. The biggest problem, he believes, is conservative phone company management.

Panelists Stephen Case, president of the Vienna, VA-based America Online information service, Harry Morris, a scientist for Cambridge, MA-based Thinking Machines’ Wide Area Information Server (WAIS) Project, and David Knight, associate vice president of marketing and sales of Isocor, a start-up data communications software developer and manufacturer in Brentwood, CA, then joined the fray. Their consensus was that, for perhaps the next five years, the phone companies will offer high reliability and a flexible point-to-point switching network, while the cable companies will deliver very high bandwidth, albeit just one way and with considerably lower reliability. However, if you look forward 10 years, the phone companies will have added high-bandwidth service, while the cable companies will develop switching networks of their own.

In the more immediate future, the panel also noted that a lack of common interface standards among the regional phone companies had been the last obstacle to universal ISDN service. Recently, though, the regional phone companies settled their differences and finalized a standard. As a result, we can expect to see ISDN available in every city east of the Mississippi within a year and a half, at a cost roughly 50 percent greater than the current basic flat rate for analog voice lines. This will not provide cable-grade video to the home, but it should open up the market for a wide range of high data-rate applications.

Peter Dyson, Jonathan Seybold

NEW CONSUMER DEVICES ARE COMING
Job One: Figure out why anyone would want one

Revolution, empowerment and compelling economics were a few of the verbal sticks that panelists were rubbing together to make sparks fly at “The New Consumer Devices: A New Class of Product” panel at Digital World.

Virtually none of these new magical devices has yet seen the light of day, but panel members believe that they will fundamentally change the way people conduct business or their personal lives.

Some would argue that the panel was slightly misnamed. John Sculley has already admitted he wished Apple hadn’t decided to first announce and demonstrate its new Newton technology at the Consumer Electronics Show, because it set up an expectation that Apple was indeed trying to reach Joe Sixpack with its relatively expensive (probably around $700) personal digital assistant, or PDA.

It’s important to keep in mind that what’s being called a “consumer device” today embraces PDAs as well as home multimedia players and handheld, “very personal computers.” They all embody a compact, powerful vision of classical convergence: the raw horsepower of today’s personal computers and software, combined with the accessibility, small size and specific (as opposed to general) functionality of consumer electronics devices. And they’ll be sold through consumer channels as opposed to specialty stores, thus the slightly skewed nomenclature.

Depending on the application, the new consumer devices will rely heavily on built-in communications capability, whether built-in ports to the existing phone or cable TV system, cellular data modems or wireless infrared connections to computer networks.

KALEIDA’S NEW LEADER SPEAKS OF EMPOWERMENT

The most starry-eyed of all the panelists, understandably, was Nat Goldhaber, whose appearance on the Digital World stage was his first as president and CEO of the Kaleida joint venture between Apple and IBM. Goldhaber enthusiastically endorsed the concept of the new consumer devices, saying that they would provide the opportunity to empower individuals by “extending their minds and bodies” and giving them the opportunity to observe information, interact, query, entertain and educate and significant ways.

The mission for Kaleida right now, he says, is to develop and license a scripting language and players for consumer-level operating systems that will work on multiple platforms and allow developers to spend more money on production values for multimedia. “That will begin to entice people sufficiently in the marketplace to start people using multimedia devices in their daily lives,” he says.

The idea, he says, is to bring the microcomputer into the consumer world. And those who have seen demonstrations of Apple’s newest technology, the Newton architecture for PDAs, can see how such devices will at the very least make the untethered office not only viable, but pleasurable — and despite a comparatively hefty price tag, likely to be within the budgets of many knowledgable workers who spend a fair amount of time out of the office.

However, the question of viability looms large when one considers moving these devices out of the hands of the computer-familiar and into the hands of the real, true consumer population. Enter the much debated “consumer multimedia player” concept.

TOSHIBA ASKS, ‘WHO NEEDS IT?’

Joining Goldhaber on stage was the refreshingly candid Koje Hase of Toshiba. During Digital World, Toshiba announced its plans to jointly develop a multimedia consumer player with Apple Computer, and also that it would license core software technology from Kaleida.

Hase’s analysis of the multimedia “industry” may be a little painful, but sometimes it’s necessary to have the bandage ripped off unceremoniously for the wound to heal. In essence Hase asks, Who needs it?

That pesky couch potato. “What can you do about couch potatoes? We are very tired, overworking, exhausted. You would rather have a beer in your hand and watch TV,” he said. “I don’t need multimedia. The next real issue is interactivity. This couch potato does not want any interactivity. So who wants interactivity now? That’s the next question.”

He then pointed out that consumers, “with due respect,” aren’t really rocket scientists when it comes to consumer devices. He said that fully one-third of the support calls that Toshiba receives are resolved by having the customer plug the device into an electrical socket. Those who believe that multimedia is messiah to a population of gadget-phobic couch potatoes had better wake up and smell the coffee.

Consumers consume. Hase raises another vital point, various facets of which were discussed in other panels (most notably “Multimedia Computing,” p. 23). There is a school of thought that says there are storytellers and there are game players and never the twain shall meet. This philosophy flies directly in the face of interactive multimedia, which presupposes that there is something inherently better about interacting with the story than simply listening, watching or reading it.

Hase’s not so sure about this. “I want to sit down and really absorb myself into the dreamy world of some producer, not interact with what those producers brilliantly executed,” he says. “Happy endings, heros, heroines — we don’t want to destroy the world of illusion. Do we want, when we watch Lethal Weapon, to interact with them? I don’t think so. If we interact, Batman may not return.”

In other words, consumers consume. They don’t want to have active participation in the program. They don’t want PC-style interaction. They aren’t waiting to be rescued from their reviled (by us) couch potato status.

HOWEVER: NO ANSWERS,NO SALES, NO MARKET.

So if this is true, then what is Toshiba doing developing multimedia devices and PDAs? Hase admits that he’s not sure, that it’s the consumer’s mind that we need to read. He seems to believe that PDAs can bring about a new lifestyle, a new environment, in the same way that video tape recorders introduced the concept of “time shift” into the culture. “It’s a time machine,” he says of the VCR. “It was a new lifestyle for consumers, therefore they bought it.”

Another lifestyle shift brought about by Japanese consumer electronics was the automobile-as-lounge, with the introduction of high-quality audio into the mobile environment. Sony’s Walkman had a similar effect.

So the question we should be asking ourselves, Hase says, is whether a new device also offers a new lifestyle for the consumer. If so, he believes there’s a possibility for success. If not, and if the devices are just a new set of technical jargon and useless features, the PDA market will not succeed.

The interactive potato. At this point, says Hase, it looks as though the delivery of information is going to play an important role in this lifestyle switch to PDAs. This point of view is gaining popularity in a number of quarters; (see the story about keynoter John Evans of News Corp., p. 12 for a most opinionated view).

In the age of broadcast TV, people didn’t have much choice, Hase says. But now people want very specific types of information quickly, and to have it delivered directly to them — what he calls “narrow-catch.” In this way, mobile technology may allow consumers to get their hands on information or media that they would have had to search out before they bought their PDAs.
In other words, he says, the industry must try to create a platform for a new lifestyle Hase has dubbed the “interactive potato.” After more than half a decade of talking about multimedia, it is still a zero billion dollar industry. “We must make some sales eventually,” he says. “We must have some answers.”

THE EVOLUTION OF THE PC REVOLUTION

Avram Miller, vice president of corporate business development at Intel Corp. in Santa Clara, CA, agrees that information delivery will be the bread-and-butter for handheld computing devices. “It’s a continuum of what started 10 years ago,” when personal computer applications moved from vertical to horizontal applications. He calls it “the evolution of a revolution.”

And the evolution as he sees it is from desktop to mobile computers. But regardless of whether it’s a wrist-computer or PC-in-a-pocket, the power for the business user is to make these devices part of the continuum of computing — not just putting a personal information manager in their briefcases, but the kind of tool that can really solve problems.

To do so, he believes it’s important to address the minimum of technical issues, not the maximum. Since the problems are communication, information retrieval and vertical applications, the minimum things to address in a handheld device are interoperability, compatibility (though user interfaces don’t have to be the same), ease of use, connectivity, mobility, simplicity and reliability.

Although companies like Apple clearly have the same lists on their boardroom whiteboards, Miller reminds us that these are difficult problems that require a lot of attention, and they require absolute commitment from both silicon chip firms and from consumer electronics companies.

Sounding a familiar theme, Miller said, “No one will be successful unless we really pull together.” Despite his president’s call that alliances are formed out of sheer greed, Miller states bluntly that “we are at Intel willing to work with anyone in any industry toward these objectives.”

WHY DOES PROGRESS HAVE TO BE SO SLOW?

Though everyone is intrigued with what Trip Hawkins is up to with his extremely well-funded and equally secretive SMSG group in San Mateo, CA, the traditional speech he gives about the need for highly interactive (as in suitable for games) 3D graphics in addition to full motion video for consumer devices is still — sadly for him, and for us — as fresh as when he started talking about it a couple of years ago. There hasn’t been much consensus, or much progress, toward solving the serious problems in the process of designing a truly useful consumer multimedia device.

The industry’s inability or unwillingness to solve critical problems of cross-platform development, scalability, compatibility and sufficient performance for high-quality 3D and animation keeps it from doing the one thing it wants to do: create a breakthrough product.

