Chapter 6 6. Great changes in the industry/bit market without bits, there is no future

I consider myself an extremist when it comes to anticipating and instigating change.Even so, when the change is about technology, regulations, and the development of new service industries, things move faster than I can imagine—apparently there is no speed limit on the electronic highway.It's a bit like driving on the highway at 160 kilometers per hour.I just figured out how fast I was going when, whoop, a Mercedes sped past, then another, and then a third sped away.Wow! They must be going 120 mph.Such is life in the fast lane of the information superhighway. While the pace of change is faster than ever, it is no longer the transistor that drives the pace of innovation.Instead of scientific breakthroughs like microprocessors or fiber optics, new applications like mobile computing, global networking and multimedia.This is partly because the cost of assembly equipment for modern chips is staggeringly high, and it is very necessary to consume all the computing power and storage capacity in the chip in various new applications; at the same time, it is also based on the fact that many areas of hardware development , we are already very close to the physical limit.

The fact that light waves travel: a foot takes about a billionth of a second is unlikely to change.As we make computer chips smaller and smaller, they may speed up a bit, but to make big breakthroughs in the overall power of computers, new solutions must be devised, for example, to allow many machines to run simultaneously.Currently, major changes in computing and telecommunications are at the application level, rooted in basic human needs rather than basic materials science.Wall Street is taking notice, too. Recently, Bob Luck, acclaimed author and engineer and vice president for applied research at Belcor Corporation (formerly the only research arm of the seven small Bell corporations), noted that he no longer relies on reading academic publication, to stay abreast of the latest technological developments, instead turn to the Wall Street Journal.If you want to see the future of the "bit" industry, one of the best ways is to extend the tripod of the telescope into the corporate, commercial and regulatory departments of the United States, on the New York Stock Exchange, the American Stock Exchange and the National Securities Exchange The automatic quotation watch system of the Chamber of Commerce and Industry is plugged in.

When QVC and Viacom scrambled to buy Paramount, analysts declared that the winners would also be the losers.Yes, Paramount, financially has plummeted since Wellcome proposed to it, but even so, it's still Wellcome's sweetheart because it now has a wider variety of bits, whether it's Sumner. Both Riddstone (Vicone) and Barry Diller (Paramount) know that if your company only makes one kind of bit, your company is in jeopardy. Paramount's story is about bits. , has nothing to do with the self-esteem of the bosses. A large part of the value of a bit depends on whether it can be reused.From this point of view, Mickey Mouse Bits are probably worth a lot more than Forrest Gump Bits... Mickey Mouse Bits will even come in popsicle form (becoming consumable atoms).What's even more interesting is that every hour there are more than 12,500 new lives growing the camp of Disney's (Dlsney) loyal audience. In 1994, Disney's market value was $2 billion, far more than Bell Atlantic, even though the latter's sales were 50% higher than Disney's and its profits were twice as large.

Shipping Bits Shipping bits is a worse business than the airline industry, which is mired in price-cutting competition.The telecommunications industry is so regulated: Nynex can only install phone booths in the shadiest corners of Brooklyn, New York City (Brooklyn), which have a lifespan of only 48 hours, while unregulated competitors can put Phone booths are located along bustling Fifth and Park Avenues, and even in the lounges of Aero Clubs. To make matters worse, the entire pricing system in the telecom industry is about to unravel.Today's communication costs are determined by the time of communication, the length of distance or the number of bits, all three standards will soon become empty standards.The existing system is under the impact of various extreme situations in time (from 1 microsecond to 1 day), distance (from 1 foot to 5 miles), and bits (from 1 bit to 20 billion bits). crack.In the past, when the differences were not so extreme, the system worked well.When you use a 9600 bps modem, the communication time will be shorter than a 2400 bps modem, so you can pay 75% less.But who cares the difference?

However, now that the reach has expanded, we do care about the cost gap.Using time as an example, do I have to believe that I should pay the same amount for two hours of movies as for 30 different 4-minute phone calls, regardless of transfer speed and bit count?If I can send a fax at a rate of 1.25 million bits per second, is the fee I need to pay really only 1/125 of the current fax price?If I'm streaming audio at 16,000 bps over a movie channel on ADSSL, do I really only have to pay 5 cents for a two-hour call?If my mother-in-law comes home from the hospital with a remotely monitored pacemaker that must use an open line to the hospital so that the hospital monitors a few randomly placed bits per hour, we can calculate like 12 billion Is it billed for such bits as the transmission cost of the bits?Try to figure out the business model and see!

