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The Public-Access Computer Systems Review
Volume 3, Number 8 (1992) ISSN 1048-6542
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CONTENTS
COMMUNICATIONS
The New Publishing: Technology's Impact on the Publishing
Industry Over the Next Decade
By Gregory J. E. Rawlins (pp. 5-63)
To retrieve these files: GET RAWLINS1 PRV3N8 F=MAIL
GET RAWLINS2 PRV3N8 F=MAIL
This report discusses technology's impact on the products,
revenue sources, and distribution channels of the publishing
industry over the next decade. It examines the threats and
opportunities facing the book publishing industry, and presents a
strategy for publishers to meet the threats and to use the
opportunities to decrease risk and increase profit. The strategy
also benefits education, science, and technology by making books
cheaper, more flexible, and more easily and quickly available.
1.0 Overview
1.1 Electronic Books and Copy Protection
1.2 Subscription Publishers
2.0 Threats to Contemporary Publishing
2.1 Paper Copying
2.2 Electronic Copying
2.3 The Future of Copyright
3.0 Electronic Book Advantages
3.1 Reader Advantages
3.2 Library Advantages
3.3 Publisher Advantages
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4.0 Retailing Schemes
4.1 Disc Bookstores
4.2 Electronic Bookstores
4.3 On-Demand Bookstores
4.4 Locked-Disc Publishers
4.5 The Future of Retail Books
5.0 Changes in Education
5.1 Electronic Science Books
5.2 Other Educational Books
5.3 The Frailties of Print
6.0 The New Publishing
6.1 Mapmakers, Ferrets, and Filters
6.2 Stage I Penetration
6.3 Stage II Penetration
6.4 Stage III Penetration
7.0 Gearing Up
7.1 A New View of Economics
7.2 Why It Will Work
7.3 A New View of Publishing
8.0 Getting There From Here
8.1 The Short Term
8.2 The Mid Term
8.3 The Long Term
9.0 Pricing, Positioning, and Profits
9.1 Lures to Subscribe
9.2 Global Publishers
9.3 Competition
9.4 Entrepreneurs
10.0 Technological Hammers
Appendix A. Electronic Book Technology
Appendix B. Electronic Book Players
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The Public-Access Computer Systems Review
Editor-in-Chief
Charles W. Bailey, Jr.
University Libraries
University of Houston
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Editorial Board
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George H. Brett II, Clearinghouse for Networked Information
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Steve Cisler, Apple
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Lorcan Dempsey, University of Bath
Nancy Evans, Pennsylvania State University, Ogontz
Charles Hildreth, University of Washington
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Clifford Lynch, Division of Library Automation,
University of California
David R. McDonald, Tufts University
R. Bruce Miller, University of California, San Diego
Paul Evan Peters, Coalition for Networked Information
Mike Ridley, University of Waterloo
Peggy Seiden, Skidmore College
Peter Stone, University of Sussex
John E. Ulmschneider, North Carolina State University
Publication Information
Published on an irregular basis by the University Libraries,
University of Houston. Technical support is provided by the
Information Technology Division, University of Houston.
Circulation: 5,090 subscribers in 47 countries (PACS-L) and 770
subscribers in 37 countries (PACS-P).
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Back issues are available from LISTSERV@UHUPVM1 (BITNET) or
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Rawlins, Gregory J. E. "The New Publishing: Technology's Impact
on the Publishing Industry Over the Next Decade." The Public-
Access Computer Systems Review 3, no. 8 (1992): 5-63. To
retrieve this article, send the following two e-mail messages to
LISTSERV@UHUPVM1 or LISTSERV@UHUPVM1.UH.EDU: GET RAWLINS1 PRV3N8
F=MAIL and GET RAWLINS2 PRV3N8 F=MAIL.
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Abstract
This report discusses technology's impact on the products,
revenue sources, and distribution channels of the publishing
industry over the next decade. It examines the threats and
opportunities facing the book publishing industry, and presents a
strategy for publishers to meet the threats and to use the
opportunities to decrease risk and increase profit. The strategy
also benefits education, science, and technology by making books
cheaper, more flexible, and more easily and quickly available.
1.0 Overview
You can count how many seeds are in the apple, but not how
many apples are in the seed. Ken Kesey.
Over the past two decades printing, paper, and transportation
costs rose while their electronic counterparts--computing,
electronic storage, and communication costs--halved roughly every
four years. Both trends are expected to continue for at least
two more decades. [1]
The last time something this radical happened was in the
15th century when the printing press used the newly available
cheap paper to take over the manuscript market, throw scribes out
of work, and explosively increase the number of available books.
Print led to pagination, indices, and bibliographies since
they were now possible and they made searching easier. And that
forced people to learn the alphabet so that they could use the
new indices. Print increased literacy, democratized knowledge,
increased accuracy, made fiction possible, made propaganda
possible, created public libraries, and created the idea of
authorship.
Print also decreased the importance of memories--and their
main possessors, the elders; loosened the hold of the Church and
led to the Reformation; added fuel to the Humanist movement and
led to the Renaissance by putting classical authors back in
print; increased education, science, and technology transfer; and
created publishers.
Electronic books may bring changes of similar magnitude.
+ Page 6 +
1.1 Electronic Books and Copy Protection
Today we can scan a printed book into electronic form, then
distribute it over the phone in minutes to hundreds of people at
pennies a copy. Further, we can produce books electronically
without ever committing them to paper. Finally, we can augment
electronic books to include sound, motion pictures, and automatic
cross-referencing. Electronic books can be easier to distribute,
less expensive, less risky, more powerful, more flexible, more
immediate, and easier to search and collate. They can also be
interactive, changeable, and adaptive.
For these reasons, and others detailed in this report,
electronic books will become a large part of the book market
within the decade. And that will make it harder for publishers
to ensure that their increasingly expensive books are not
illegally copied.
Traditionally, publishers and authors have used copyright
and the courts to protect their investment. So the natural way
for publishers to adapt to the new technology is to copy protect
their books, as software publishers and video producers first
tried, and recording artists are still trying, to protect their
products. Copy protection is like putting a lock on each copy
then selling a key with each locked book.
Protections on marketable intellectual properties try to
equate intellectual properties, like this report, with tangible
properties, like ham sandwiches, or rights on tangible
properties, like franchises, licenses, water rights, stock
futures, or airline routes. Because of their artificiality, it
could be said that copy protection merely feeds lawyers and
annoys legitimate users. Whether that position is defensible,
copy protection certainly adds expense and works against easy
searching and collating. So for educators, scientists, and
technologists it would be desirable to avoid it, if possible.
The information in books is freely accessible; this ease of
information exchange makes civilization go. But paper books are
not easy to search, cross-reference, index, collate by multiple
subjects, or carry in bulk. It will increase information
distribution, and benefit education, science, and technology, if
there was some way for publishers to make their books cheap,
electronic, and not copy protected. That would keep the freedom
of paper while increasing searchability and availability.
+ Page 7 +
1.2 Subscription Publishers
Publishers can accomplish all the above aims by becoming
subscription services, charging subscribers a small monthly fee
for the ability to get any of their books electronically over the
phone, at a small cost per book. Among other business advantages
detailed later in this report, such publishers are immune from
pirates.
These publishers can also benefit education and science.
Further, they may speed up technology transfer from the research
lab to the factory floor. Both education and science flourish
when information is easily and widely available, and easy to
distribute, compare, refine, search, and collate. The
subscription scheme can make marketable information cheap, easily
available electronically, and easily translatable from one
electronic medium to another.
And publishing will cost less, so more people can become
publishers, thereby increasing title diversity. More diversity
seems necessary when 2 percent of all publishers produce about 75
percent of all U.S. book titles and when the three largest
bookstore chains generate about 40 percent of all retail
bookstore revenue. [2] The U.S. now has about 6,500 independent
bookstores and the top three chains own about 2,750 outlets.
More publishers would increase title diversity leaving the
market to decide which are good--as is true on the electronic
network, but not in print. When everything is committed to paper
the few can control what the many can read by controlling the
bottleneck--the printer. That is like letting Kodak control the
movie industry since it produces the most film.
The electronic network is the equivalent of the road system
today. Instead of killing trees, printing books, loading a
truck, train, plane, or ship with crates of books, expending oil
and human labor to transport them to various retailers, polluting
the environment, and taking days to do so, any book can be sent
on demand directly from the publisher to any reader in the world
in seconds. This is also true for any other information--movies,
software, music, television shows, or radio shows.
Books can be more easily distributed if they were
electronic, and publishers can profit without copy protecting
their books. The scheme makes books cheaper both to publishers
and to readers, reduces the risks of publishing, and increases
publisher profit. It works by shifting the publishing emphasis
from betting that one particular title will be a bestseller to
maintaining many readers of at least one title.
+ Page 8 +
In a decade, publishers will be back to doing what they do
today. Once the novelty of electronic books wears off,
publishers will again compete to ensure that their product is
better designed, better packaged, and better promoted than that
of their competitors. But because of the coming economic
dislocation, in the intervening decade unprepared publishers may
fail.