But as Hawkins says, it’s time we started looking at “the market” differently. He says there isn’t one market, but three for consumer devices — the home office, the portable appliance, and the big-screen experience. It seems most likely that at least in the short term, the shortest road to success in the new market for consumer devices is to make them as application-specific and inexpensive as possible.

The application-specific part isn’t a problem. There are many people today who have actually spent the $300-plus on a Sharp Wizard-type device, and might even fork out just about the same amount for one of Apple’s far more elegant and powerful Newtons. But consumer product? Who are we trying to kid? The only way these products will reach the consumer — the actual consumer, not the kinds of people who subscribe to newsletters like Digital Media — is if they win it in a radio contest. Or, perish the thought, if the people who make them decide to sell them at a price point that the consumer recognizes as actually consumable.

Denise Caruso

THE GREAT TELEVISION DEBATE
Should we base a new generation of consumer products on an old platform

TV or not TV? That was the question debated by computer executives and media industry watchers, with help from a very vocal and often passionate audience, as they tried to separate technology from content during an informal evening session at Digital World called, “The Great Television Debate.”

When the 90-minute session came to an end, it seemed that everyone was in agreement on only two points: one, that TV, as a media delivery platform, won’t disappear anytime soon; and two, that when it comes to content, broadcast television is for the most part a wasteland (Northern Exposure, The MacNeil-Lehrer News Hour and The Simpsons were among the exceptions noted by audience members).

The existing infrastructure. The TV issue is lent urgency by the entertainment and cable industries (as evidenced by the industry representatives who appeared on this and other Digital World panels), already looking for ways to use existing TV and cable broadcasting infrastructure to deliver new forms of digital media, such as videotext and interactive or “smart” television. It is also very relevant to people who hope that interactive technology will somehow “fix” television and to people striving to create new art forms who earnestly want to avoid the mistakes of the past.

Calling the question. Thus, the intention of the panel was to call the questions: Is television still a useful medium for a one-way, noninteractive form of visual communication to a mass audience? Can you separate the medium from its content? Will the merger of interactive computer and TV technology usher in a new, more useful medium?

Debaters included Bob Stein, cofounder of the Santa Monica, CA-based Voyager Company; Sueann Ambron, cofounder of Apple Computer’s Multimedia Lab and now vice president of advanced media for Simon & Schuster’s Technology Group in Sunnyvale, CA; John Perry Barlow, cofounder of the Washington, DC-based Electronic Frontier Foundation; Kathleen Tyner, executive director of Strategies for Media Literacy, a San Francisco-based, nonprofit organization that promotes media education beginning in elementary school; and Diana Gagnon Hawkins, a veteran of the interactive TV industry and founder of Interactive Associates, a Portola Valley, CA-based consulting group for interactive TV and virtual reality.

DOES TV REALLY DESERVE A SECOND CHANCE?

The starting point for the debate was Jerry Mander’s book, Four Arguments for the Elimination of Television, which all five panelists (and many audience members) had read. Mander’s central theme, which he supports via the four arguments of the book’s title, is that technology is not neutral, therefore you cannot separate the medium of television from its message.

Saying it’s “optimistic to believe that TV could be eliminated,” Barlow launched into a criticism of both the medium and its content, saying that everything from news broadcasts to situation comedies distorts and misrepresents reality. “TV is an incredible denial machine that allows us to edit the shadow out of reality,” he said, citing the lack of Persian Gulf War coverage on Iraqi casualties as one example. He argued that TV does not provide information, but rather “simulates experience and strips [experience] from any context. It just comes at you and you take it.”

No going forward. Stein of Voyager, a publisher of interactive entertainment and digital information products, is skeptical about whether TV deserves a second chance. “Technologies have inherent ways in which they are used best,” he said. “Telephones promote two-way communication. Broadcast TV is a one-way medium good for manipulating people on the other end of the screen. TV is bad at context. I think the question should be ‘Is this a technology we want to develop?’, and not ‘It’s here and let’s try to go forward with it’.”

Media Literacy’s Tyner, whose concern is with content, said that viewers should be more critical of the things they watch and be aware of hidden messages. She showed a powerful, frightening video of a commercial for Mars candy bars, first showing the commercial without annotation, then again with voice-over reading the advertising agency’s original instructions on what the images are supposed to convey and how they are intended to manipulate the viewers’ emotions.

Somewhat contradictory to the video’s message, Tyner said that “TV is not a passive process … viewers are not just passive recipients of information. The audience negotiates meaning.” However, it is clear that the vast majority of today’s TV viewers do not have the faintest idea how to negotiate the meaning behind the complex, psychologically laden imagery of today’s commercial and political advertisements.

Advertising must change. Tyner added that “it takes some cognitive process and everyone builds their own narrative. I don’t think people want to turn it off. They want to understand it better,” but based on audience reaction to her video, it seemed clear that viewers, at the very least, need access to tools that help them understand it better.

In fact, Tyner’s presentation of an advertisement brought into focus yet another vital issue for the new generation of media: how it will pay for itself. Advertising dollars are plummeting as the “store-and-forward,” remote-control generation either hits the mute button when a commercial comes on, or fast-forwards through it. Will the process of making TV a custom, interactive experience also bring us ever more intrusive advertising, since those on the other side of the TV screen will be much more able to target our likes and dislikes?

DON’T BLAME THE MESSENGER

Both Ambron and Hawkins argued that TV-as-technology is only as good as its content. Mastering TV, they agreed with Tyner, implies mastering the visual language of television.

Hawkins said she sees promise for interactive television because it will engage viewers. “Kids are passively absorbing information now when they watch TV. In school, they sit and passively absorb information. By making [TV] interactive, you change how they learn. Interactive TV, like video games, can teach cognitive skills. So don’t blame the tool, look at the content.”

Ambron also discussed the positive educational uses for both TV as it exists today and for the smart TV of the future. Her examples included educational broadcasts to remote sites (i.e., remote classrooms); and interactive educational presentations that will put control of the content into the viewers’ hands, as well as offer viewers a chance to access different points of view on the same subject. Paraphrasing pioneer TV journalist Edward R. Murrow, Ambron said, “TV can teach, illuminate, and maybe, with smart TV, even inspire.” But she warned that without care for the message and the content, “it is lights and wires in a box.”

What was most fascinating about this debate was the sometimes blind passion unleashed when conference participants got their chance to weigh in. Many TV supporters seemed particularly unwilling to discuss the medium’s problems and how they might be addressed, and were incensed that anyone would deign to open the subject to debate.

The fact that such questions were even being discussed seemed, to one or two in the audience, to provide evidence that Godless Commies are still wreaking havoc with The American Way of Life. As with politics and religion, it seems that television is one of “those” topics that must be approached with more than customary diplomacy.

But while one camp decried the entire concept of the panel as “absurd” and the other considered it a vital challenge to the status quo, the truth is that these questions must be discussed if we are to move forward responsibly. In an era where the new mass media is destined to be “not a book, not a movie” — in other words, something completely different from what’s come before — can we really look to television to be its delivery vehicle? How will it pay for itself? Can the TV paradigm as we know it today hold its own in a new era, or will it blow apart as digital, interactive programming starts coming down the pipeline? The debate must continue.

Connie Guglielmo, Denise Caruso

INTERACTIVE TV ARRIVES
Ready or not, cable companies move ahead

Of all the new technologies, digital interactive television is probably the easiest for the consumer to grasp and has the most immediate potential for acceptance. It is also the most difficult to achieve, given that today’s broadcast and cable systems are set up for one-way, highly non-interactive, “spoon-feed and swallow” program consumption, and that the digital video-compression technologies that serve as its foundation are still emerging.

But the “Interactive Television” panelists at Digital World are convinced the old TV model will lose its grip as interactive TV systems move out of the “test bed” stage and are designed and implemented nationwide.

Best known to date is the Time Warner, 150-channel system that’s being set up in Queens, NY. At Digital World, Viacom International president Ed Horowitz outlined Viacom’s plan for a one-gigahertz, fiber-optic-based, two-way cable network that’s being installed in Castro Valley, CA, a bedroom community near San Francisco. And phone company GTE’s “home of the future” project is continuing to investigate and make new I-TV services available to its fiber-wired customers in Cerritos, CA.

A variety of different applications fit under the “interactive TV” umbrella. Today, a rudimentary form of interactive TV — the use of a telephone in conjunction with programming — is already quite lucrative (see Vol. 1, No. 12, p. 6). But the vision that these panelists have of I-TV is far more sophisticated, at least technically, than dialing a 900-number to have a fake diamond ring or a “golden oldies” compact disc delivered to the consumer’s door.

OFFERING A PACKAGE OF INTERACTIVE SERVICES

Diana Gagnon Hawkins of Interactive Associates, a longtime interactive television expert, says the critical component to I-TV’s success is to provide viewers with the most variety possible.

That’s because they aren’t about to pay extra for a new set-top box — “a very big expenditure” for the cable provider, said Hawkins — that just gives them one new service. A new, digitally capable box has to provide a platform for a number of different applications and revenue streams.

Today, the big winner would be pay-per-view movies, also known as “video on demand.” The I-TV metaphor also allows for an entire new range of services supporting pay-per-view.

This new “home cinema” will absolutely require “smart-search” features — vital when hundreds of movies are being delivered across a mind-boggling 150 channels. Smart-search features can help viewers find movies by subject, favorite actor or director, or just about any other criteria, as well as provide canned reviews by Siskel and Ebert or their functional equivalents.

