Excerpts from George Gilder's Life after Television, New York: Norton, 1994.
Revenues from telephones and televisions are currently at an all-time peak. But the industries organized around these two machines will not survive the century. p 12
Computer networks transmit digital data at a minimal rate of some 10 million bits per second, going up soon to 155 million bits per second. On such a digital flood, 64 kilobits per second of voice can ride as an imperceptible trickle. p 15
Data is rapidly approaching a level of 50 percent of the bits in a telephone network and already comprises 20 percent of the profits. Data income is growing six times as fast as voice income. As the telephone network becomes a computer network, it will have to change, root and branch. All the assumptions of telephony will have to give way to radically different assumptions. Telephony will die. p 15
Television faces a similar problem. It is a broadcast system that assumes all human beings are essentially alike and at any one time can be satisfied with a set of some 40 or 50 channels moving up to 500. In Europe and Asia, 500 channels may seem wretched excess. But compare this array to some 14,000 magazines and a yearly output of some 55,000 trade books published in the U.S. alone. p 15
TV defies the most obvious fact about its customers -- their prodigal and efflorescent diversity. people perform scores of thousands of different jobs; pursue multifarious hobbies; read hundreds of thousands of different publications. TV ignores the reality that people are not inherently couch potatoes; given a chance, they talk back and interact. People have little in common except their prurient interests and morbid fears and anxieties. Necessarily aiming its fare at this lowest-common-denominator target, television gets worse and worse every year. p 15
Early in the next decade, the central processing units of 16 Cray YMP supercomputers, once costing collectively some $320 million, will be manufacturable for under $100 on a single microchip. Such a silicon sliver will contain approximately one billion transistors, compared to some 20 million transistors in currently leading-edge devices. Meanwhile, the four-kilohertz telephone lines to America's homes and offices will explode into some 25 thousand billions of possible hertz of fiber optics. Twenty-five thousand gigahertz is the intrinsic capacity of every fiber thread: enough communications power to hold all the phone calls in America on the peak moment of Mother's Day. p 16-17
All these developments converge in one key fact of life, and death, for telecommunications in the 1990s. Television and telephone systems -- optimized for a world in which spectrum or bandwidth was scarce -- are utterly unsuited for a world in which bandwidth is abundant. p 17
In all these cases, intelligence at the center made up for a lack of bandwidth and computer power on the fringes of the network. But with new bandwidth galore in fiber and air and video supercomputers on the way for under $1,000, all these structures are suddenly obsolete. Over the next decade, engineers will use bandwidth and computer power on the edge of networks as a substitute for switching and intelligence at the center. p 18
In text, where the impact of digital technology came first and most fully, desktop-publishing programs have generated tens of thousands of new publishing ventures such as special-interest magazines. These developments offer the merest glimpse of the possibilities of digital video. Released from the restrictions of mass media, American culture could attain new levels in both the visual arts and literature. p 48
The very nature of broadcasting, however, means that television cannot cater to the special interests of audiences dispersed across the country. Television is not vulgar because people are vulgar, it is vulgar because people are similar in their prurient interests and sharply differentiated in their civilized concerns. All of world industry is moving increasingly toward more segmented markets. But in a broadcast medium, such a move would be a commercial disaster. In a broadcast medium, artists and writers cannot appeal to the highest aspirations and sensibilities of individuals. Instead, manipulative masters rule over huge masses of people. pp 48-49
Television is a tool of tyrants. Its overthrow will be a major force for freedom and individuality, culture and morality. That overthrow is at hand. p 49
From the personal computer to the fiber-optic cable, from the communications satellite to the compact disc, our generation commands the most powerful information tools in history. Yet the culture we have created with these machines is dreary at best. Why doesn't our superb information technology better inform and uplift us? p 56
This is the most important question of the age. The most dangerous threat to the U.S. economy and society is the breakdown of our cultural institutions -- in the family, religion, education, and the arts -- that preserve and transmit civilization to new generations. If this social fabric continues to fray, we will lose not only our technological prowess and economic competitiveness but also the meaning of life itself. The chief economic challenge we now face is how to apply the new technologies in a way that preserves the values and disciplines that made them possible in the first place. p 56
No fiscal or monetary policy, however brilliant, will be able to promote enduring economic growth and competitiveness in a society in which children spend four hours a day wallowing in the nihilistic swamp of television. Families and schools cannot succeed unless our culture upholds moral codes and disciplines and hard regimens of study. In the U.S., culture means TV. It means an endless flow of minor titillations with barely a major idea or ideal. p 57