This report examines the threats to contemporary publishing,
describes the advantages that are forcing it into existence, and
presents a way for publishers to succeed in the new publishing.
It concentrates on possible electronic formats, revenue sources,
and distribution channels of the publishing industry. And it
briefly mentions changes in the publishing process itself, and
governmental, geopolitical, economic, legal, and social changes
brought on by the new milieu. It is biased toward the interests
of scientists, technologists, and educators.
2.0 Threats to Contemporary Publishing
The race is not always to the swift, nor the battle to the
strong, but that's the way to bet. Damon Runyon.
Because of the costs of paper publishing and publisher
assumptions about how to make books return a profit, a 500-page
textbook typically costs $50 retail, or 10 cents a page. Second-
hand it costs $25, or 5 cents a page. On a large copier it costs
$15, or 3 cents a page. On a large printer it costs $5, or 1
cent a page. If it were distributed electronically, it would
cost about $1 to send it to any phone in the world, at a cost of
1/5 cent a page. And whether it is an excellent or a terrible
book does not change these cost differences.
2.1 Paper Copying
The short-term threat is that fast high-resolution color copying
technology is now so cheap that enforceable copyright is becoming
a thing of the past. Publishers will not face threats from large
copy stores because they are a large enough target that they can
be sued, but now individuals can afford personal copiers. For
example, the Canon PC-311 costs $400. And this is not an
industry that is about to disappear; worldwide, the copying
industry now sells $14 billion worth of equipment, of which Canon
alone accounts for $3.5 billion. [3]
+ Page 9 +
Worse, copiers are going to get smaller and cheaper.
Electronic storage costs have dropped so low versus printing
costs that a copier can be merely a scanner with a capacious
memory. Such a copier could be palm-sized--it would be
attachable to a separate computer or printer. Because electronic
storage is now so cheap, it is no longer necessary to print pages
when the original is scanned.
Over the past two decades the cost of a short ton of
newsprint has gone from $150 to $550. It is not that paper has
become an insupportably expensive medium overnight, but
electronic storage cost has plummeted so much that paper's cost
has skyrocketed.
Imagine a world of small cheap personal copiers, where you
can rent, then copy, expensive paper books just as you can rent
music, software, or movies today. Imagine a world where one
student in a class buys a copy of a textbook, then copies it for
all the others. Imagine a world where publishers in Pacific Rim
and Middle Eastern countries buy one copy of a book then sell
duplicates just above the duplicating cost.
2.2 Electronic Copying
The copying problem will grow even worse as books become
electronic because copying electronic information is easier than
paper copying, and it can be done without human labor. Once
books are electronic then at some point the book must be decoded
for the user to read. At this point it can be copied.
Perfectly. Further, this copy's cost, being equivalent to the
cost of the storage needed to hold the copy, is effectively zero.
Finally, once a copy is made, both copies can be used at the same
time; where there was once one copy there are now two separate
and perfect copies.
Even if publishers try to avoid electronic copying by
staying with paper, readers could scan their paper books into
electronic form.
There are ways to copy protect electronic media in the short
term (a year or so at a time), but they are soon broken by
pirates. So there is an escalating copy protection cost.
Further, copy protection is odious to some and may not gain wide
acceptance for something as fundamental as a book. Finally, if
books continue to cost more than it costs to copy them, then
publishers and authors will always lose money to pirates.
+ Page 10 +
Authors and publishers use copyright to protect their
investment of time, creativity, and capital, but that protection
is eroding rapidly. There is no long-term copy protection scheme
suitable for marketable electronic books; the user can always
scan the book and copy it perfectly. It will merely take longer
to make the first copy.
Some publishers may price their books so high that they will
profit even if only a few copies are sold. Today, some
publishers charge libraries high prices on the principle that
many people use a book at a library. But if publishers try
either copy protection or high prices, or copy protection to
enforce high prices, a breed of intellectual terrorists may
arise, who will break their copy protection and anonymously
distribute unprotected copies for free along the electronic
networks (for example, see the NuPrometheus league discussed in
Branscomb). [4] And millions of people are reachable
electronically. Of course, such a market also encourages
pirates.
The problems facing the publishing industry seem
insurmountable, if publishing proceeds as it does today except
that books are electronic instead of on paper. But with a new
view of publishing the apparently severe problems become
opportunities. The only viable long-term solution is for
publishers to make book buying cheaper or more convenient than
book copying, as it used to be five years ago. Publishers can do
so if they keep a stable number of captive readers and amortize
costs over their entire list.
2.3 The Future of Copyright
As happened in the music industry, the software industry, the
television industry, and the movie industry, publishers will have
to adapt to the new technology. Like every other business, it is
natural for publishers to want to continue to operate as they
have done in the past. But they may not be able to. Once a few
publishers take advantage of the technology, other publishers may
be forced to comply. As has happened in the most staid of all
industries--banking.
In 1977, Citibank's share of retail deposits was 4.7
percent. Citibank realized that it could increase market share
by reducing its unit costs; revenues would increase if it could
attract many more low-balance customers. Citibank invested at
least $250 million to deploy roughly 500 automatic teller
machines (ATMs). By 1982, it had more than doubled its market
share, and its share continued to rise by about 1 percent a year
since 1983. By 1990, its share of the retail market was 14.7
percent--triple its 1977 share. [5]
+ Page 11 +
In 1983, eight other banks banded together to meet the
threat and formed NYCE (New York Cash Exchange). By 1988, NYCE
was the second largest shared ATM network in the world, trailing
only France's Carte Bleue. Today it alone provides instant 24-
hour service to over 11 million cardholders, who can use over
6,000 ATMs owned by 360 banks in 22 states. Many new bank
branches are merely a series of ATMs set into a wall, with no
tellers at all. Today a bank's ATM network is not a competitive
advantage, it is an economic necessity.
Information is not the same as tangible goods; it can be
copied almost instantly over enormous distances, with no trace,
no loss in fidelity, and, potentially, no loss in value. This is
true for pictures, designs, music, movies, software, and books.
In the information economy, the ability to read something is
inextricably bound up with the ability to copy it. When a few
million people have the means of duplication in their hands
copyright may exist as an idea, but it will be unenforceable
between publishers and the public. Today no one is arrested for
making personal copies of audiotapes or videotapes, even though
that principle has never been tested in court. [6] We could
control illegal drugs easily if they had to enter the country
through a few large depots.
But avoiding copy protection does not mean giving up
copyright, particularly since the new technology allows abuses of
copyright between authors and publishers and between publishers
and retailers. That was not possible when production and
distribution were so expensive that they were solely in the hands
of publishers, and publishers had to be large companies just to
be publishers. In those days, authors could always sue their
publishers, and authors could not cheaply distribute their own
works. But now that production and distribution are affordable
by individuals, and growing ever cheaper, cases will eventually
arise of publishers hiding sales from their authors, of retailers
hiding sales from their publishers, of publishers selling
independent of their retailers, and of authors selling
independent of their publishers.
However, the subscription scheme is immune from attack
because it makes book buying cheaper and more convenient than
book copying. To see why it can work, imagine that someone
invents a programmable matter transformer that can produce food
from sand. Now imagine that the technology is so cheap that
everyone can own one. It would then be foolish to try to sell
food. But you can still sell recipes. And the same would be
true of pharmaceuticals, jet engines, or microprocessors, only
the producers and consumers change.
+ Page 12 +
What will make consumers come back for more? The promise of
more delicious recipes. The next section discusses what will
make those recipes delicious.
3.0 Electronic Book Advantages
To describe the evolutions in the dance of the gods . . .
without visual models would be labor spent in vain. Plato,
The Timaeus.
The advantages of printed books as a medium of information
storage and exchange are that they are robust, they need zero
power, several can be open at once, they have been around for 550
years, all literate people know how to use them, and they are
readable in strong sunlight.
Their disadvantages are that illiterate people cannot use
them, it is easier to print an electronic book than it is to
digitize a printed book, and it is hard to collate non-sequential
but related parts of one book, or many books by several subjects.
Further, they do not talk, adapt to their readers, or have
animated illustrations or music. They do not let readers zoom or
pan illustrations, or increase or decrease their font size, nor
do they recognize voice commands or visual cues. Finally, they
are not cheap, long lasting, easily copied, quickly acquired,
easily searched, or portable in bulk.
Paper will be with us for decades to come because of the
hundreds of years of technological development behind simple,
cheap, light, detachable pieces of paper, and the complementary
use of hand and eye to arrange, read, or write them. It will be
many decades before another piece of technology called virtual
reality (not discussed in this report) eclipses paper. But
because of their advantages to readers, libraries, educators,
publishers, and retailers, in a decade electronic books will be a
significant part of the market. About all that can be said of
paper books is that they are lighter than clay tablets, less
awkward than papyrus rolls, and cheaper than parchment codices.