COUCH POTATOING RAISED TO FINE ART

Such services would raise “couch potatoing” to a fine art. Anyone familiar with computers can easily imagine asking a database for all the movies released within the last six months that earned the highest possible reviews from their critics of choice. Next they would select a film from the list and have it piped immediately down the cable to their TV without setting foot inside a video rental store.

It’s already possible to link such a service to a favorite pizza parlor or other “we deliver” restaurant, and order dinner at the same time as the movie is ordered. How about requesting that the movie begin 15 minutes after dinner arrives to allow enough time to give the guy a tip and get back to the sofa?

In the same way, an intelligent TV guide will guide viewers through regular cable television programming. Searches by actor, calendar, time slot, etc., will help TV-watching become a custom, selectable experience.

In addition, says Hawkins, TV shopping will be much more advanced than what the Home Shopping Network can offer today. Clothes, music, cosmetics and other personal items will be available via simple on-screen selections, presented to viewers based on their personal profiles.

“Pay-per-play” video games are likely to come down the pipe, as well as new versions of “Jeopardy” and golf, and even music videos (pick your camera angle). It’s this variety that will sell viewers on I-TV, says Hawkins, not one hit application, even movies. Waiting for a hit is “crazy. What is the one TV show that makes television a success?” she asks. “It depends on who you ask.”

STOP TALKING TECHNOLOGY

Mark Dillon of GTE Imagitrek, a division of GTE Corp. in Carlsbad, CA, devoted to tracking and implementing new technologies, says I-TV is the “most exciting application I’ve worked on in the past year.” And it is applications, not technology, where Dillon believes energy should be focused.

So Imagitrek, which has worked on such pioneering applications as the Verbum Interactive CD-ROM-based magazine, asked Philips to beef up its CD-I multimedia player to serve as a special platform for interactive TV applications.

No baseball cards. Instead of making a prototypical baseball application, GTE started working with a “Discovery”-type channel concept that provides access to interactive articles from the World Book encyclopedia.

The CD-I box is hooked to the TV and “knows” what you’re watching. Select a button on the screen that controls a screen overlay and more information will become available, spun off the CD-I disc onto the TV screen.

He believes such a system may “dull [viewers'] addiction to the remote by adding value,” though some questioners — including Viacom’s Horowitz — state bluntly that the insertion of video overlays in the home is a violation of copyrights.

Real-time market research. Dillon says the service will be installed after October 1, 1992, in Cerritos, CA, site of GTE’s fiber-optic-wired “home of the future” project. No decisions have yet been made as to whether cable companies will provide the beefed up CD-I box to consumers or whether the consumers would have to buy it themselves. An informal audience poll showed that only one-third of Digital World attendees would pay $500 for such a box, half would pay $250, but almost everyone would pay $10 a month for it.

‘TV WITH A STEERING WHEEL’

Viacom’s Horowitz made it clear that, as all have suspected, cable has wasted no time developing and implementing its own view of interactive TV. The wholeness of his vision, especially his plans for Viacom’s Castro Valley fiber site, signals a sea change in the state of the art. He calls it “TV with a steering wheel.”

Creating the package. There are, however, some significant gating factors to widespread adoption of I-TV. So far, says Horowitz, the industry hasn’t been very successful at coming up with authoring tools that allow the creative community to “push the envelope” on TV programming (certainly a viewpoint echoed by many of the artists who attended Digital World this year).

What Viacom needs, he says, are tools that go beyond the “thermonuclear war” between Apple, IBM and Microsoft and work on all authoring platforms.

Another mind shift must occur in the “package creation” side of the business. I-TV poses an entirely new paradigm for package creators who are accustomed to one massive problem set, that of coming up with a “package” of 24 hours of programming per day.” Packaging interactive services will be an enormously difficult and expensive process,” he says. It will require conceptualizing not “single-cartridge, single-user” applications, but as Diana Hawkins suggested, a continuum of services.

Moving the package. Delivering I-TV requires “a long-distance transportation company,” as well as transition to a regional transport company. There are presently no standards, though as phone and cable systems become more interoperable, says Horowitz, some thought should be given to whether the same protocols should be used to get to the local cable system as are used for long-distance transport.

What Viacom wants is a standard transport system onto which it can hook different kinds of specialized services. Although it’s interesting to think of compression as a kind of standard network application, Horowitz says that a standard compression algorithm for digital video may be what pushes I-TV over the top.

“Then the ability to invite new players into the box or switch business exists for the cable community,” he says. “Up until now, we haven’t done a very good job of working with the consumer electronics business and we’ve done nothing with the phone company. In the next 12 to 24 months, a digital transportation standard will be established, and we’ll be able to harness the benefits of digital transmission within the telecommunications or the telephone industry.”

Competing with the telcos. Still, there must be a physical medium to transport digital video, and replacing today’s coaxial cable trunk lines (the lines into the home) with fiber “opens up a new world,” says Horowitz. A gigahertz of bandwidth, which is what fiber can provide, can deliver 150 analog channels, or more than 600 digitally compressed channels, to 500 homes.

Horowitz also clearly sees cable moving beyond its role as a television provider. In recent conversations with chairmen Bill Gates of Microsoft and John Sculley of Apple Computer, he asked them why they continued to design networks to work with the phone system — capable of 56 kilobits of speed — when they could get 10 megabits with cable, a way to achieve direct connectivity without incurring the expense of a phone call.

THEY’VE GOT IT COVERED

Viacom obviously intends to cover all facets of the I-TV market like a blanket. A new multifunction consumer device or set-top converter, first mentioned by Imagitrek’s Dillon, is something Viacom is now trying to define. It will connect with a VCR, tell consumers what’s on TV, hook to a computer, and include telecommunications capabilities.

In addition, Viacom intends to be a leading producer and distributor of interactive entertainment, via its “creative work force, programming trademarks, audience access and ongoing capital investment in programming” such as MTV and Nickelodeon, its animation and movie libraries and other enterprises. It already controls “enough [satellite] capacity to do anything people would ever dream of, and owns a giant cable operation as well as radio stations.

Viacom has also converted its Castro Valley cable system into a tabula rasa — “an environment where technology isn’t the limiting factor” — where 17,500 homes are connected to a gigahertz, two-way network with so much extra bandwidth that Horowitz says some of the fibers may be used for telephone services.

In addition, Viacom will offer network nodes to outside companies such as IBM, Apple and Microsoft. “We’ll help subsidize the cost of their ideas,” Horowitz says.

Such a system is a perfect place for Viacom to do market research. Pay-per-view is a no-brainer, as is an electronic program guide. Horowitz is fairly certain that consumers won’t pay for anything that’s more expensive than a VCR, around $350 retail, but doesn’t know whether the company will offer it as a subsidized purchase or a monthly rental. “Five hundred dollars is way too expensive if you want a broadly distributed consumer service,” he says.

HOW DESPERATE ARE WE?

Horowitz closed his talk by saying that I-TV is all about entertainment, whether what’s being piped into the home is information or movies. “It had better be fun or they won’t use it,” he says.

It’s easy for anyone to see the truth in that statement, but still there is something disquieting about the seemingly universal need to make everything “fun” for consumers. In addition, I-TV poses a number of serious privacy concerns that no I-TV supporter, anywhere, at any time, volunteers to address. Is it just assumed that because someone has an interactive system in his home, he is agreeing to a carte blanche surveillance of his viewing, shopping, and gaming habits? If the cable system is indeed enabled as a telephone, will there be regulatory restraints in place that keep cable operators and advertisers from watching and recording whom he calls?

Certainly the concept of interactive TV is a powerful and exciting one, and many hold out great hope that it can resurrect the dying institution of television. But as large, influential companies like Viacom move forward with I-TV, industry and consumers alike must make sure that I-TV doesn’t create a scenario even more insidious in its own way than what the passive, couch-potato model hath wrought until now. We cannot be that desperate.

Denise Caruso

MULTIMEDIA COMPUTING
Is interactivity all it’s cracked up to be?

Forget real-time video. Forget stereo sound, glitzy titles and animation. Forget even the megabytes of information behind that torturously designed user interface. What interactive multimedia is really all about is storytelling.

That was the consensus reached by several longtime multimedia producers at the “Multimedia Computing: Is Interactivity All It’s Cracked Up to Be?” panel at Digital World. But how you tell the story with interactivity as an integral part of the telling process is what producers are still trying to figure out. And even if they can figure that out, some veteran producers still wonder whether there is a viable market for interactive multimedia products.

BEGIN AT THE BEGINNING

After several years of producing interactive presentations, Max Whitby, founding director of the London-based MultiMedia Corporation, an interactive media company associated with the BBC, believes that the key to success lies in linear narrative, that is, providing a central story as the backbone to any interactive presentation. Without a central story, the film clips, sound bytes and text boxes that make up an interactive presentation are no more meaningful than the sound and video bytes that are the stock of TV news and information programs.

Assuming that the viewer is excited by interactive technology is not enough. “Narrative is the driving force that keeps people engaged,” said Whitby, whose many interactive credits include Hyperland, an interactive fantasy about the future of TV that was written by and starred science-fiction writer Douglas Adams. “The real challenge is to come up with a way to offer people interactivity while retaining the narrative.”

To illustrate his point, Whitby showed a video of viewers watching an interactive exhibit about the earth, designed for a German museum. Images were projected onto a screen, so that viewers who wandered upon the exhibit would first be attracted by the enhanced satellite imagery showing scenes of the earth, while a computer-based presentation operating in parallel contained more in-depth information about the images being displayed.