In 1969, Alan Kiron, a staff scientist at the U.S. Patent Office, coined the term "domonetics" to describe the interactions between culture and technology. Combining the terms "domicile." "connections," and "electronics," Kiron used the term to describe how work and living patterns would be reshaped by the new computer and other communications tools. The concept was filed away and forgotten. With the rapid emergence of microchip and fiber-optic technology, its resurrection is now needed. p 57
Domonetics focuses on flows of communication. Rather than identifying hierarchies, counting units, and defining boundaries -- as economics does -- domonetics stresses social and technological connections. p 57
The force of microelectronics will blow apart all the monopolies, hierarchies, pyramids, and power grids of established industrial society. It will undermine all totalitarian regimes. police states cannot endure under the advance of the computer because it increases the powers of the people far faster than the powers of surveillance. p 61
The new law of networks exalts the smallest coherent system: the individual human mind and spirit. A healthy culture reflects not the psychology of crowds but the creativity and inspiration of millions of individuals reaching for high goals. In place of the broadcast pyramid, a peer network will emerge in which all the terminals will be smart -- not mere television sets but interactive video receivers, processors, and transmitters. p 63
In the world of the teleputer, broadcasters, educators, investors, and filmmakers, who thought they could never go broke underestimating the intelligence of the American people, are going to discover they were wrong. p 67
The position of the broadcasters parallels the stance of mass magazines before the rise of television and the proliferation of a thousand specialized magazines. The TV networks are the Look, Life, Collier's and Saturday Evening Post, of the current cultural scene. Look and Collier's are dead, the Post has survived a much-reduced form by becoming a health magazine focused on the elderly; Life limps along as an uninfluential monthly. Appealing to a mass audience works only when people cannot gratify their special interests. p 67
Video in the future will follow the domonetics not of films but of books. Books are far better than films or TV at capturing the imaginations and curiosities of the people as individuals. U.S. publishers release some 55,000 trade books every year. Both the moral and intellectual level of books far excel the mass media. The religious book business is comparable in size to the mainstream publishing business. Technical, training, and other educational texts constitute another third or more of the market. As the teleputer advances, video and multimedia will veer rapidly away from the current domonetics of TV and Hollywood and toward the domonetics of books and magazines. To the extent that existing publishing firms can adapt to the new technologies, they will tend to prevail in the information age. p 68.
It is unsure how soon the creators will win. But their first victories will probably be achieved over technologies less formidable than the TV. perhaps the first industry to fall before the domonetic tide will be the centralized on-line database. p 70.
Computers multiply data; in fact, one study indicated that data would double 19 times between 1990 and 2000. How will anyone be able to find the information needed in this huge haystack? The world is already choking on data. p 79
T. S. Eliot addressed the problem in this poem The Rock:
Where is the life we have lost in living?
Where is the wisdom we have lost in knowledge
Where is the knowledge we have lost in information?
One might add: Where is the information we have lost in data? p 79
... in 1956 a simple transistor switch cost about $7. By the mid-1970s, the time of the copper crisis, a much faster and better transistor cost about three one-hundredths of a cent. A decade later, a transistor cost a little more than one ten-thousandth of a cent. p 98
With chip cost-effectiveness 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. p 138.
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 editor selects and shapes the matter to be delivered, readers choose, peruse, sort, queue, and quaff the news and advertising copy at their own pace and volition. p 138
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 it and go pretty much where you want when you want. putting the decision-making 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. p 138.
Computers will soon blow away the broadcast television industry. But computers 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. p 139.
Contrary to the usual notion, the electronic newspaper will be a far more effective advertising medium than current newspapers, televisions, 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. p 142
The TV news problem is summed up by the two-minute rule -- the usual requirement that short of earthquake or war no story takes more than two minutes to tell. This rule even applies to the epitome of broadcast news -- CNN. But 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 an matter deeply interesting to the viewer, two minutes is much too little. p 149
The reason for the two-minute rule is that the viewer will not tolerate more than two minutes of an unwanted story. The rule forestalls the zapper; that is it only function. But its effect is to frustrate any viewer with more than a superficial interest in some story. Increasingly it reduces TV news to a kaleidoscope of shocks and sensations, portents and propaganda, gossip and titillation. p 149.
