Telecom/1996-04-telecom-walnutcreek.iso/george.gilder.essays/digital.darkhorse

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Subject: George Gilder Essay: Digital Darkhorse - Newspapers

Here is another article in the series by George Gilder which I thought
you would enjoy for some weekend reading. Send replies in the usual way
for discussion in the week ahead.


PAT

  Date: Sat, 19 Feb 1994 15:43:29 -0500
  From: [e-mail] (Gordon Jacobson)
  Subject: George Gilder's Fifth Article - Digital Darkhorse - Newspapers


    This series of articles by George Gilder provide some interesting
technological and cultural background that helps prepare readers to
better understand and place in proper perspective the events relative
to the National Data Super Highway, which are unfolding almost daily
in the national press.  I contacted the author and Forbes and as the
preface below indicates obtained permission to post on the Internet.
Please note that the preface must be included when cross posting or
uploading this article.

        The following article, DIGITAL DARK HORSE, was first published
   in Forbes ASAP, October 25th, 1993.  It is a portion of George
   Gilder's book, Telecosm, which will be published IN 1994 by Simon &
   Schuster, as a sequel to Microcosm, published in 1989 and Life After
   Television published by Norton in 1992.  Subsequent chapters of
   Telecosm will be serialized in Forbes ASAP.


                      DIGITAL DARK HORSE - NEWSPAPERS

                                    BY

                              GEORGE GILDER


                        MEDIA MIRROR ON THE WALL,
                      WHO IS THE FAIREST OF US ALL?

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

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

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

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

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

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

NEWS IN THE MICROCOSM

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

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

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

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

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

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

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

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

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

     High-definition PC displays will benefit text far more than
images.  The resolution of current NTSC (National Television Standards
Committee) analog television_62 dots per inch_is actually ample for
most images, particularly the studio-quality forms that can be
converted for digital delivery over fiber-optic lines.  Even the
conventional interlaced TV screen_in which alternate lines are filled
in every second_easily fools the eye for video.  But for fully
readable text you need the 200 to 300 dots per inch of a laser printer
or super-high-resolution screen. Such screens are now being developed.
Overkill for most images, they could supply the first display tablets
with screens as readable as paper.

FAT PANEL'S DIGITAL NEWSPAPER

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

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

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

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

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

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

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

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

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


FULL-MOTION IMAGES OR FULL-MOTION USERS?

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

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

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

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

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

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

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

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

NEWS ON THE NET

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

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

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

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

THE "DOMONETICS" OF THE WORD

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

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

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

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

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

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

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

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

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

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

THE $700 MILLION INCENTIVE

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

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


THE SOUL OF THE NEW MEDIUM

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

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

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

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

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

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

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

THE COMPUTER IMPERATIVE

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

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

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

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

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

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

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

                              #####


Regards,

Gordon Jacobson   Portman Communication Services  [phone]
[e-mail]           [e-mail]
MCI Mail ID:  385-1533    Channel One BBS - Cambridge, MA