RADICAL STORYTELLING, NARRATIVE BACKBONE

Greg Roach, publisher and editor of an electronic literary magazine called HyperBole, The Art of Digital Storytelling, and a longtime believer and producer of interactive projects, agreed that interactive multimedia, which he called “a radical new art form,” should be focused on a main story.

“You take a central event and go off into it. Branching structures don’t yield anything in the long run,” said Doug Crockford, formerly of LucasArts Inc.’s New Media Group, who recently signed as director of new media for Paramount Communications. “Instead, there should be linear paths, linking you to the narrative backbone.”

Find a good story. Since interactivity requires interaction between the user and the medium, whether a computer or television, the story being told must prompt the viewer, accustomed to passively receiving information, into action, said Crockford. “Participation is not measured in keystrokes per minute,” said Crockford. “Interactivity should deliver a transforming experience. It should move you.”

“A multimedia encyclopedia knows what it wants to be. It’s a reference,” agreed Elizabeth Young, an interactive multimedia producer for Warner New Media, who designed Warner’s interactive CD-ROM, Desert Storm: The War in the Persian Gulf. “What we’ve been missing [in other interactive products] is that we haven’t been motivating people to experience.”

Young believes that multimedia games, such as BrØderbund Software’s Where in the World is Carmen Sandiego? series, which leads users on a globe-trotting chase to catch a thief as a way to teach geography, is on the right track because “they set up a situation that starts to engage you. That makes you want to do it.”

INTERACTION = ACCESS

Shelley Duvall, an actress, director and producer who has spent the last decade producing children’s stories for cable TV, described interactive technology as a way to “enrich the canvas” of storytelling. Through her Think Entertainment production company, Duvall is working with a multimedia firm called Sanctuary Woods on her first “I-CD” — interactive CD-ROM — because she believes interactive technology not only offers artists a new way to express themselves, but that consumers will be excited by the ability to access information however they choose.

Allen DeBevoise, cofounder of AND Communications Inc., an interactive multimedia production company, agreed. “Multimedia is an integration of information in various forms… . What it’s really all about is greater access to information.”

DeBevoise, who helped design and produce the first widely seen (and debated) interactive multimedia presentation, on Picasso’s Guernica, as well as the IBM-funded Illuminated Books series, said that interactivity should be offered in various degrees, depending on the kind of information being presented.

Presentations, for example, provide information only on demand; interactivity is not required unless users want additional or supplemental information. The middle ground of interactivity is multimedia encyclopedias or training programs — you need to get interactive with them in order to get at the information you want. At the high end of the scale DeBevoise sees video games, “where interactivity is the experience.”

LIGHTS. CAMERA. AUDIENCE?

Despite the fact that they are in the business of producing multimedia presentations, several panelists and audience members admitted that the market for interactive products is either still in its infancy or perhaps may even be stillborn, at least in its present iteration. “Multimedia is one of those things that is more fun to make than to eat, just like home movies,” said Crockford. “If you want to be a starving artist, multimedia is it.”

During 90 minutes of animated panel discussion, it became abundantly clear that interactive multimedia has already created a generation of arrow-riddled pioneers who have learned the hard way that making interactivity succeed is not as easy as pointing and clicking.

Nothing was so striking as the contrast between Whitby and Duvall, both seasoned producers of highly regarded television programming. Whitby, a veteran of early interactive multimedia, has watched its underwhelming progress; Duvall burned with the neophyte’s zeal. You didn’t need an interactive presentation to get the message: the newly converted cannot afford to ignore the blood shed by veteran producers, and if a new interactive art form is to emerge, the pioneers must pull out the arrows and allow themselves to be swept up in the infectious enthusiasm of the newcomers.

Connie Guglielmo, Denise Caruso

CABLE, SATELLITE SND CELLULAR
Who will wire the nation

Three years ago, most people expected that the job of moving digital data around the country would naturally fall to the phone company. But the slow rollout of the Integrated Services Digital Network, or ISDN, as well as its half-hearted backing of upgrading American homes to high-capacity, high-speed fiber-optic phone cables, has led to doubts whether the telcos have what it takes. At the “Cable, Cellular and Satellite: The ‘Other’ Information Networks” panel it was clear that other institutions — cable operators and satellite companies — have begun to stake their claims to the new digital territory.

Cable ups the channel count. Terry Hershey, a business planner from the executive vice president’s office at Time Warner in New York, described the new Quantum cable system going into the Borough of Queens, NY. It will replace the old coaxial distribution network, with its branching tree topology and many amplifiers. The new system uses a “fiber to the neighborhood” approach: each neighborhood (comprising 500–1,500 homes) is served by a dedicated optical fiber that runs directly from the cable headend with no amplifiers.

Within the neighborhood, the signal is still distributed to each home by coax; but no home is more than four amplifiers from the end of the fiber. Quantum should thus be vastly more reliable than its predecessor. It also becomes feasible to offer two-way communication between each subscriber and the headend office.

The fiber will have a 1-GHz bandwidth. Half of that bandwidth will be used for 75 ordinary analog (but digitally encoded) television channels, essentially replicating the service that the old system provided. The other half will be used for pure digital service. Using digital compression to squeeze three channels into the space usually occupied by one would be sufficient to add 200-plus channels, but Hershey expects that by the time Quantum is complete, it will be possible to compress TV programs by as much as 8:1, allowing more than 500 channels.

(See “Interactive TV Arrives” story, p. 20, for information on Viacom’s upcoming fiber-wired cable system in Castro Valley, CA.)

Most of these channels will be invisible to the user, being used for such services as pay-per-view, which would be selected from a menu of movies and start-times. A Broadband Option Selector System, or BOSS, would route the appropriate channel from the fiber to each subscriber.

With such a high ratio of channels to subscribers, it becomes possible for each subscriber to have his own channel for interactive services. Time Warner is exploring potential business opportunities for delivering such services, including:

• Subscriber-to-subscriber telecommunications (Time Warner has an experimental license from the FCC);
• Entertainment and games;
• Shopping (coupons to the home, preference profiles on each viewer);
• Financial and professional services;
• Information services; and
• Household services.

Users would get the benefit of a wide range of selections, while advertisers could target their messages to single homes.

Direct broadcast satellite. In some parts of the world, direct broadcast satellite transmission already has greater market penetration than cable. Sky Pix (among others) would like to see the same thing happen in the U.S. with direct transmission of compressed digital video to subscribers’ homes.

Bob Kniskern, chief scientist for SkyPix, described how SkyPix’s satellite distribution scheme works. The advantage of satellites is that the signal is available everywhere, today, even out in the boondocks where cable will never go. There used to be two disadvantages: the cost and size of the receiving equipment, and the fact that transmission goes only one way. But things have changed.

Right now, SkyPix intends to sell the hardware for a complete receiver setup (dish and digital decoder) for about $850. (Besieged by a number of business problems discussed in the June issue of Digital Media, SkyPix is now about three months late launching the service.) Installation is sold separately.

The receiver setup includes a 36-inch dish — small enough not to run afoul of most zoning ordinances –and a TV-top decoder box. The decoder, though it looks simple to the user, is a fairly smart computer that can be completely reprogrammed by downloading software from the satellite. It has a 250-channel capacity; each channel uses 3.375 megabits/sec. of bandwidth, which supports compressed video and audio, control information and error-correcting codes.

As for interactivity, SkyPix already maintains an 800 number for the return link from the decoder back to its billing computer, so the potential is there. The phone line has low bandwidth, but it is more than sufficient for selecting shows or for electronic polling of the sort presidential hopeful Ross Perot has been touting. SkyPix markets the service as a kind of “rental store in the sky,” but is looking at offering electronic publications and education for remote sites as well. To truly compete with cable, it may have to offer popular cable programming (CNN, MTV etc.) as well. Kniskern had no comment on how — or when — SkyPix would be able to do this.

Cellular news transport. Both SkyPix and Quantum are oriented toward home entertainment, but Steve Webert, vice president of product development at Oracle Data Publishing in Seattle, WA, described a business-information service that Oracle and McCaw Cellular are jointly developing.

The plan is to gather data from government sources, news wires and so on; to transport it worldwide by satellites, land lines or whatever carriers are handy; and if necessary to rebroadcast it to so-called “nomadic” devices. Business information, being largely text and numeric data, needs much less bandwidth than video. Webert thinks that a standard T1 channel would be more than sufficient for the uses he envisions, and lower-capacity technologies will have to be used during the startup phases.

‘Cents per month.’ There will be just one data stream, from which users can extract (and pay for) whatever they are interested in. Customers could even temporarily store information for later acceptance or erasure, paying only for the data they keep. Oracle’s goal is to become “the Henry Ford of data,” according to Webert, so it will price the information as low as possible, with cut rates for regular and high-volume customers.

The cost, Webert said, would be “measured in cents per month.” Oracle would make money on volume; the market today, he thinks, is but 2 or 3 percent of what it could grow to over the next 20 years.

Are the telcos doomed? Does all of this spell doom for the phone company? Robert Rosenberg, president of Insight Research Corp. in Livingston, NJ, thinks that it would be a mistake to underestimate the telcos. For one thing, there is new switching technology coming over the horizon; in 20 years, monolithic optical switches could offer both point-to-point dial-up access and enormous bandwidth.