+ Page 13 +
3.1 Reader Advantages
When books are electronic, readers can have instant and
unsleeping access, as in banking. Also, readers can have instant
updates and revisions, and electronic contact with all other
readers of each book, thereby sharing ideas and reactions more
rapidly and with more people. For publishers this means that
word of mouth can sell more books more quickly. Further,
electronic books need not go out of print. And electronic books
are cheaper and less bulky than paper books. Instead of several
expensive books, where although each one is portable, large
numbers are not, thousands of books can be stored on one small
light disc, at 8 cents a book.
Making books electronic makes them computer readable, so
books can contain electronic bookmarks and cross-referencing.
Cross-referencing can be either reader controlled or computer
generated. And all the advantages of paper books--handwritten
annotation, highlighting with colored markers, underlining, post-
it notes, bookmarks--can be allowed through software on small
portable pen-based computers (for example, see Phillips). [7]
Also, books can be customizable by, or for, their readers; a
copy of a book need no longer be an exact copy--as has already
happened in consumer-targeted advertising. Because the
information economy is computer-based and global, with
concomitant increased knowledge of consumer tastes and increased
competition, it will become increasingly lifestyle-targeted.
Unlike paper books, electronic books can be multimedia:
letting us mix voice, music, color, motion pictures, data, and
text, and leading to animated talking books. For example, the
Xerox/Kurzweil Personal Reader can read the text of any book out
loud--an invaluable aid to the blind, sight-impaired, illiterate,
or busy--it is unnecessary to first record an actor reading the
book. [8] The Personal Reader trains itself on any printed text
and gets better as it progresses down the first page. It can
read six languages.
A program called NETtalk [9] can be used to produce a
children's book that is really a whole library of children's
books. The book listens to the child (or parent) reading aloud
for a few hours until it can read any of its repertoire of books
in that voice.
Imagine children's books that read themselves to a child at
bedtime. By listening to the child's breathing, the book can
reduce its volume, dim the lights, and slow its cadence as the
child drops off to sleep. This can be done today.
+ Page 14 +
3.2 Library Advantages
Electronic books mean that libraries need not keep large and
expensive stores of bulky and decaying paper. Libraries can
shrink from large warehouses to small rooms. And catalogs can be
electronic, electronically updatable, and computer generatable,
making them easier, faster, and cheaper to search, produce, and
update. Libraries will not need to buy multiple copies to allow
for book scuffing or book destruction. Nor will they need
binderies to bind journals or magazines into volumes, or to
rebind old books. Nor will they need shelvers. Also, the
library can more easily refer readers to other books with similar
subjects, tastes, or interests.
Libraries will not need to chemically treat their decaying
books, microfilm them, or transcribe them to Braille, large-
print, or audio. All transformations are easier with electronic
books. Currently, the Library of Congress can afford to
transcribe only 2,000 new books and 1,000 new periodicals a year.
Out of its 20 million books, it carries only 30,000 in alternate
formats.
3.3 Publisher Advantages
Contemporary publishing is risky business. Because of the
economics of paper printing and distribution, titles have to be
produced in large print runs to make it profitable to sell them.
But there is no guarantee that a book will sell its print run.
Large print runs mean that much capital is tied up in
product for a long time. So less capital is available to buy new
titles or to promote current ones. It further means large
transportation, warehousing, security, insurance, and
distribution costs. And all the people who do this have to be
paid salaries, workers compensation, and pensions.
But small print runs mean risking running out of stock and
losing customers to competing titles because of delay. Further,
because printing costs drop sharply with volume, many small print
runs are unprofitable.
Even if demand could be predicted exactly and even if titles
could reach readers as soon as they are printed, printing alone
adds four to six weeks to product delivery. And unless product
is mailed express at greater cost, the post office adds a further
two to three weeks. Finally, even if warehousing and capital
costs are zero, product cannot be kept awaiting demand
indefinitely since it is bulky and it physically decays in a few
years.
+ Page 15 +
Because of these constraints imposed by committing books to
a fixed medium (here paper, but similar things would be true of
discs), publishing proceeds by guess and by gosh.
Publishers let retailers return unsold copies to increase
the chance that retailers can afford to carry their titles.
Sometimes as much as half of a mass-market fiction print run of
500,000 copies is returned. But with electronic distribution,
outlets will not have to keep as many copies of each title as
they think they can sell; they need only one for promotional use.
And that will increase the diversity of titles outlets can offer.
Eventually, distribution costs to publishers could drop to zero
since readers could acquire product rather than publishers
supplying it.
Further, when distribution is electronic, used-textbook
stores go out of business. Currently, a textbook may sell 10,000
copies in the first year, 5,000 copies in the second year, then
2,000 in the third year. The original 10,000 market is still
there, but it is being serviced by used copies. The used
bookstores are piggybacking on the publisher's and author's
investment of time, capital, and creativity. Electronic
distribution eliminates that opportunity since the most recent
version can be available instantly and cheaply.
Going to electronic books and electronic distribution of
them on demand means no printing and its costly consequences:
warehousing, transportation, delay, back-ordering; competing for
scarce outlet shelf space; overestimating demand and having to
remainder or destroy books; underestimating demand and having to
lose business or annoy customers; and sinking large amounts of
capital into paper copies that take time to sell, that take up
shelf space, that decay on the shelf, that may be returned after
sale, and that if sold then fuel the used book market.
Production would become editing, reviewing, and developing
acceptable projects. Printing and distribution will cost little.
And there will be more resources available for acquisition and
marketing. Finally, in the subscription scheme publishers will
have large stable incomes over a period of years, thereby making
it easier to attract venture capital for start up or expansion,
making planning easier, and reducing risk.
+ Page 16 +
4.0 Retailing Schemes
First secure an independent income and then practice virtue.
Greek proverb.
Today, retailers must risk almost as much as publishers. Most
bookstores carry anywhere from 1 to 1,000 copies of each title,
depending on expected demand. All but one are redundant.
Electronic media let retailers choose a melange of distribution
schemes to reduce risk and increase profit.
4.1 Disc Bookstores
From a standing start in 1984, compact discs overtook phonograph
records in five years. Paper books will put up more of a fight
because of inertia and because it will take time for adequate
display technology to reach many people. But it is inevitable.
In seven years, some bookstores will become half compact
disc stores, thereby quadrupling the number of titles per meter
of shelf space, but otherwise keeping many of the ills of paper
publishing since retailers will still have to order as many
copies of each title as they think they can sell.
This will take seven years or more to allow for the time
needed to scan most of the books that exist only on paper and to
allow for cultural inertia and technophobia; some people will
dislike the idea of electronic books. But once a book exists in
at least one electronic form, it is easy to print it if
necessary, convert it to another electronic form, or distribute
it electronically. Electronic books contain paper books as a
special case.
4.2 Electronic Bookstores
In seven to ten years, some bookstores will disappear into the
woodwork. These bookstores may become just wall-sized display
screens electronically displaying an array of titles, with
pictures. Each title may be in its own book-sized rectangle of
the display. Customers could use their electronic pens to wand
the appropriate title(s) and have it automatically delivered to
their portable or home computer and their credit card
automatically charged. To allow browsing, perhaps a part of the
book is downloaded to the portable first (reviews, description,
sample pages, and a list of previous books written), and the sale
goes through if the customer does not discard the preview after
half an hour.
+ Page 17 +
Major book chains like Waldenbooks, B. Dalton
Booksellers/Barnes & Noble, Crown, Coles, Waterstones, and W. H.
Smith's would love such a system. They would love it so much
that they may become publishers themselves. They would have
little space to rent, no staff salaries, no stock, no
warehousing, no transportation, no remainders, no returns, no
overhead, no need to reshelve books, no need to discard scuffed
books, and no need to insure against fire, theft, or water
damage. Further, it is easy to reorganize the display, and the
display operates continuously.
These bookstores are interactive billboards. Retailers
could put them anywhere people congregate (bus stops, church
yards, and playgrounds) and even on vehicles (buses, trains,
planes, and ships).
When books are electronically distributed, a publisher (or
retailer) can produce catalogs that are really databases with a
front-end program to help customers query the catalog. The top
level display might be a menu of all the subjects the publisher
(or retailer) groups their books by. Customers move through the
catalog searching for books they want, and can immediately
receive them (and pay for them).
Such a catalog would also be cheaper than print. A typical
64-page print catalog destroys trees and costs over $2 per
catalog, a disc version for several apparel companies costs $1.28
per disc, including production and mailing. [10]
The catalog can instantly reflect demand for each title.
The Italian apparel company Benetton uses its worldwide system to
determine the demand for each fabric, and what color it should be
dyed for the next week's fashions. Benetton has drastically
reduced both inventory and lost sales. The publisher (or
licensed retailer) can print some fraction of the demand for each
title to service the paper trade. The electronic service acts as
a market sample, giving a more accurate estimate of demand than
today's print run system.