From Cerritos to Denver and on to Orlando, Omaha and Castro Valley, from 3DO to CD-I and beyond, from Broadband to Raynet, from Sony to NEC, all the current and impending disappointments spring from one key mistake. With some key exceptions, all the leading strategists are focusing on the wrong industry. You can't get beyond television by collaborating with TV companies in their long slide to obsolescence. You can't create a new information infrastructure by propping up the old telephone networks with the right to provide TV-type services. p 200
Despite general disappointment in the quality of the titles, the sales of CD-ROMs themselves soared from a few hundred thousand in 1989 to nearly 5 million in 1993. As a harbinger of the future, the CD-ROM actually took over the encyclopedia business in 1993. p 202
More important is the explosive rise in networks. Since 1989, the share of U.S. computers attached to networks rose from under 10 percent to over 60 percent. Some 15 million are now attached to the network of networks -- the Internet -- up from a few score thousand in 1989. For several years, the Internet grew at a pace of 15 percent per month. p 202
The fatal flaw of Silicon Graphics, 3DO, AT&T, Raynet, Eon, QVC is that they are all trying to solve the problems of the telephone, TV, video game, and consumer appliance companies. But the problems of these separate industries are unsolvable in the face of the integrating sweep of the computer-networking industry juggernaut. TV problem-solving just distracts computer firms from their huge, and hugely demanding, opportunity to usurp phones, TVs, and video game players entirely with multimedia PCs and networks. The huge telecom and consumer firms must be enlisted in their true role: supplying networks, peripherals, and programs for the computer industry. p 202
The central message of Life After Television for the film industry is that the new technologies are targeted directly at Hollywood. Today some 70 percent of the costs of a film go to distribution and advertising. In every industry -- from retailing to insurance -- the key impact of the computer-networking revolution is to collapse the costs of distribution and remove the middlemen. In an information industry such as the movie business, distribution costs will predictably plummet. p 203
Anyone with access to the information highway will be able to distribute a film at a tiny fraction of current costs. Moreover, webs of glass and light will free the producer from the burden of creating a product that can attract miscellaneous audiences to theaters. Instead producers will be able to reach equally large but more specialized audiences dispersed around the globe. Rather than making lowest-common-denominator appeals to the masses, film-makers will be able to appeal to the special interests, ambitions, and curiosities of individuals anywhere, anytime. p 204
Just as digital desktop publishing equipment unleashed thousands of new text publishing companies, so the new digital desktop video publishing will unleash thousands of new filmmakers. The video business will increasingly resemble not the current film business, in which output is a hundred or so movies a year, but the book business, in which some 55,000 new hardcover titles are published annually in the U.S. alone. After all, scores of thousands of screenplays are already written every year. In the next decade, thousands of screenwriters will be able to make and distribute their own films. p 204
Hollywood, meanwhile, will move toward providing enhanced experiences through virtual reality and other expensive technologies. [i.e. ride-films such as Back to the Future: The Ride at Universal Theme Park in Orlando] pp 204-205
Leading any list of companies that grasp this reality are Apple and Intel. Both have made large strides in the past year toward the overthrow of the establishments of consumer electronics, telephony, and television. p 206
Apple: Mac TV and QuickTime MPEG video at 30 frames a second on a Mac Quadra. p 207.
Intel is still more fiercely focused on the prize. As Grove says, "The PC is it. That sums up Intel's business plan and rallying cry." Scorning the obsession with set-top boxes elsewhere in the industry, he explains: "The PC is already in 30 percent of the nation's homes. How long will it be before these new set-top boxes are in 30 percent of homes? And what will PC's be doing by then? p 209
"The PC is not any one thing. It is a continuing phenomenon and every couple of years its definition changes. The Intel goal is to make sure that the living organism of the PC evolves in the right direction to continue as the dominant interactive appliance in both home and business. The PC is not a fixed product but a continuum. p 209
"By contrast, the set-top box won't have the volume, the installed base, the software, or the adaptability of the PC. By the time they get all the necessary functions into the set-top box at the right price point, the PC will be controlling the TV as a mere peripheral." p 209
Grove's warning is exactly on target. Bruce Ryon, Dataquest's chief multimedia analyst, observes: "If you talk to the cable set-top box guys, they are all saying that they are not going to get to the price points they need until three to five years out." Three to five more years of Moore's Law and the PC will be a multimedia machine with some eight times the power and storage capacity at the same price that brought nearly 50 million sales in 1993 and according to Kleskin promises to bring some 55 million unit sales in 1994. At this pace, within four or five years, PC penetration into homes will pass 60 percent. p 209
Virtually all these PCs will be connected to networks -- most of them with 10 megabits per second or more of bandwidth -- and most will run internal buses (linking processors to memory and display) at rates of close to a billion bits a second, ample for full-motion video. p 209.
As Grove points out, "Infinite processing power will only get you so far with limited bandwidth. But the computer era of nearly free bandwidth will liberate the computer to fulfill its powers. Just as the 1980s saw the demolition of the vertical structure of the computer industry, so the 1990s will see the demolition of the vertical structure of the communications industry." p 210.
It is companies that shun the PC today in order to cater to the TV, consumer electronics, and telephone industries that will end up in luxury backwaters. They will resemble companies catering to the mainframe trade early this decade, or the horse business early this century. They may find exotic or intriguing niches. But just as the real action was not at Churchill Downs or the Peapack Hunt Club, but in Detroit, the real action today -- the source of wealth and power -- is not at Nintendo or Sega, Sony or QVC; it is in the scores of thousands of computer and software companies comprising the industrial fabric of the information age -- the exhilarating new life after television. p 216
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