For another, the current rate of replacing copper wires with optical fibers is the direct result of depreciation regulations. With different rules, the phone companies could install fibers to homes on a pay-as-you-go basis. Finally, the cable operators and the phone companies might join forces, allowing the phone companies to contribute their skill in administration and billing.

Mike Grubbs, senior director of marketing for Tandy Corp. in Fort Worth, TX, points out that it is far too soon to settle on one digital distribution system. Each of the existing pipelines is optimized for a certain purpose and will probably continue to exist for a long time. Tandy, at least, intends to support many different data pipelines. Indeed, this seems like the only intelligent path to pursue.

Peter Dyson

RAPPIN’ WITH LILY, JANE, ALLEE AND SHELLEY
Seen with a fresh eye, it’s ‘just an ungodly fabulous medium for an artist’

Wednesday evening’s “Artists Rap Session” at Digital World brought together songwriter-artist and Digital World keynoter Allee Willis with actress-director-producer Shelley Duvall, actress Lily Tomlin and author Jane Wagner.

Holding court to expound on their views and address the relationship between artist and technologist, all four expressed unbridled enthusiasm for the potential of the technology, as well as a kind of horror at the lack of “magic” in the current slate of titles.

By the tone of their comments, it was clear that none had extensive experience with interactive media (although Duvall is producing her first interactive CD through Sanctuary Woods, a Canadian multimedia company). But their vision of multimedia, interactivity and all things digital was unanimous: the new technology is too exciting an opportunity to let pass.

All spoke about the chance to innovate and go beyond the confines of traditional artistic media. And most importantly, all of them felt that these new technologies provided the opportunity to cause real change in the world, not just in entertainment.

‘THE BEST THING EQUIPMENT CAN DO FOR CREATIVE PEOPLE IS TO ALLOW THEM TO GET ON WITH THEIR CREATIVITY.’

There are still no definitions for the form that this new entertainment will take. In fact, the virtually unlimited possibilities were one of the most intimidating aspects of the technology. When you can do almost anything, they asked, where do you start?

‘WHAT YOU DON’T KNOW, HIRE’

Between the four, the feelings about technology ranged from sexual exhilaration to downright fear. “Technology is scary,” said Jane Wagner, especially when the old familiar tools are replaced by expensive computers that are intimidating to most.

Shelley Duvall had the quick answer: “What you don’t know, you can hire.” While this was a somewhat facetious answer, it is an article of faith among these artists that the collaborative process in most endeavors is part of the pleasure and satisfaction of creating new works.

Loving collaboration. As in film and recording, most media, certainly any electronic media, require the talents of skilled engineers, and Willis made it clear that most artists have enormous respect for their technology-based partners. “We are turned on by working with a new medium and with people who know more than we do… . We all love collaborating,” she said.

When asked if artists would have to become programmers as well, Wagner responded that she wanted “knob knowledge.” She wants to be able to operate the machine without having to know how it works. Says Willis: “The best thing that a piece of equipment can do for any creative person is to allow them very quickly to get on with their creativity.”

All agreed that the engineer and the technologist are now as much artists in their own right as those who work in the “traditional” arts, working with hardware and software tools instead of pencil, paper, keyboard and paintbrushes to produce emotions.

Learning to be inclusive. The artist’s contribution to the process is crucial for its success, especially at this early stage in the medium’s development. The purely “entertainment” aspects of these products are crucial to helping people new to the technology overcome their fears and enjoy what they are participating in. Humor is particularly important in such circumstances. “To overcome the fear of technology, you have to make them smile… . If you don’t know how to draw people in, I think this is going to remain a technology that is [only] discussed at these seminars,” predicted Willis.

But assuming that the artists and technologist learn to collaborate, what will these new products look like? No one had a single answer. Duvall stressed that interactivity was not just about multiple endings to a story. “One story is sufficient to stir millions of ideas.” Every word, thought and visual image has the potential to link to history, games, a pop-quiz follow-up. And all of these things can accompany a linear story, making the presentation — and the story itself — much richer.

BURSTING OPEN THE MIND AND SOUL

To the artist, the most important aspect for the success of the new medium is the ability to heighten the experience for the audience. If “art” is defined as that which lets you experience emotion, then interactivity allows other people to share experience and emotion with the artist.

Interactivity and exploration are part of the artistic process, which Willis described as “a fantasy world of highs … being able to say what it is (we) want to say.” Letting an audience experience this “high” is what she is striving for. “That level of fantasy and magic to me is what feels missing from some of the things I have seen,” she says. “That magic needs to be there… . Here is a medium that can allow the person who watches it — who uses it — to have those moments. Because within your program, they make up their own thing.”

Tomlin put it a little differently. “I want it to be thinky, feely, smelly, orgiastic, orgasmic kind of interactive TV,” she said, to the delight of the audience. To Tomlin, the new technology could “burst open the mind and soul,” and raise the consciousness of the audience. “We want to affect people in a really visceral kind of way,” she says.

Willis believes the new medium will dramatically change the creative process itself, since part of the deal is allowing someone else to manipulate what the artist has created. Instead of adding levels of interactivity to existing entertainment products, as many (including Duvall) are talking about, Willis wants to create a whole new “total entertainment” experience.

If this were the case, there would be no frustration in someone altering your work, but exhilaration in “knowing your audience is taking an active role in enjoying it as well,” says Willis. “I really think it’s just an ungodly fabulous medium for an artist.”

David Baron

NEW MEDIA AND ART
What happens when equipment vendor meets artist

Artists and techies bonded at Digital World, realizing they need each other to take interactive multimedia projects out of the programmer’s garage and into the artist’s garret. But can this collaboration drive new media into the museums and stores without increased support for artists from computer companies?

Judging from the applause every time speakers at Digital World said existing interactive products were “boring,” multimedia clearly has not transcended existing art forms. In fact, multimedia producers and creators of interactive experiences seem to be stuck, staring out the rear view window: they keep trying to “repurpose” the content from movies, television, video games and even books, and to copy the design paradigms established for these media as well.

IT HAS TO BE NEW

How can that be? The answer involves issues of access — to people, content and equipment.

According to the three artists who sat on the “New Media and Art” panel at Digital World — Abbe Don, Rick Smolan and Michael Century — the conference itself went a long way toward removing one of the major stumbling blocks: access to people. “The clear message at Digital World,” says Don, creator of interactive art installations that allow the viewer to become a participant in the event, “is that technical experts and artists must collaborate in this new medium to create an experience in the same way they have for years in the music and film industries. We will see more interesting projects as that joint effort increases.”

Now acquiring interesting content is no small feat, but it’s not an insurmountable problem — especially for artists who have worked in video or print. Both Don and Smolan, for example, have adapted early creations to different media, adding levels of interactivity unavailable to them prior to working with new technologies. Century, in collaboration with poet Vivian Darroch, created an original performance called Quartet for a Solo Pianist using digital technology as his chosen medium.

Artists also have access to copyright-free audio and video through clip media houses, and to a surplus of images that have made their way into the public domain. If you want to “repurpose” Batman or Dracula, however, you’re going to have some big problems today. Legislation and intellectual property laws have not caught up with the digital world (see “Does ‘Digital’ Equal ‘Free’?” p. 34).

EQUIPMENT IS THE REAL HURDLE

The real hurdle for artists is access to equipment. Creative institutions such as the Banff Centre, which encourage artists to experiment with new technology and allow them to keep copyrights to their work, are few. In fact, the Canadian-based center is one of only four such institutes in North America; the other three are in Canada as well.

The nonprofit Banff Centre, which receives funding from the Canadian government, the private sector and industry, founded its Media Arts division in 1988 with the stated mission of “addressing the convergence between the arts, technology and science in a rapidly changing technological environment.” Banff trains traditional artists in how new tools can be applied in their arts, according to Century, programming director for the institute.

Trading precious rights. Banff supplies all the tools to create new media in an artist’s community without demanding the creator give up rights to the work. But artists must be invited or accepted to attend the Banff Centre, and even then attendance is limited. So where do artists turn when they want access to equipment for experimentation? The computer companies. But, the Digital World panelists forewarned, they may be trading their precious intellectual property rights in exchange for a computer and some software.

As far as Don is concerned, companies such as Apple Computer still don’t get it. They either control the creator or own the work, treating commissioned artists as if they were third-party software developers, producing tools or user interfaces that the company can later sell under its own name, or as outside contractors who relinquish rights to the actual fruits of their creativity. Either scenario could not be less descriptive of an artist’s relationship to his or her tools and work.

A new model. “As a creator I fall in the cracks,” says Don, who believes if she were indeed a software developer she’d have no problem getting unfettered access to cheap and/or free equipment. “I’m not important enough to say, ‘Hey, I’m developing this stuff, and I need x, y and z,’ and on the other hand, I can’t just sign Apple’s contract agreements, which expect me to give up everything in exchange for use of the technology. I genuinely believe that we need to develop a different kind of model separate from third-party developers and different from contractor agreements.”

WHAT HAVE YOU GOT THAT I AIN’T GOT?

One possible compromise for artists who find it necessary to work with computer companies seeking full rights is to suggest they co-own the work, or at least parts of it. Smolan, for example, had the original concept for the Day in the Life series of coffee-table photo books.