4.3 On-Demand Bookstores
Electronic books are more flexible than paper books. For readers
not comfortable with electronic systems, there will still exist
bookstores similar to those existing today, but these bookstores
can carry hundreds more titles than they can carry today because
they need only one copy of each. Customers can browse through
this copy as they do today, then have an electronic copy
delivered to them if they decide to buy.
+ Page 18 +
For example, to cater to those customers who dislike
electronic distribution or lack display technology, publishers
can license their list to retailers and have them produce paper
books in the retail outlet on demand. The Kodak Lionheart 1392
costs $199,000 and prints 92 two-sided 300 dots per inch (dpi)
pages a minute; the Xerox DocuTech Production Publisher costs
$220,000 and prints 135 two-sided 600 dpi pages a minute--it can
also collate, saddle stitch, and cover the documents. [11]
If these prices are too high for one publisher or retailer a
consortium of publishers could buy (or lease) printers with each
retailer. These on-demand retailers will save on most of the
costs of contemporary retailers, so publishers may be justified
in charging high licensing fees.
This practice may persist, but since electronic books will
grow out of the linear text-and-pictures format (it is
restrictive and no longer necessary), these customers will be
getting only the flat form of the book. Further, licensing also
works if the retailer produces books on disc, not paper. So
another possible distribution scheme is book dispenser machines
like movie dispenser machines or ATMs, where the user inserts a
disc, has books downloaded to it, and pays for the downloaded
books with a credit card. [12]
4.4 Locked-Disc Publishers
Another way to distribute electronic books is for publishers to
put their entire list on a single disc. Publishers can encrypt
each title separately so knowing the decrypt key for a title
unlocks that title only. Encryption is different from copy
protection; copy protection tries to make information physically
uncopyable, encryption tries to make information unintelligible
without a key. One tries to lock the hardware, the other tries
to lock the software. Both try to deny general access.
These discs can be produced in runs of several thousand at
$1 per disc and could be sold for $5 each. As in the
subscription scheme, publishers could bypass retailers entirely
and sell these discs by mail order. And retailers could increase
title diversity by many thousands; even the smallest retailer
could carry every book ever written since each publisher only
needs one disc. After buying a disc, a reader who wants a
particular title phones the publisher, and the publisher gives
the title's decrypt key then charges the reader's credit card.
Such a scheme is already being tried by font and clip-art
companies. [13]
+ Page 19 +
State of the art encryption schemes are virtually
unbreakable, but once one reader pays for the decrypt key for a
particular title that reader could tell the rest of the world.
So publishers may divide the print run into lots of 100, number
the discs, and change all encrypt keys from one run to the next.
This will increase disc production costs and users would have to
supply the disc lot number when ordering. As with any protection
scheme, cost increases and usability decreases.
Many publishers may choose this scheme since it is most like
their present system, but better. Further, each title is
protected so publishers could increase prices if they choose.
But this scheme, and every other scheme that distributes books on
fixed media, has the problems discussed in the overview and in
the previous section.
4.5 The Future of Retail Books
In the short term, publishers and retailers may promote their
wares direct to readers through media like cable television, the
postal service, and online services, and later, the reader's
portable or home computer. But the need to announce new books
could eventually fade if readers can do their own searching for
books that they may be interested in. Eventually their portable
or home computer could do the searching for them--continuously,
perhaps storing a backlog of books to be considered.
Electronic books are inherently more plastic than paper
books. A decade hence many distribution schemes may coexist:
normal paper publishers, locked or unlocked single-title disc
publishers, on-demand disc or paper publishers, prerecorded full-
list locked-disc publishers, and subscription publishers.
5.0 Changes in Education
A book is a machine to think with. I. A. Richards,
Principles of Literary Criticism.
It is curious that in a supposedly highly literate society a U.S.
hardcover is one of the top 25 bestsellers for the year if it
manages to sell only 115,000 copies--about 1/20th of 1 percent of
the population. Gone With the Wind sold 21 million copies over
40 years, but 55 million people saw the first half of the
television movie. [14] Roots sold 5 million copies over 8 years,
but 130 million people watched 8 episodes of the television
version. The television shows A-Team and Dallas drew 40 and 37
million viewers per episode.
+ Page 20 +
The U.S. has an estimated 13 million illiterate adults.
Since talking books de-emphasize literacy, they may move us
closer to preliterate societies and help to enfranchise the
illiterate, the dyslexic, the blind, the sight-impaired, the
disabled, the elderly, and the young. For publishers, this means
that sales could be higher.
Many believe that the U.S. is facing serious education
problems. Every year 700,000 high-school students drop out,
while another 700,000 graduate unable to read; the percentage of
graduating high-school students has dropped every year since
1984. [15] The social problems causing the drop out rate are
serious and severe and most are unrelated to books, so electronic
books are no cure-all, but they may help reverse the trend.
5.1 Electronic Science Books
Eventually all books will become animated, vocal, and
interactive. Imagine learning orbital mechanics like a video
game where you may choose burn rate and burn time, then have the
book show you what happens to the rocket. Imagine a chemistry
book that lets you bring together different molecules and watch
what the van der Waals forces do to them, following through until
the molecules reach a stable state. Imagine a biology book that
takes you inside a working cell; the book lets you see cell parts
in operation and shows what any part does either normally or
under disease.
Imagine a statistics book that dispenses with artificial
measures like averages and standard deviations and gives the full
data visually. Imagine a mathematics book that lets you to
choose your own parameters for functions and visually shows you
what happens to their derivatives, or lets you dispense with
simplistic models entirely and directly work with simulations.
IBM and the U.S. National Science Foundation are funding work by
the Mathematical Association of America to build interactive
mathematics texts over the next two years. [16]
Imagine a physics book where an apparently alive Galileo,
Newton, or Einstein propounds their various theories then guides
you through developments and consequences, letting you ask
questions or suggest alternatives. As technology improves, you
will be able to change Galileo, Newton, or Einstein to whomever
you wish: perhaps a favorite aunt, a teacher, Bugs Bunny, or
Walter Cronkite.
+ Page 21 +
Imagine a computer architecture book that lets you tour a
computer chip. The book first displays a chip as seen by humans
normally--a black fingernail-sized sliver of shiny silicon. The
book has two controls: a joystick and a light-dimmer switch. As
you move the joystick, the book displays the image you would see
if you were at that distance and point of view.
Pressing down on the joystick brings up a quarter-scale
display in the lower right-hand corner with text, voice, or video
of the author explaining what you are seeing, and telling you
about other things that you might like to see if the current view
interests you. Touching any portion of the screen also pops up a
little window to explain whatever is being displayed at that
place on the screen. The dimmer switch controls the time scale;
twisting it changes the speed at which things happen.
As your viewpoint gets nearer to the surface of the chip,
the chip expands to cover the entire display, then the horizon
disappears off the screen. As you get closer to the surface, you
begin to see pulsating rivers of light representing electron
flows, and you hear a susurrus of sound representing thermal
noise, which later grows to a keening roar as you approach a
river of light. Getting closer to the chip surface and reducing
the time scale you can see individual clumps of electrons
switching through individual gates. The sound has also slowed,
so you can hear each electron whizzing by. Getting even closer
and further slowing the time scale shows a single electron about
to tunnel out of a channel.
This tour book idea works for any physical construct,
natural or artificial. We could have tour books for trees, fire
extinguishers, DNA, motor boats, lungs, car engines, eyes,
televisions, humming birds, space shuttles, whales, or
cyclotrons. More expensive versions of these books could
dispense with the joystick and dimmer switch and instead accept
simple vocal commands: stop, go, faster, slower, zoom here, pan,
undo, reverse, put this there, what is this, show me more, tell
me why.
+ Page 22 +
5.2 Other Educational Books
By 2000, the U.S. Geological Survey expects to complete its
national digital cartographic database. This database will
include all the information on the agency's maps, and the agency
is working with the U.S. Census Bureau to integrate demographic
data. [17] Meanwhile, Geovision is selling a U.S. atlas on disc
for $600; on this disc users can zoom down to a city block. And
SilverPlatter is selling a three-disc set for $2,000; the discs
list over 115 million people living in 80 million residences in
the U.S. (Early in 1991, a similar set promoted by Lotus and
Equifax was withdrawn after a blizzard of protest over privacy
issues.)
Imagine an atlas that opens with a rotating globe. (Or an
atlas that begins with a rotating human, library, computer, solar
system, house, car, scanning tunneling microscope, or nuclear
power plant.) You learn about different parts of the globe by
touching it. You can then find out about the geography, history,
geology, climatology, politics, culture, demographics, or
economics of each area. Touching economics might bring up
overlays showing trading partners, trade routes, and goods.
Touching any trade good, from tractors to camcorders, leads to
overlays giving the source of all the raw materials used to make
the good.
Touching a portion of the display gives the history of the
region, its geological background, its demographics, its
transportation system, its climatology, its political allies, its
nearness to major fault lines, its chlorofluorocarbon emission
rate, its projected development over the next five years, its
skin cancer rate over the past ten years and projections for the
next ten assuming various levels of ozone depletion.