We have to develop a smarter approach.This approach may not consider time, distance or number of bits as the main variables and tariffs.Perhaps everyone should be given free bandwidth.We pay for movies, remote health monitoring devices, and files on a value-for-money basis, not including the delivery channel.It would be unreasonable to base the selling price of toys on the basis of the number of atoms contained in them.Now is the time to take a good look at what bits and atoms represent. It is definitely not in the best interest of shareholders if the management of a telecommunications company confines the company's long-term strategy to shipping bits.The right to own bits or use bits, as well as greatly increase the added value of bits, must be part of the company's long-term strategy.Otherwise, revenue growth would not be possible, and the phone company would be doomed.

Because, in this industry, telephone service is rapidly becoming a commodity, whose prices are falling due to fierce competition and increasing bandwidth. When I was growing up, everyone hated the phone company (as an adult, I put insurance companies at the top of my list). In the 1950s, almost every child had some tricks to defraud the telephone company in their stomachs. Everyone regarded it as an adventure game and never tired of it.Today, the cable companies have the honor of being the new target, because many cable companies have poor service and keep raising prices.To make matters worse, they're not "public transporters," and these guys control what goes on the line.

Because cable TV was originally intended to perform a variety of community services, the cable industry enjoyed the benefits of an unregulated monopoly.It was only when cable TV operators began to combine and develop into national networks that people noticed that these companies really controlled not only the telecommunication channels, but also the content of the distribution.Unlike the telephone company, it is not obligated to provide a "right-of-way" except for local and community services. Regulation of the telephone industry is based on a simple principle: Everyone has the right to use telephone lines.However, if the broadband system is closer to today's cable TV.If the system is used instead of the telephone network, then the situation becomes ambiguous.If they were given a chance to choose, would the channel owners welcome the owners of program content without regard to the principle of fairness?The U.S. Congress is deeply disturbed by this.If you own both the channel and the content of the broadcast, can you still maintain a detached position?

In other words, if AT&T merged with Walt Disney, wouldn't it be cheaper for kids to watch Disney's Mickey Mouse cartoons than Bugs Bunny cartoons?With whom? In the autumn of 1993, when Bell Atlantic Corporation agreed to buy the cable TV giant telecommunications company for US$21.4 billion, scholars who studied the "information superhighway" regarded it as an important signal: the digital age has really arrived!This merger seems to be a ribbon-cutting ceremony. However, this purchase is not only based on the logic of relevant laws and regulations, but also violates common sense.Telephone and cable TV have always been rivals, regulations rule out the possibility of running both types of business at the same time, and ring and star networks are even more incompatible.The level of investment alone is jaw-dropping.

Four months later, when Bell Atlantic's deal with the telecommunications company fell through, the pendulum swung to the other extreme, and a new argument emerged: the failure of the merger would delay the construction of the information superhighway.The digital age suddenly seemed far away again.The stock price of the telecommunications company fell by 30%, and other related companies also suffered.The celebratory champagne had to be poured back into the bottle. But my point is that this is not such a serious disaster.In fact, Bell Atlantic's agreement with the telecommunications company is one of the least interesting corporate mergers ever made.It's a bit like two suppliers selling different sizes of water pipe decide to merge their catalogs.This acquisition has nothing to do with the combination of deep distribution channels and content.The combination of channel and content means that bit production and bit transmission are integrated. In 1994, the Walt Disney Company and Hollywood King Michael Ovitz each formed an alliance with three regional telephone companies, which is more interesting.