Smolan is now producing From Alice to Ocean: Alone Across the Outback, also a large-format coffee-table book, the chronicle of one woman’s year-long journey on camel through the aboriginal lands of Australia. Buyers will find a free PhotoCD disc when they unwrap the book, containing hundreds of additional photographs as well as spoken narrative both by Smolan and by the book’s subject, Robyn Davidson.

To produce the book, Smolan needed access to both Kodak and Apple technology, so he proposed the two companies sponsor the project. As sponsors they agreed to cover the creative costs of designing and manufacturing the CDs for Smolan’s book, if he would give them the rights to manufacture an equal number of discs for their own use — for promotional purposes and as a bundled item with Apple’s upcoming Macintosh LC with a PhotoCD-capable drive built in.

For Smolan, this is a win-win situation. The technology allows him to extend the confines of traditional print publishing to provide “branches” of information on particular photos, groups of people or locations, plus hundreds of additional images in a PhotoCD format. Apple gains access to a new distribution medium for its products, possibly tickling the fancy of the home computer market. Kodak gets access to a good reason for people to buy its new PhotoCD player.

“I’m not sure the disc will ever replace the book,” says Smolan. “The fact that the book’s sitting there on the coffee table means easier access, but if 60,000 people get a copy of the book with the CDs bundled with it, then I have raised the awareness of more people about this technology than an interactive CD-ROM publisher who sells 3,000 copies of a title.”

THE STREET VALUE OF AWARENESS

But is raising awareness enough? If the idea is finally to bring about some interesting multimedia titles and interactive experiences, with a market for this stuff to follow, artists must be free to discover the new possibilities in performance inherent in this technology without having to sell their souls to corporate sponsors. They must be free to use whatever technologies they need in order to serve the creative process.

Some will say, “No one’s making them take money or equipment from corporate sponsors.” But it’s important to remember that the equipment required to design interactive products is incredibly expensive. Successful, high-profile entertainment artists like Lily Tomlin and Shelley Duvall can afford the technology or have the clout to induce someone to provide it for them. But most artists do not. Short of a new Medici family or acceptance at a Banff Centre, the equipment vendors provide artists with no other choice.

No choice at all. And no other choice is no choice at all. An artistic medium cannot even be born, let alone survive, if its only role is to serve us yesterday’s content with some minor repackaging. Thus artists and innovators — not technology innovators, but those who innovate with media — must have access to the technology “so that they can shape the new medium with content and techniques first unimagined by its inventors,” as Century explains. And unless there are plans for a dozen more creative centers like Banff on the drawing boards, computer companies hold the key.

These companies must open their relationships with artists and create a new model, as Don said, for handling the people who are going to take their tools, and a brand-new medium, to its next level. These artists are excited; they have ideas; they don’t understand or want to hear about technological limitations.

Negotiations between artists and companies must become more fluid — perhaps a bit more like a waltz than a slam dance in the pit. In the meantime, artists looking for access to equipment had better make sure they have a bargaining chip — something the computer companies want — to keep their work from being co-opted for the sake of publicity, or locked up in some research lab. Their ability to do so is likely to determine the direction, and ultimate success, of new media in art.

Janice Maloney

ARE WE HAVING FUN YET?
Location-based theme parks turn virtual into reality

Imagine this: You’re sitting in your office, stress is building. You need just five minutes away from it all to collect your thoughts and get a grip. You put on a head-mounted display and — ahhh, you’re surfing, rocking in your chair and shifting your feet on the carpet as you try to stay on the board. You ride out your wave of stress with a so-called “remote presence” (in this case, a live surfer in Hawaii) who rides the wild surf “with” you in 3D audio and video.

JUST YOUR IMAGINATION RUNNING AWAY WITH YOU

Of course you can only imagine such a scene, because location-based entertainment such as this is not yet available — though as they say, “they’re working on it.” Panelists at the “Location-Based Entertainment: Theme Parks and Virtual Reality” session at Digital World say that today it’s vastly expensive to create this type of individual experience. Sensors and hardware for the surfer alone are probably a cool quarter of a million dollars, never mind the cost of insuring the stuff for use in the water.

What we do get for our virtual reality (VR) entertainment dollar today is spaceships in stereo 3D crashing across a big screen, while the seats we sit in thrash, tilt and whirl about, directly linked to the action washing over us. If you thought roller coaster rides could turn your stomach, imagine a Sanrio-sponsored Hello Kitty VR theme park — it exists! — complete with piped-in smells and bad 3D.

Cash cows and movie houses. Seems rather primitive in comparison to remote surfing, but big-reputation entertainment companies such as Walt Disney, Time Warner and Iwerks Entertainment are banking on these big screen movie experiences becoming a multimillion dollar business — the movie houses of the future.

And, if you believe the figures being bandied about, there is definitely a lot of cash to be made in creating simulated worlds that thrill seekers can step in and out of at the same rate Imelda Marcos changes her shoes. “The viability of location-based theme parks is not a question. People have done their homework,” explains Scott Billups of Los Angeles-based Billups Communication, who’s working behind the scenes on several of these “rock ‘em, sock ‘em”-type venues.

The Cinetropolis network. One of Billups’s projects is with Iwerks Entertainment, on “urban movie parks” known as the Cinetropolis network. Total annual sales per center are projected at up to $15 million. The company expects to have 60 sites worldwide within two years and will unveil the first three by the end of 1993. While Billups was sketchy on the details, each Cinetropolis center would provide four different themed venues, including a big-screen experience, a “turbo tour” theater (probably for bobsled or race car “ridealongs” and the like), a 360-degree panorama music video theater, and a virtual-experience theater.

Iwerks, which has produced many large-screen science films for museums since it was founded in 1986, says only so-called “Hollywood entertainment,” such as Terminator, will be shown in the big screen rooms at Cinetropolis centers, saying “it will no longer be a film, but an experience.”

HIGH-RES, BIG BUDGET, LOW CONTENT

There are others, however, who would call it a nightmare. Not everyone is a fan of these themed venues, where the motto for entertainment seems to be the higher the resolution (and, we might add, the volume), the lower the content.

The two remaining Digital World panelists — Sally Rosenthal, producer for the Beverly Hills-based Magic Box and cofounder of big Research; and Brenda Laurel, videogame veteran, consultant for Paramount Pictures and Oliver Stone, among others, and author of Computers as Theater — both believe consumers want more out of these “experiences.” They believe group participation, control and intellectual stimulation will be more important than sensory overload.

In fact, even Billups believes what people really want out of a VR experience is to control their environment. “We are so manipulated, we are so controlled in this society that it’s nice to be able to control that media environment for just a little while,” he says.

The Audience Participation event. The point was proven at last year’s SIGGRAPH show (the leading computer graphics expo) in Las Vegas, where 5,000 people screamed their delight while they played a game of Pong en masse, on a 30-foot-by-40-foot screen. Players held up paint stirrers, each equipped with 2-inch colored squares of a highly reflective material called Reflexite, to control the action.

Panelist Rosenthal produced that installation, called Audience Participation, as the director of the Electronic Theater at SIGGRAPH, and she showed the resulting video at Digital World. Billups had been in the audience for the experience. “That was one of the most amazing and impactful VR experiences I’ve ever had, and I’ve been in damn near every virtual environment there is,” he says.

Rosenthal said that she and Loren Carpenter, creator of Audience Participation, staged the SIGGRAPH installation for less than $20,000 (though some of the materials used, and the installation space itself, were donated). In three days, 15,000 people experienced it. For contrast, one Cinetropolis center costs Iwerks $15 million, not counting the land it’s built on.

From project to product. Audience Participation was such a success that Magic Box is now helping Carpenter turn it into a product. Companies in the Fortune 500 and various rock stars have already shown interest in the prototype for use during event presentations. “That Pong game was the first time people knew that they were having individual input,” said fellow panelist Laurel, who was also a participant. “Something really electrifying happened to that crowd. It offered a paradigm where the author gets to make choices in a confined world. It was genuinely innovative.”

Others found it so innovative that Rosenthal and Magic Box are going to use the technology behind Audience Participation to build a location-based theme park (for an unidentified sponsor) in Japan. The park, which is expected to open in the spring of 1993, will revolve around a “time and space machine” experience, where groups of people will use wands with the Reflexite material attached to choose an experience from a different world or time period, such as when the dinosaurs lived.

The group’s chosen experience — majority rules, in true democratic form — will then surround them in a big-screen venue. Billups, who says he was inspired by the Audience Participation prototype, is also now working on a VR concept that will involve this kind of collective interaction and group decision making.

LOCATION AS THE THEME ITSELF

For Laurel, the concept of “location” far outweighs the concept of “theme” in her proposals for location-based entertainment. “A relationship with a natural landscape [among the native American nations],” she says, “was a principal technique for establishing the kind of emotional engagement that we yearn for in entertainment today.” This rift, she believes, can be mended through a form of location-based entertainment called surrogate travel, which offers both pleasure, and a sense and experience of something greater than ourselves.

Surrogate travel is a cinematic record of a place that provides multiple possibilities of getting from here to there. Examples include the original surrogate travel piece, the “Aspen Movie Map” done by Michael Naimark, Bob Mohl and Kristina Hooper Woolsey for the Aspen Design Conference back in 1980, where crews fanned out and filmed every street and storefront in Aspen, as well as an installation of Naimark’s that’s still at the San Francisco Exploratorium — a “fly-by” of the San Francisco Bay Area. “This form of location-based entertainment,” says Laurel, “is for people who can’t or don’t want to actually be there.”