Touching another portion lets you extrapolate land use and
deforestation over time to examine the effect of tariffs, or the
effect of waste heat from cities on fish populations, or the
effect of power lines on bird migratory paths, or the effect of
global warming on coastlines and industries. Touching yet
another portion gives pictures of the region's Nobel prize
winners, with their accomplishments and acceptance speeches. Or
pictures of the region's politicians. Or a breakdown of the
region's gross national product decomposed into budgetary
expenditures. Or the effect of solar wind on the region's
satellite reconnaissance. Or the region's offshore natural gas
deposits. Or the epidemiology of retroviral disease. All
portions of the display could be accompanied by movie snippets,
stills, and music.
+ Page 23 +
5.3 The Frailties of Print
An electronic book can be more accurate, more powerful, more
flexible, more informative, more usable, more timely, more
sophisticated, and more adaptable to its user than any number of
paper books. Today an author has to first think of the
questions, research the answers, and find a way to summarize them
in print. With electronic books the user poses the questions--
questions perhaps even the author did not think of--the book
researches the answers--research perhaps almost as good as the
author's own--and the user decides how the information is to be
displayed.
And the same observations hold for books on music, politics,
painting, craftwork, foreign languages, history, zoology,
architecture, geography, design, cooking, hairstyling, self
defense, travel, health, environmental studies, or any other
subject. These books could increase comprehension, retention,
and emotional response without sacrificing convenience,
adjustability, repeatability, searchability, generality, and
abstractability the way that broadcast television does. And
because they are built on top of computers with their great power
for simulation they also add interactivity, testability,
convertability, and projectability.
These books can combine the best aspects of human visual and
auditory presentations, the best aspects of broadcast television,
the best aspects of computers, and the best aspects of print.
Compared to such books, present books are pitiful.
Of course, not all electronic books will be well written;
there will still be poor books and good books--and perhaps in the
same proportion. But even the worst electronic book could be
better than the best paper book, if only because it may be more
easily searched to see if it has anything useful. But, as
always, the sharper the tool, the deeper the cut. Because these
books are more immediate, they can shape our unconscious more
deeply; so bad books could be more dangerous, just as a
demagogue's speech is more compelling than the text of the
speech.
Reading is work, but before writing there was speech,
sounds, and sights. We have had only 5,300 years to get used to
writing, but we have had millions of years to hone our
audiovisual response. Humans are good at interpreting and
relating to audiovisual cues--particularly if they are in control
and can stop, replay, or interact with the action at any time.
Such books will change the way we think, the way we work, and the
way we see ourselves, our artifacts, our governments, and our
world. Every business, every industry, every vocation, every
profession, every educational institution, and every
entertainment group, can use these books to advantage.
+ Page 24 +
Students with books like these are exploring, not reading.
Curiosity motivates them to explore and develop intuition. They
are not intimidated by premature formalism, nor by the artificial
linearity authors are forced to place on a subject just to fit it
into the unnatural format of a paper book. The difference
between these books and paper books is the difference between
behavior and the description of behavior.
Textbooks can move toward this ideal even within the
confines of paper. They can try to: involve the student through
many questions; deformalize the subject until absolutely
necessary through an informal style, cartoons, and many pictures;
show links among different parts of the book through continuous
and exact page referencing; show links among different parts of
the subject through many annotated references; humanize the
author, the book, and the subject through many quotes, quips, and
jokes; and encourage reader exploration.
6.0 The New Publishing
Lead us, Evolution, lead us,
Up the future's endless stair;
Chop us, change us, prod us, weed us.
For stagnation is despair.
C. S. Lewis, "Evolutionary Hymn."
From here on this report focusses on publishers who charge a
monthly fee and who distribute their titles on demand over the
phone. The criteria for judging subscription publishers will be
capital, reputation, and performance. Capital acquires new
product and its amount and liquidity determines credit, which
determines how much expansion there can be, and how fast it can
take place. Reputation and performance assure subscribers of
quality and selection, and attract and retain new authors and
subscribers.
Marketing will also be important. At 3,500 new books a
month and climbing, major book chains and convenience outlets
(convenience stores, drugstores, and supermarkets) now keep new
fiction less than six weeks. Soon paperback fiction may be
monthly--the equivalent of one-shot magazines; eventually
turnover may be weekly.
To pervert Toffler's prediction in Future Shock, [18] in a
decade we will be living in a world of future schlock; 1,000 new
books a day is possible, that is only a factor of eight from
today. Counting all nations, we already produce over 1,000 new
books a day.
+ Page 25 +
6.1 Mapmakers, Ferrets, and Filters
As the number of books published per day mushrooms, the value of
the publisher's editors and their reputation will increase. The
publisher functions as a stamp of approval, a selector, and a
collator. Soon there will be a whole new profession--people who
find things, or know who to ask--perhaps they will be called
ferrets. For those who want to rummage for themselves, there
will be another new profession--people who arrange things--
perhaps they will be called mapmakers. And everyone will need
people who select things--perhaps they will be called filters.
These three professions mirror the three basic aids in
nonfiction books--indices (ferreting), tables of contents
(mapmaking), and bibliographies (filtering)--and the three basic
uses of computers--searching (ferreting), sorting (mapmaking),
and selecting (filtering). All three are marketable services.
Publishers may try to enter all three markets, but unless
they enter them understanding their importance they may be shut
out by more aggressive third-party companies. Eventually they
will also have to compete with computer programs. Word
processors like WordPerfect, spreadsheets like Lotus 1-2-3, and
database programs like dBase are the three biggest reasons
business adopted personal computers. In ten years, ferrets,
mapmakers, and filters may be the equivalent of these programs
today.
As computer power becomes more widespread, each user's
computer may run hundreds of ferret programs continuously, all
separately exploring the world's data for useful information.
When a ferret returns it may have to face dozens of filters who
try to prevent them from adding the data found to the user's
personal information base. Data that enough filters judge to be
important or relevant is passed to the mapmaker to be linked into
the user's personal map of what's important, where it is, and how
it relates to other information in the personal map.
Human beings often use different archival schemes than
print. Librarians are fond of telling horror stories of naive
library users who ask for the large green book on cartoons they
flipped through a month before. But weight, size, smell, and
color of a book are noticed easily, while title, author,
International Standard Book Number, Dewey decimal number, and
Library of Congress number are artificially imposed because they
make easier search keys in traditional databases. The ferret,
filter, and mapmaker programs will benefit those who want to
recall the blue book with the funny picture of President Bush
that Joe lent them.
+ Page 26 +
To most Americans, the 20 million books in the Library of
Congress, perhaps the nation's greatest intellectual resource,
are less useful than a home encyclopedia, because the information
retrieval problem bars access. As books become electronic,
indices, commentaries, databases, annotations, bibliographies,
reviews, concordances, compendia, and selections will be in high
demand. The more data there is, the less information there is;
the more information there is, the less knowledge there is.
To take a household example, partly because they are on
paper the Yellow Pages function poorly. To get the most from
them, the user must understand exactly how the phone company
organized them. The user must also have a detailed map, a subway
guide, bus routes, Consumer Reports, the local Better Business
Bureau Report, and plenty of time.
In addition to an alphabetical listing by type of business,
Yellow Pages should list all businesses on each street, in each
neighborhood, and in each mall; by the time needed to get to them
from the user's current location; by their relation to various
landmarks; by whether they are currently having a sale; by
whether they accept checks, cash, or credit; by their hours of
operation; by their nearness to restaurants, gas stations, public
restrooms, or other stores the user cares about; and by their
expensiveness, reliability, revenue, experience, and returns
policy.
All these ways of organization are possible with electronic
Yellow Pages, and that applies to every other kind of
information. And businesses would pay the mapmaker to be
included, just as they pay credit card companies today, since it
means more business for them. Only five percent of the roughly
6.5 million U.S. businesses advertise outside the Yellow Pages.
6.2 Stage I Penetration
The new technology will first take over technical, professional,
and business knowledge databases, and technical, scientific, and
academic journals for doctors, lawyers, executives, financial
analysts, dentists, scientists, engineers, technicians, and the
professoriate. These people have the need, the money, the
expertise, and the technical infrastructure to support the
technological thrust in the early days.
+ Page 27 +
Already MathReviews exists on disc and it is an enormous
improvement over paper. In 1990, researchers had to wade through
several heavy 1,000-page books full of fine print, imperfectly
indexed and cross-referenced by humans, and out of date because
of the delay. In 1991, these same researchers could search the
entire corpus of published papers--including abstracts, reviews,
comments, and other information not previously included in
MathReviews because of bulk--for arbitrary patterns in seconds.
They no longer even have to go to the library, they can
access it remotely from their home computers. And they no longer
have to use the service during library hours; they can access it
at any time. Further, the library no longer has to find space
for many years worth of 1,000-page MathReviews; they have to keep
only one or two small discs. Finally, the discs are cheaper than
the books they replace. Eventually libraries will not even have
to buy the discs since a few cheap computers could supply the
same information over the phone to the entire world.