The consumer electronics industry has been trying to ally itself with entertainment companies.In principle, this is a powerful idea, but so far, there have been few examples of coordinated success due to various cultural differences.When Sony bought CBS Records (CBS Records) and then Columbia Pictures, there was an uproar in the United States.Like the change of ownership of Rockefeller Center, the Japanese throwing money at it has sparked a debate about whether the nation's cultural heritage has come under foreign control not only in symbol but also in actual form.When Panasonic bought MCA shortly thereafter, the Americans were even more shocked, because the chairman of MCA, Lew Wasserman, was, in many people's minds, the most representative corporate leader of American style.I still remember, when I visited MCA corporate headquarters after the first oil crisis, seeing a piece of paper taped to the elevator buttons with Wasserman's words: "For your health and your country, go up one flight of stairs, or down two flights of stairs." These acquisitions created a huge cultural divide, not just between Americans and Japanese, It is also between engineers and artists.None of the companies the Japanese have bought so far have been successful, and I doubt they will be. Cultural Fusion There are well-acknowledged differences between technology and the humanities, science and the arts, right brain and left brain, no matter how much of that difference is artificial.The nascent multimedia is likely to bridge these fields, as some disciplines, such as architecture, do. Television was invented purely due to a technological push.When pioneers like Ferro Farnsworth and Vladimir Zvorkin ordered electronic images the size of postage stamps in 1929, they were driven by purely the value of the technology itself to find ways to improve it.While Zwolkin had some naive ideas about the use of television in his early years, he was greatly disappointed in his later years. Former MIT President Jerome Weissner once told a story.Weissner is a close friend of President Kennedy and once served as the president's science adviser.One Saturday, Zwolkin visited him at the White House. He asked Zwolkin if he had seen the president, and Zwolkin said no.So Weissner took him across the hall to meet the president.When Weissner introduced the guests to the president, he said that this was "the man who got you elected president."Kennedy was very surprised and asked: "How to say?" Weissner explained: "This is the person who invented television." Kennedy said that this is really a great achievement.Zvorkin asked him, "Have you watched TV lately?" The needs of technology - and only those needs - drove the development of television.Television was then handed over to a group of creative geniuses who differed from scientists in both values ​​and intellectual subcultural contexts. Photography, on the other hand, was invented by photographers.Those who improve the technique of photography, for the purpose of artistic expression, constantly refine the technique to meet the requirements of this art.It's as if writers created romance novels, essays, and comics to express different ideas. The personal computer has moved computer science away from purely technical requirements and onto the same path of development as photography.Computing is no longer the preserve of armies, governments, and big business.It is being passed directly into the hands of highly creative individuals at all levels of society, where it is used and developed as a vehicle for their creative expression.Multimedia means and messages will combine technological and artistic achievements, driven by people's demand for consumer products. Today's fastest Intel processors run at 100 million instructions per second.Compare that with Sony, which has just launched a new $200 video game "Game Station" that can run at 1,000 MIPS.What's going on here?The answer is simple: Our seemingly insatiable hunger for new types of entertainment, and the new real-time, three-dimensional games on which the video game industry depends, demand this kind of high-speed processing and new displays.Applications become the driving force.Pull and Push Media giants like Weicom, the News Corporation, and the publisher of this book all rely on mastering distribution networks to add value to their information and entertainment content.As I said earlier, the transmission of atoms is much more complicated than that of bits, so it needs to rely on the power of large companies.By contrast, moving bits is so simple that in principle no big corporations are needed.It's almost certain. Through reading the "New York Times", I got to know John Markov, a reporter for the newspaper who specialized in reporting on the computer and communications industries, and admired his articles very much.In the past, if it weren't for The New York Times, I might never have seen his articles.However, it is different now.I can easily use the computer network to automatically collect all his latest reports and throw it into my personalized newspaper or in the "suggested reading" profile file.I might be willing to pay Markov "two cents" per article (twocetlts) for this. If 0.5% of the Internet population in 1995 were willing to subscribe to Markov's articles like this, and Markov wrote 100 articles a year (in fact, he wrote about 120-140 articles a year) , then he can make a steady income of $1 million a year, which I dare say is higher than what the New York Times pays him.If you think 0.5% is too high, wait patiently.This number will be true.Once someone takes control of the situation, the added value of the sender in the digital world will go from bad to worse. The sending and movement of bits must also involve filtering and filtering.The media company acts, among other things, as a talent scout, and its distribution channel becomes a testing ground for public opinion.But at a certain point, the author may no longer need this forum.In the digital age, Michael Clayton will definitely earn more by selling books directly on the electronic network than through publishers.Knopf Press, sorry! Digitization will change the nature of mass media, and the process of "pushing" bits to people will become a process of allowing people (or their computers) to "pull" the bits they want.This is a drastic change, because our whole concept of media is to reduce information and entertainment into a set after layers of filtering: "highlights" or "bestsellers", and then throw them to different "audiences".While media companies, like magazines, are moving more and more toward "narrowcasting," they're also marketing bits to special-interest groups like car gamers, alpine skiers, or wine guzzlers.I recently came up with the idea of ​​doing a magazine for insomniacs and cleverly advertising it on late-night TV when it was cheap. The information industry will become more like the clothing industry.The global information highway is its vast market, and its customers are the public and their computer agents.Does this digital marketplace really exist?The answer is yes, but this market will only really emerge when we improve the interface between humans and computers so that talking to a computer is as easy as talking to a human.