Save the planet, make money. Laurel made a “modest” proposal at the conference, suggesting that people in the location-based entertainment industry could save the planet and make buckets of money by providing surrogate travel installations around the world.

These installations would of course never be placed close enough to a natural environment to disrupt its ecosystem. “Who knows or cares what Anaheim looked like before Disneyland?” she says. Even today the installations can be enhanced with “everything from 3D …imaging to scientific visualizations of the geological history and (possible) futures of a place,” offering surrogate travelers a much better view of the land than they would find possible through the window of their vacation Winnebago.

Another content void. In nonvirtual reality, though, what do we have today in the form of location-based entertainment? In the United States, at least, it’s theme parks with big screens and shifting seats. We are still spectators, watching the action take place away from us.

Perhaps the way to solve this content void is — yet again — to place the technology in the hands of real story tellers and creative people. Disney or Iwerks should consider funding creative institutions like the Banff Centre, where artists in residence (including Brenda Laurel, who will be there next summer working on a VR research project) can take a crack at producing the story line for a location-based entertainment theme park. Her ideas might blow us away — but emotionally and intellectually, rather than via large-scale pyrotechnics.

OTHER INTERESTING WRINKLES

The advent of home video and video rental has changed the movie business. People can now see most films quite adequately (and relatively inexpensively) at home. What you cannot get at home is the experience of the big screen, the big sound, the big effects. The logical response is that people increasingly will only pay to see “big” movies at the theater. The others they wait to see at home.

The advent of movies on-demand, detailed in other panels at Digital World, will only aggravate this effect. It may, however, redirect the priorities of the studios back toward movies that play well on a small screen, since they will now get a slice of the per-showing revenue (which they do not get in the video rental market).

In a digital world, the monster special-effect theaters may be the best remaining way to get us out of our homes and into a theater. This is the T2/Batman effect taken to its logical conclusion.

However, until there are a lot of these theaters, they will not represent a large enough market to make it worthwhile for people to produce great entertainment for them. There is a real danger that they will become the 3D or Cinerama of the 1990s: special theaters for productions that show off technical wizardry, but which are devoid of any other redeeming values.

A new pacifier for the populace? The biggest question is whether virtual reality technology is the next generation of populace pacifier, son of broadcast television. Even Laurel’s eloquent plea to leave nature to the nature lovers, and let the tourists experience it through surrogate travel technology, has its dark side. There are plenty of people who, missing the point, would ask: “If we have a perfect simulation of the Brazilian rain forest, down to the sound of the dripping dewdrops, why do we need the real thing? Let’s tear down those trees and build condos.”

In our ongoing love affair with technology we have uncovered the capability to create disposable worlds, full of simulated people, plants and animals. We must ask ourselves before these simulations become part of our reality — entrenched in our daily lives as deeply as TV is today — if they’re a good thing. Will it lessen the value of real events, just as TV news footage has become indistinguishable from the cinematic violence in the Eight o’ Clock Movie? And where will we go from there?

Janice Maloney

TECHNOLOGY AND EDUCATION
‘Children can do more than you think’

The “Technology and Education” sessions have always been among the most popular at Digital World. Everyone is concerned about education. Everyone has personal experience (good and bad) with existing educational systems. Most adults have (or expect to have) children of their own who will go through the educational system. Nearly everyone recognizes that the country faces a crisis in education. Most Digital World attendees would like to believe that new technologies can somehow make a difference.

This year’s panel was charged with addressing precisely this question: “Can technology make a difference?” The panel consisted of five people with diverse backgrounds and experiences:

• Helen Kelly, a teacher and one of the principals involved in a five-year pilot program that had involved 11,000 randomly selected children in four “disadvantaged” Los Angeles schools.
• Mary Fallon, communications manager for Apple Classroom of Tomorrow (ACOT).
• Steve Krashen, professor of education and linguistics at USC and consultant to a number of school systems.
• Rick Lippert, senior educational consultant with Computer Curriculum Corporation (CCC), a division of Simon & Schuster, one of the world’s largest suppliers of computer-based instruction packages.
• Jim Blinn, CalTech professor, well-known computer graphics pioneer and director of Project Mathematics.

ON THE THRESHOLD

The panel was clearly split on the question of how technology can/should be best applied, and on what impact it can have on education. However, three of the five members argued very convincingly that we are on the threshold of being able to use new technology in ways that can make a big difference in what students learn, and how they learn it.

Blinn’s Project Mathematics is essentially packaging creative teaching (of mathematics) on videotape, making extensive use of simple computer graphics. The tapes are used by teachers as a supplement to their own presentations. Because VCRs are inexpensive and ubiquitous (and because production of a linear video is less expensive than production of a computer-based interactive title), Project Mathematics is able to reach a great many classrooms very inexpensively. It now has 20,000 tapes in the field — plus an uncounted number of copies. (Schools are encouraged to make their own copies.)

Think of this as a means of giving broad distribution to really good teacher presentations.

The orthodox approach. CCC’s Interactive Learning Systems (ILS) represent what has become the “orthodox” approach to computer-assisted instruction: networks of PCs and Macs running CCC interactive programs that provide students with individualized instruction and drill. CCC claims that it has 30,000 student histories that show that 20 minutes a day of interactive instruction for one school year can yield a two-year increase in math skills and a year-and-a-half increase in reading skills.

Think of this as a means of computer-assisted study, drill and follow-up instruction.

Although the other three panelists had no problems with what Blinn is doing, they disagreed strongly with the sort of traditional computer-aided instruction approach represented by ILS. Krashen said that even the gains reported may be short-lived.

HOW WE LEARN

There are, Krashen said, two hypotheses about how we learn. The “study” hypothesis says that we learn by deliberately and consciously trying to put new knowledge into our heads. The “problem-solving” hypothesis states that we learn as a by-product of solving problems. In Krashen’s view, “the first hypothesis is false and the second is true. In other words, study does not work very well.” He backed up this argument with convincing examples of the amazing kinds of things we all learn in everyday life.

Both Kelly and Fallon agreed with this analysis. In Kelly’s project, students had used computers as tools for doing projects (and had mastered computer operating systems, networking, building HyperCard stacks and video production in the process). The children loved coming to school, and, in fact, would come to school during off-time and vacations just to work on their projects.

MONEY IS A CRITICAL ISSUE

Fallon cited examples of what can be done. The most comprehensive of these has been a four-year project monitored by researchers at Ohio State University. High school students who had access to a rich mix of technology to pursue collaborative, problem-based projects showed dramatic increases in eight abilities identified by the U.S. Department of Labor as critical for tomorrow’s workplace: dynamic exploration and presentation of information, experimentation and problem solving, social awareness and confidence, effective communication, computer use, independence, expertness and collaboration and a positive orientation toward the future.

No one thinks that technology is a panacea. Everyone agrees that it should be used as part of a comprehensive program that includes teacher training, parent involvement, and, most of all, more money. However, the consensus among at least the majority of the panelists is that problem-based learning can make a big difference, and that technology is best applied in making problem-based learning a reality.

Jonathan Seybold

DOES ‘DIGITAL’ EQUAL ‘FREE’?
The intellectual property debate ties itself in knots

Legislation and intellectual property laws have not evolved fast enough to keep up with the digital world, where original works can be copied, manipulated and distributed — without loss of quality — more easily than ever before. How do we protect creative rights holders while satisfying content-hungry, interactive media producers? And without dramatic modifications in our current legislation, are we heading for a digital free-for-all where access to content equals ownership?

These are some of the difficult questions panelists faced during the “Protecting and Valuing Intellectual Property” session at this year’s Digital World. They are the same questions asked of panelists the year before, and the year before that.

MAYBE IT WILL GO AWAY

To date, there are no answers — only hotly disputed opinions among the legal community, and stony silences between rights holders and producers in this new medium. Legislators appear to be playing a game of “If I ignore it, maybe it will go away.”

The painful truth is that there’s no consensus on these critical issues, yet the crux of this new industry rests on solving them. As panelist John Perry Barlow, cofounder of the Electronic Frontier Foundation, says, “The principal reason there aren’t a lot of good multimedia titles is that it’s almost impossible to get rich imagery, and to track it legally and to figure out who owns it and what your responsibilities are to that person if you are going to make commercial use of those images. It’s a vast gray area. And we are not even at a good beginning to figure out how to protect the work that we do with our mind if we don’t have the bottles to put it in.”

A system irretrievably broken. Barlow, who owns the copyright on many Grateful Dead songs and was the only individual rights holder on the five-person panel, proposed a “wait and see approach,” discouraging the use of yesterday’s laws when dealing with today’s technology. “The system we have right now,” he says, “is irretrievably broken for dealing with the world we are about to enter.”

Barlow asked for a show of hands for how many people in the Digital World audience pirated — i.e., stole — software. A surprising number confessed. That, he said, was a perfect example of how badly the law is equipped to deal with the problems posed by digital technology, and as a model for where we are heading if we try to stay within the current legal confines of intellectual property laws, which were exacted in 1791. “The law will sooner or later fail, but it will be expensive along the way.”

To avoid that expense when dealing with copyrighted digital content, Barlow suggests that the law take a hands-off approach to allow similar social practices to develop — with the end goal not of supporting piracy, but of finding a practical way of dealing with it.

“It took many thousands of years of nonlegal property exchange and ownership before we started to develop a concept of property law and contract law,” says Barlow. “Obviously we don’t have a thousand years to develop the social contract for intellectual property in cyberspace, but we don’t want to do it right away either. We want to wait and see what established practice is.”