Soon universities will start publishing their own electronic
journals. Already publications of the American Chemical Society,
the American Mathematical Society, the American Psychological
Association, the Association for Computing Machinery, the
Institute of Electrical and Electronics Engineers, McGraw-Hill,
and Elsevier Science Publishers, are available electronically.
[19] The European Economic Community and the U.S. Office of
Technology Assessment are sponsoring future projects. [20]
Already the Harvard Business Review is available
electronically (there is still a paper version), and the American
Association for the Advancement of Science is publishing the
Online Journal of Current Clinical Trials. Academic libraries
will clamor for electronic versions of all journals, even if
publishers also produce paper versions. Currently, university
libraries have to devote increasing amounts of shelf space and
over half their budgets to journals. The number of academic
journals is doubling every five years, and subscription costs,
already high, continue to rise by ten percent every year.
Full-color professional magazines charge advertisers to pay
authors, publish ten to twelve times a year, and cost consumers
$4 to $6 per issue. Black-and-white academic journals charge
authors to pay printers, publish four to six times a year, and
cost libraries $25 to $400 per issue. Electronic journals would
be cheaper for everyone: publishers, libraries, and readers.
They would also be easier to archive, catalog, and search, less
bulky, more flexible, more expandable, timelier, and larger than
paper journals.
+ Page 28 +
The business community is even more ready to pay a lot for
precious information. In most corporations, middle management
plays the part of ferrets, mapmakers, and filters for senior
management. But paper reports are hard to search, index,
compare, and collate. Further, once a fact, a table, a report,
is committed to paper it is fixed; it cannot be displayed in
alternate and perhaps more accessible forms, like histograms, pie
charts, and graphs. A table listing country populations
alphabetically by country is hard to use when we want to know the
top 50 populations.
In 1986, GTE executives could not easily find information in
their own 200-page financial reports. GTE spent six weeks and
$14,000 to create an Apple HyperCard system that let executives
keep informed about their own business. [21] Ideally, hypertext
should let users chart their own course through the data; text
versus hypertext is like taking a train versus driving a car.
Soon after GTE adopted the system, its president demanded all
reports this way instead of formal presentations from middle
management.
Dow Jones charges $19,600 a year for its CD/Newsline
subscription service: monthly mailings of discs containing public
information about the financial performance of various companies.
[22] Dow Vision delivers news and market information direct to
users' computers for $1,000 a month. [23] Perhaps they get away
with these prices because of the business community's ignorance
of what is possible and what it costs to attain, and the
publishing industry's ignorance of the demand for timely, high-
quality, and electronically-accessible product.
6.3 Stage II Penetration
The new technology will then take over general information
sources: dictionaries, multilingual dictionaries, dictionaries of
quotations, encyclopedias, atlases, almanacs, thesauri,
concordances, phrase books, tourist guides, repair manuals, phone
books, cookbooks, collections of statistics, stock prices,
speeches, operas, paintings, sculptures, magazines, census
information, and library and museum catalogs.
Already the catalog of the Library of Congress, The Readers'
Guide to Periodical Literature, The Oxford English Dictionary,
and Books in Print (at $1,000 a year; with book reviews--
something unthinkable with paper--it is $1,400 a year), are all
available on disc. There are now 1,400 titles available on
compact disc.
+ Page 29 +
The Voyager Company, ABC News Interactive, and Warner New
Media, Incorporated are all producing titles solely for the new
media. For example, in August 1991 the top ten bestsellers (with
some prices) were: Grolier's Electronic Encyclopedia ($400), The
Magazine Rack, The Multimedia World Fact Book, The Microsoft
Bookshelf ($300), U.S. History on CD-ROM, National Geographic's
Mammals, The PC-SIG Library ($500), The Reference Library,
McGraw-Hill's Encyclopedia of Science and Technology, and
Compton's Multimedia Encyclopedia ($900).
Grolier's Encyclopedia contains 10 million words and 1,500
pictures; what used to take 21 large books now takes just 1/5th
of one small disc. Compton's Encyclopedia contains 8,784,000
words; 5,200 articles; 15,800 photos, maps, and diagrams; 60
minutes of recorded voices and sounds; 45 animated sequences;
Webster's Intermediate Dictionary (which itself has 65,000
entries); and a word processing program.
Then the new technology will take over textbooks and all
other technical and professional books. Electronically
distributing textbooks could eliminate printing, packaging,
distribution, transportation, postal delay, possible returns,
warehousing costs, and the used textbook industry. And it
reduces both the risk and span of time of having capital tied up
during the distribution process.
6.4 Stage III Penetration
Finally, since electronic books can be interactive, animated, and
vocal they could make serious inroads on fiction. Software
publishers like Broderbund, Voyager, Discis, and Software Mart
and computer/entertainment companies like Sony, Philips-PolyGram,
Britannica Software, Rand-McNally, and Time-Life are seizing the
high ground here, perhaps because traditional publishers lack the
expertise or are not aware of the market.
In October 1991, Voyager introduced interactive forms of
Douglas Adams' Hitchhiker's Guide to the Galaxy, Michael
Crichton's Jurassic Park, and The Annotated Alice in Wonderland,
at $19.95 each. These are the first three of Voyager's planned
20 Expanded Book series. Broderbund's Living Books series are
animated children's books scheduled for early 1992 release, the
first three are: Mercer Meyer's Just Grandma and Me, Jack
Perlutski's New Kid on the Block, and Marc Brown's Arthur's
Teacher Troubles, at $49.95 each.
+ Page 30 +
7.0 Gearing Up
All mankind is divided into three classes: those that are
immovable, those that are movable, and those that move.
Arab proverb.
Publishers who are wondering how they can keep things the same
are asking the wrong question. In a rapidly changing
environment, the most important asset is not the present
inventory of skills, but how fast it is improving. Education and
flexibility are essential when what you sell, how you sell it,
who you sell it to, and what they want, are all changing.
7.1 A New View of Economics
Classical economic theory is largely irrelevant to the early
stages of a new information industry. Economics assumes that
resources are finite and that there is enough time for markets to
reach stability. [24] Three things are wrong with this picture:
information is not finite, there is no single stable point--there
are many, and there is little time to reach stability before
there is another major change.
Standard economics applies to finite-resource markets like
agriculture, mining, utilities, and bulk-goods. Such economics
has little to say about information markets like communications,
computers, pharmaceuticals, and bioengineering. These markets
require a large initial investment for design and tooling, but
enormous price reductions with increasing market growth. This
growth is further compounded by positive feedback: with
increasing market growth the production process gets more
efficient, therefore returns increase.
And that growth increases both the number of people
attracted to work on the remaining problems, and the number of
people desiring the improved products. Which in turn fuels the
development of better products. For example, the more people
with facsimile (fax) machines, the more people who wanted fax
machines to talk to those who already had them, and the more
people who had them, the more people who worked to improve them.
Finally, this exponential improvement is being applied to a
group of synergistic technologies; each improvement in one
technology improves other technologies in the group, which in
turn help improve the original technology. For example, better
computers improve communications, which improves science and
engineering, which improves instruments, which improves
computers.
+ Page 31 +
Most U.S. firms seem to see the world in the order:
shareholder, supplier, shopper, staff, society. This order
reflects a world where capital is the most important thing, and
it works well in a stable industrial economy. But in a rapidly
changing industry, placing investors first can lead to short-
sighted financial cannibalism. Instead, in a fast-changing
market, the priorities should be: shopper, staff, society,
supplier, shareholder. The stock market debacles in October
1987, October 1989, and November 1991 show what happens when
short-term gain is valued more than long-term development.
Fortunately the financial markets matter less and less to the
economy; capital will remain important as a risk softener, but
the thing that has become more important to continuous
improvement is knowledge.
Anyone in an information industry who clings to 19th century
techniques is unlikely to survive long. Today, above all else,
it is necessary to be able to cope with change. Achieving this
will take great care since most people are afraid of computers
and of change.
In light of these observations, publishers should acclimate
their staff using internal training programs, salary incentives
for mastering technology, and an internal electronic
communications network. The biggest asset today is a computer-
literate and interacting staff; such a staff is the best source
of ideas on ways to navigate changes. And while other firms can
quickly reverse-engineer and copy systems, technology, and
products, they cannot quickly copy a well-coordinated, committed,
intellectually stimulated, and productive staff. Paradoxically,
because people can no longer change faster than technology a
productive staff is the linchpin of success.
Equipment is now less important than almost anything else
because of plummeting prices and increasing power, flexibility,
robustness, and reliability. Even though the equipment will be
obsolete in 3 years, spending $3,000 per employee to buy
computers and an office network is money well spent. If everyone
gets one and it is presented as a natural change, it is likely
that staff members can help each other over the initial humps--
and there will be many. Once employees start using their
machines for things as approachable as personal electronic mail
to each other their resistance should decrease.
Publishers should also develop a subdivision of one or two
technical people who gather information about and experiment with
different ways of packaging and distributing electronic books.
The subdivision can also function as a source of technical help
for the rest of the company during the transition period, thereby
partly defraying their salary cost.
+ Page 32 +
7.2 Why It Will Work
The subscription scheme will work because many people already pay
for similar services. Many professionals pay over $100 a year
for each of several subscriptions to professional or academic
organizations. For this money they get quarterly journals and
mild discounts on publications that the organization carries
(plus incidental benefits at conferences and so on). Many
professionals pay lawyers and financial advisors annual retainers
for the ability to call on them whenever they wish.
Many people pay over $100 a month in phone bills, and phone
companies charge $30 or more merely to remain connected.
Similarly, millions of people pay $25 or more a month for the
opportunity to watch movies that a cable company chooses, at
times the cable company chooses. Of course, they offer a huge
stock. Publishers can provide better service by letting readers
choose what they read and when, provide a more long-term benefit
to society by benefitting education, science, and technology,
charge each household less per year to do so, and still make
money.
Further, there are now thousands of bulletin boards and
dozens of online services, of which ten are major companies: BIX,
Dialog, Prodigy, CompuServe, Delphi, Reuters, Dow Jones News
Retrieval, GEnie, SprintMail, and Data-Star. In 1990, online
service sales reached nearly $9 billion, almost double 1986
sales.
BIX, the Byte Information Exchange, offers each month's Byte
magazine and other services; its subscription rate is $39 a
quarter, exclusive of phone connect charges. Dialog gives access
to 390 databases, with over 270 million references to over
100,000 publications, including the complete texts of over 1,000
periodicals. Dialog charges anywhere from $45 to $150 for sign
up and connect charges. Prodigy (run by IBM and Sears) has
almost 1 million subscribers, and charges a $50 sign up cost and
$13 per month. CompuServe has 3/4 million subscribers, and
charges a $40 sign up cost and $6 to $22.50 per hour for
connections. Delphi has 100,000 subscribers, and charges $6 a
month and $20 for 20 connect hours.
Finally, in August 1991 after only 2 1/2 years, Waldenbooks
has 4.4 million U.S. readers in their Preferred Reader Program.
Waldenbooks and B. Dalton Booksellers use their programs to keep
track of book buying, title performance, and reader habits, and
they use the names for their mail order programs. But more can
be done by changing the one-time cost of the card to a yearly fee
and offering larger discounts--in other words, making it a
subscription program.
+ Page 33 +
7.3 A New View of Publishing
Perhaps a publishing by subscription scheme has not occurred
before because a single title can take a long time to develop; so
there is a tendency to think book by book. Only the most
prolific authors could sell their works to the public by
subscription, as Dickens did. But publishers have many authors;
20 or so should be enough to generate a constant supply of new
product. And that makes it worthwhile for the public to
subscribe.
Publishers are more like movie producers than movie
directors. The mistake many early software companies made was to
employ large numbers of programmers. Having to support a large
payroll (and sometimes just greed) forced them to charge high
prices for each copy of their software. Which led to piracy.
Which led to copy protection and higher prices to make up for
revenue lost to pirates. Which led to more piracy. [25]
Software publishers eventually broke this cycle by abandoning
copy protection and adopting a form of subscription publishing;
successful publishers hooked their audience with a promise of
continuous updates for a fee.
Instead of employing authors, the book publishing model is
to encourage free-lance authors to write books, then help develop
the projects, and promote and sell them. But publishers are more
than mere intermediaries; the book industry would not exist at
all without someone amortizing supply on one end and demand on
the other, providing the capital and expertise to develop and
edit titles, and getting titles from supply to demand. In many
ways, subscription publishing is the natural way to be a
publisher--low unit margin but high and stable volume instead of
high unit margin but low and unstable volume.
A large stable number of subscribers each paying a small
amount per book is better than a few incidental buyers of
expensive single copies. The uncertainty caused by emphasis on
single copies is what is wrong with publishing as a business
today. To those who argue that publishing should not be a
business, the answer is that a large stable income frees
publishers to produce quality books.
+ Page 34 +
8.0 Getting There From Here
Even technologies with enormous potential can lie dormant
unless there are significant payoffs along the way to reward
those who pioneer them. John Walker. [26]
Some publishers may fight rather than switch. They may protest
the new technology and push for laws against copying, or for an
electronic book standard that tries to keep book production or
book copying out of the hands of the average person. That is
what happened in the music, software, television, and movie
industries. Fifteenth century scribes and 18th century weavers
tried the same tactics. But just as happened in those other
industries, such publishers will eventually fail. Should it
bother us that pocket calculators wiped out slide rules? Should
we weep because polio vaccines destroyed iron lungs?
In two decades, paper technical books will be the equivalent
of phonograph records today; they will exist for historical,
sentimental, or ceremonial reasons. Eventually they will go the
way of the vacuum tube, which, legend tells us, existed in the
forties and fifties. Of course, after skimming parts of an
electronic book readers may make their own paper copy if they
wish. (A decade ago a high-quality laser printer cost $25,000;
today a good PostScript laser printer costs $1,500.) And for the
wealthy, paper books will still make good furniture.
Those who are twelve and under have no vested interest and
no prior investment in paper technology. The U.S. alone has 30
million electronic game machines; 70 percent of all U.S. homes
with a child aged between eight and twelve have a Nintendo game
machine. [27] And in 1990, Nintendo's net income was $488
million on revenues of $3.34 billion; [28] revenues exceeding
that of the entire U.S. robotics industry. Almost 46 percent of
all U.S. children use a personal computer at home or school.
Almost 14 million homes have a computer--double the figure for
1984. On the other hand, although the U.S. produces 3.5 billion
books a year, an American adult reads an average of 3 books a
year.
Those who are 25 and under are more familiar with television
and computer screens than they are with print. In 1991, they
have had Pac-Man for 10 years, Apple computers for 14 years, and
Sesame Street for 21 years. In a decade, paper technical books
will still be published--it will take perhaps another decade for
them to completely vanish--but the bulk of technical information
production and exchange that today we conduct by printing and
distributing paper books will by then be electronic.
+ Page 35 +
There will be more books, and they will be always in print.
They will be larger, less expensive, easier to get, use, search,
filter, and collate, and updates will be monthly--or perhaps
continuous.
8.1 The Short Term
In the short term (one to three years), the subdivision should
first target executives, professionals, and technicians. They
have the money and the motivation to support expensive early
experiments. This phase will not generate much capital since the
experiments and the learning process will be expensive.
During this first phase publishers should start trying to
put their authors under long-term contract, just as Hollywood
studios kept their actors in the thirties to fifties. Failing
that, publishers must attract and maintain a stable source of new
product--which means more emphasis on new product acquisition.
Only with constant title turnover will they keep their
readership.
Publishers should also renegotiate their author contracts to
allow for electronic distribution. Putnam and Berkley have
already adapted their contracts to keep electronic display
rights. [29] Through ignorance of the market and the technology,
Random House sold the electronic display rights for its
dictionary and other references for a mere $10,000 plus 10
percent of the royalties. [30] Random House expected to make
$40,000 (this was the lower cap in the contract). They made over
a million dollars.
8.2 The Mid Term
In the mid term (three to five years), the electronic subdivision
should target schools, universities, corporations, states, and
other large organizations to accept subsets of their electronic
catalog at small cost per book, but at large cost per catalog.
These organizations will serve as suitable testing grounds for
the new techniques on a large scale. This stage will also make
for word-of-mouth advertising.
+ Page 36 +
Large organizations will not allow wholesale copying for
fear of lawsuits and public embarrassment. It is easy to ensure
that by inserting hard to find identifying tags in the particular
version of the books they receive; so if excessive copying is
suspected there is a way to prove that a particular copy was made
from the files the publisher supplied to the organization. To be
able to insert these tags the subdivision needs to develop, or at
least have a say in, the software used to display books; and that
will happen only if the publisher is one of the first of the new
publishers. This phase should generate a fair amount of capital
that can then be plowed into development for the final phase.
At this stage, publishers can work out ways to divide the
income; the royalty system may have to change. With so many
dollars coming in every year (or quarter, month, or day,
depending on which is the better business policy), nonfiction
publishers can afford to pay authors an advance the same way
fiction houses do now, then keep track of demand for their work
crediting them for any accesses of their work by any subscriber.
Or publishers can buy titles on consignment. Or capital-heavy
publishers can buy a work outright.
Other arrangements are possible, for example, capital-light
publishers can ask authors to pay for the privilege of being put
on their list, as vanity presses do today. In this scheme,
authors bet that the demand for their work, once it is widely
available, will outweigh their capital outlay; a better system
than the present one if authors have the capital. Since the
publisher's marginal distribution cost is near zero the publisher
risks little. To avoid simple frauds later when an author can
also be a subscriber, each subscriber's electronic connection can
be recorded and publishers can require them to identify
themselves to gain access.