SKIP THE UTOPIAN APPROACH

None of the other four panelists, agree with Barlow’s utopian approach. All of them believe too much time and money, and too many people’s livelihoods, are entangled in the current structure.

Panelist David Nimmer, intellectual property lawyer extraordinaire, did agree with Barlow that the “law is not progressing toward multimedia.” And in fact, he says, it will not. “I don’t think we have the prospect for realizing … legislative reform,” says Nimmer. What we must count on instead, he says, is “lawyers working together within the existing constraints to reach contracts, to reach [agreement on] licenses, somehow to oil the wheels — creaky though they may be. We have to be creative outside the realm of traditional litigation and legislation.”

Nimmer, along with several other panelists, encouraged rights holders such as musicians, writers and movie makers to band together and license their works on a collective basis. He cited Picture Network International (formerly Electric Book, a company founded by National Geographic photographer Nathan Benn) as an example of a potential new paradigm — an online library, archive and clearing house of commercial, digitized photographs.

YOU CAN’T CURE YOUTH

For Barbara Zimmerman, founder and president of the independent rights clearance service BZ/Rights & Permissions, Inc., all this legal crying is no more than the growing pains of a new medium. Multimedia is just one more medium, like a book or a cassette tape, and rights holders will “learn to ‘do’ digital” the same as they learned to sell licenses to the cable and home video markets. “The main disease [of digital media] is it’s very early, and no one can cure that,” says Zimmerman. “You have to grow up to be 20.”

In the meantime, she emphasizes, deals are being made. Companies, including Philips, Warner New Media and The Voyager Company, are producing digital media titles that include copyrighted material. And most megacontent companies, including Random House and Warner Bros., are exploring this new venue. Warner Bros., for example, is trying to set up an experimental license agreement for digital media for its recordings. “They have to go to every recording artist and ask if they will permit Warner to license this way,” she says. “If the artists approve, they are going to license. But it will probably be months before this process is finished.”

However, Zimmerman says other traditional content houses — she specifically cites Harcourt Brace Jovanovitch — are just saying no to the new medium. This attitude, she says, makes it very hard to communicate the technology’s potential to artists under their umbrellas.

YOU HAVE TO PAY TO PLAY

Bruce Polichar, chairman of the Interactive Multimedia Association’s intellectual property task force, and an intellectual property lawyer who has represented the rights of creative people in the film, music and home video industry for 25 years, believes that naivetĂŠ on the part of digital media producers stymies the market. “There is a lot of conflict in the multimedia industry about valuing intellectual property. We want content without compensation,” he explains.

“People and companies who are in the business of generating original, created things that we place value on earn their livelihood from this process. If we intend to have them involved in a dynamic way in building this industry we can’t just ignore that,” Polichar says. “Writers, directors and artists who make their living at this have to make their living at this. And I don’t think that digital technology eliminates that social reality.”

Polichar thinks it is essential that creators become involved in discussions about brass-tacks compensation issues. “If we do they will have a better understanding of what we are trying to accomplish,” he says. “Then, it will be that much easier to evolve deal structures that on the one hand give us the latitude to get a fledgling industry off the ground, while at the same time offer them a promise of a reward for riding this out. We need to attract rights owners.”

TOO MANY ROADBLOCKS

It’s not easy to attract rights owners, even if you are a big player with cash. Lester Greenman, director of legal and business affairs for Sony Electronic Publishing, said he has hit roadblock after roadblock in his quest for content. “If I could find someone even to tell me what’s easy to get and what’s hard to get, I’m sure I could do what I need to,” he says. “But I can’t find anyone to tell me that much.”

‘There is a lot of conflict in the multimedia industry about valuing intellectual property. We want content without compensation.’

Zimmerman suggests people interested in producing interactive media titles for the commercial market explore three options. The first and easiest in terms of intellectual property laws, but perhaps the most difficult in terms of a producer’s time and budget, is for artists to create their own content. The second is to find out what can be used for free that’s in the public domain. Lastly, Zimmerman suggests that those who need to acquire copyrighted material come to the business table prepared to pay for the original work and with a proposal about how to compensate the owner fairly.

The issues discussed onstage only scratched the surface of what an incredible rat’s nest the copyright issue is becoming in a digital world. Much was left out of the discussion, for sake of time: image manipulation, encryption, tracking content electronically, U.S. law versus the rest of the world regarding “mutilation” of existing artistic works (as in colorization), and the concept of “fair use.” Although it seems unfortunate that such critical issues must rely on the judgment of a terribly flawed legal system as their “trial by fire,” it is most likely that it will be the courts — and not the artists who flourish or perish by the fruits of their labors — that will decide.

Janice Maloney

STRENGTHS AND WEAKNESSES OF THE PHONE COMPANY
(Courtesy of 20-year Bell veteran Ken Thomson)

STRENGTHS
• Customer relationships are strong
• More than 10 million customers/region
• Operate 24 hours/day and 365 days/year
• Billing systems are reasonably accurate
• Financial strength
• Skilled and loyal employees

WEAKNESSES
• Inbred management
• Lack of strategic thinking
• Regulatory mindset
• Entrepreneurship is discouraged
• Lack of market savvy
• Turf orientation
• MFJ (Judge Greene’s modified final judgment)
• restrictions

ADVERTISER VS. CONSUMER SPENDING ON TELEVISION
(Courtesy of Bob Pepper, Office of Plans and Policy, FCC)

1991 U.S. television advertising expenditures: $28 billion (and stagnant)
1991 expenditures by consumers on television: $32 billion (and growing)
This breaks down as follows: $20 billion in cable fees, $12 billion in video rental.
Who says consumers will not pay for information and entertainment?

>I/O
>EDITOR’S NOTE
MEETING AT THE CRUX
Eyewitnesses to an era of transformation

While putting together this issue after last month’s Digital World ‘92 conference, it struck me that we are eyewitnesses to the transformation of an era.

Every speaker from every industry acknowledged that we are indeed witnessing a sea change in human communication. Because of digital technology, all media of communication — television (both broadcast and cable), telephones, print, books and magazines, music, video, and traditional art — are converging on a digital standard.

While this convergence is helping reshape a world that’s moving from an industrial economy to one based on information, it is also moving society into uncharted territory in the areas of intellectual property, rights to privacy and fair use, and access to technology for the less privileged.

It is not often that people have an open forum to discuss the enormity of the issues facing them in this new age; this has been the charter of Digital World since Seybold sponsored the first conference in 1990. What we have attempted to do in this special issue of Digital Media is provide you with context. After three days at Digital World, zooming in on the specifics in this much-discussed “convergence” of industries, the following pages zoom out to provide you with the larger view.

Some of the best known and most respected executives in the convergence industries — consumer electronics, computers, cable television, telecommunications, entertainment and publishing — delivered keynote presentations and participated in thought-provoking panel discussions during the conference. The meetings were sometimes contentious, often contradictory, and always thought provoking.

Digital Media’s editors covered them all.

We hope you’ll enjoy reading this month’s issue as much as we enjoyed writing it. The opportunity to go back and relive, in a sense, the events that took place during those three days made all of us realize just how remarkable are the times in which we live.

No matter what else we learned, it is crystal clear that we are now at the crux of the digital transformation. There’s no more doubt that it is happening — all the convincing has been done.

It is now up to the players themselves to work out how they will converge, compete and, eventually, deliver their version of the future. We hope they understand that their ability to collaborate with each other — and their customers — will decide the ultimate success of their ventures.

Most of all, we hope they realize the enormous social implications of what they do. The fruits of their labors today will have an enormous impact on how we work, play, learn and govern ourselves in the 21st century.

Denise Caruso, Editor

>EVENTS
ETRE
Sept. 10–12, Vienna, Austria
DASAR, Inc.
(415) 321-5544, fax (415) 321-5597

ETRE, the European Technology Roundtable Exhibition, will bring together more than 500 executives from 25 nations in Europe, Asia and North America to discuss strategic industry issues from a technological, financial and international perspective.

The goal of the event is to foster international dialog, networking and strategic business alliances in the field of high technology. Discussion topics will include the EC at nine months, innovation in a commodity market — the PC in the 1990s, and the future of microprocessors and operating systems.

Organizers say committed keynote speakers include Jim Manzi of Lotus, Jerry Sanders of Advanced Micro Devices, Michiyuki Uenohara of NEC, Horst Nasko of Seimens Nixdorf, Larry Ellison of Oracle and Francis Lorentz of Groupe Bull. Executives from the industry’s most dynamic corporations will make presentations daily. Roundtable talks will be chaired by 15 international technology editors from the U.S., France, Italy, UK and Japan.

Top figures from hardware, software and networking firms, venture capital funds and financial institutions as well as distribution groups and service companies will be in attendance. In addition to fostering business ventures and information exchanges, ETRE will serve as a venue for public officials and entrepreneurs to discuss trade issues.

Last year, the conference brought together nearly 450 presidents, founders, CEOs, managing directors and partners of the world’s pivotal high-technology companies. The gettogether was made all the more remarkable by its location in the south of France, not well known for its reliable phone service. Some attendees claimed that bad international telephone service was probably responsible for more on-site deals than anything else.

This year’s conference, to be held in Vienna, in part reflects DASAR’s concern with the changing face of Europe as the Eastern countries begin to break free from communism and ask to participate in the global economy.

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