8.3 The Long Term
In the long term (five to ten years), publishers should get out
of anything to do with milling, producing, printing,
transporting, warehousing, or distributing paper. Which fits in
well with current antagonism to deforestation. Publishers with
heavy investments in paper and printing will be hit hard.
Publishers should develop computer expertise within their
electronic subdivision, or form an alliance with a computer firm.
Then they should gradually grow their subdivision to take over
the backlist of the rest of the company.
+ Page 37 +
9.0 Pricing, Positioning, and Profits
What we must decide is perhaps how we are valuable, rather
than how valuable we are. Scott Fitzgerald, The Crack-Up.
At this point such publishers have become general subscription
services acquiring, developing, packaging, and distributing
intellectual property just as publishers do now, but with higher
profit and lower risk. With a captive reader base of 50,000,
such a publisher can charge subscribers only $10 to $20 a month,
and still gross $6 to $12 million a year. And, except for
salaries and royalties, every cost and risk of contemporary
publishing will be near zero.
These all-you-can-read publishers charge $120 a year, but
the subscriber can then get any number of books, each for $1.
The $10 subscription rate and $1 book rate are not based on
market surveys or sensitivity analyses. Prestige, niche, and
designer-label publishers may be able to get away with more than
$20 a month. Or perhaps they should leave the subscription rate
at $10 a month, but charge $5 per book.
As fear of scientific and economic non-competitiveness grows
in the U.S., the fastest growing domestic book market may be
electronic educational books for the 5 to 20 age group. This
market may easily bear $20 a month subscription charges.
Publishers should split their list into subgroups based on
expected readership for each grouping. That will let them charge
different amounts for each sublist. They should also offer
packages of the whole list for those willing to pay more for the
full service. Finally, they should offer the general public a
per use cost that is higher per book than the subscription price
per book, so that there is incentive to become, and remain, a
subscriber either to the whole list or to some subset of it.
That encourages subscription and lets people who do not want the
whole service get just one or a few books.
As long as publishers charge roughly as much as it costs to
copy a book they will not have serious piracy loss. It is even
reasonable to charge triple the copying costs, since they can be
more convenient suppliers than pirates, but more than quintuple
the copying cost may lead to serious piracy. Publishers should
resist the temptation to charge a lot per book; they should not
try to make each book necessarily pay for itself immediately.
They should resist the lure of historical precedent and avoid
charging subscribers by the book.
+ Page 38 +
It is better if they charge a flat rate for access to their
entire list. If the flat rate is low, subscribers will not ask
themselves which titles they should get. In the subscription
scheme, publishers' attractiveness to subscribers is their list--
how many good books they carry, not what proportion of good books
they carry. When their lists are fully electronic, with the
concomitant near-zero marginal cost to distribute a copy of any
title, it is not relevant if some of their titles are not big
sellers--they cost nothing to keep, they can be kept forever, and
they cost almost nothing to distribute if demand ever rises.
9.1 Lures to Subscribe
Each title is valuable if it is eventually responsible for
gaining its publisher more subscribers; even difficult books that
no one ever reads are useful, if they add luster to the list. In
general, publishers will be able to support more authors and a
wider variety of specialty topics.
Publishers can encourage more people to subscribe by
reducing subscription rates as people subscribe. Since computers
will be doing the distribution and billing, there is no reason
for a fixed rate per subscriber. Since overhead is now largely
fixed and marginal costs are near zero, publishers could let
subscription rates drop as enrollments rise.
Unfortunately, if enrollments drop, rates rise, which could
lead to more dropping enrollments, and so on. Perhaps
subscription rates should start higher than that necessary for
comfortable profit, then drop to the precalculated floor level as
enrollments rise. Even if that idea is ruled out, publishers
should let heavy readers pay less per book on the principle that
subscribers who buy many books will remain subscribers longer
than those who do not buy heavily. Today, publishers have no way
to give preference to the very people they should be targeting
most.
The point is for publishers to keep subscription costs low
and to increase readership as much as possible, but only to a
level that can be maintained indefinitely. After start up, their
marginal cost to add a new subscriber will be effectively zero,
yet each new subscriber pays the same.
+ Page 39 +
9.2 Global Publishers
Electronic publishers can become international without having to
develop overseas bases. It is trivial to transport information
cheaply and distance does not matter; geography is irrelevant in
the information economy and only language and culture differences
still separate nations.
At this point, governments will start worrying about
taxation, export controls, and tariffs--but these are irrelevant
since unenforceable. The state can no longer control its
population by controlling access. Cutting off international
calls would have drastic economic and social consequences. Even
if the state were to disallow international calls there would
still be satellites and radio. We are already irrevocably
committed to the information economy.
Publishers can reduce the risk of ten thousand simultaneous
requests by increasing the distribution sites and by charging
different amounts to service requests at different times of day
(local time), thereby evening out calls per hour. Further, each
distribution site is merely a phone line and a small special-
purpose computer--at most a few thousand dollars of equipment--
which easily pays for itself if it supports a few dozen more
subscribers.
The technology supporting the system would already have been
deployed and paid for in the previous five-year span, so the only
cost will be the ongoing one of service expansion, service
upgrading, and product distribution. Distribution should cost
almost nothing since subscribers pay phone connect cost. Billing
can be automatic just as electricity, phone, gas, cable,
newspaper, and magazine subscriptions are now.
9.3 Competition
No one will copy and try to sell a product if anyone anywhere can
instantly get the same service plus continuous updates for 33
cents a day. When any one copy of a book has a marginal price of
$1, pirates are irrelevant and publishers will not need to copy
protect their books. There are only so many books a human being
can read in a lifetime, so there is no need to worry that every
subscriber will demand many titles; once the initial flurry of
excitement dies down, demand should average less than ten titles
per subscriber per month. There will be far greater demand for
ferreting, mapmaking, and filtering.
+ Page 40 +
Later on, publishers should tailor their books to specific
groups of subscribers, based on information supplied by
subscribers about their tastes and interests. Even later,
publishers should tailor down to individual subscribers. Such
publishers will then be immune from pirates producing uniform
copies of one version of each book. Few would buy off the shelf
clothes if tailor-made clothes were as cheap and as available.
Further, the new publishers should not sell their
subscription list; their greatest danger will come from
electronic publishers with competing titles. Selling them the
subscription list is begging for them to compete; they should be
made to pay to develop their list in the same way that the first
of the new publishers did. Since they come in later, they are
already at a disadvantage and it should be straightforward for
the early publishers to keep their edge.
On the other hand, this goes against the desirability of
letting subscribers know who other subscribers are, which in turn
curtails interaction among subgroups interested in particular
topics. Publishers may not see this as a business advantage, but
one of the biggest sellers of books is word of mouth. The
benefits of identifying special interest groups and fostering a
community may outweigh the liabilities of letting other
publishers get their subscription list. These are some of the
questions that the subdivision has to answer in the first or
second phase of the venture.
The subscription scheme works especially well for two
diametrically opposite types of publishers: publishers of static
information (out of print or public domain books, annals,
histories, and so on) and publishers of volatile information
(magazines, journals, encyclopedias, fact books, almanacs, and so
on). It will work particularly well for publishers like Dover
who already have an effectively infinite list, since all their
books are in the public domain. But it may work as well for all
other publishers--including newspaper publishers.
9.4 Entrepreneurs
The subscription scheme will also work for entrepreneurial
publishers. Anyone can be a new publisher; all you need is an
audience. A start up with as few as 20 productive authors and
10,000 captive readers, charging each reader only $10 a month,
will gross $1.2 million.
+ Page 41 +
After display technology becomes cheap enough there will be
a (perhaps) five year window of opportunity for capital-light
start ups. Initially, the market should be similar in growth
potential to the software market of 1977 to 1984. After that
period of explosive growth (and huge profit), the market should
stabilize to a few large companies and many niche companies.
Then the largest companies will compete for market share and the
thousands of niche companies would become the self-replenishing
part of the market. Given an audience, by 1996 anyone could
become a publisher without getting a mortgage.
For example, a race car enthusiast might acquire titles on
formula racing, racing news, racing in history, car maintenance,
car technology, biographies of racers, short stories, and
adventure novels. Further, there may be discussion groups
handled by the publisher's machine on aspects of racing or on
that month's novel or story. And the same would be true for a
lover of 19th century novels, or science fiction, or any other
niche. Each title may be almost useless to its author, but being
selected as part of a well-chosen group gives social and economic
value to the author, publisher, and readers. Few authors have
the capital or the will to develop, promote, and distribute their
titles.
Besides salaries, advertising, and phone bills, such a start
up today only needs an initial capital outlay of about $20,000 to
buy (or even lease at 1/10th the cost) the machines answering the
phone, and a continuing cost of perhaps $10,000 a year for
maintenance. And these costs will halve every two to three years
as equipment prices continue to plummet.
Expansion of the number of distribution sites is even more
nonlinear than increasing print run size today; a few thousand
dollars of equipment translates to support for millions of
dollars of subscriptions. Rents can be low too since
distribution sites need not be in New York. No humans are
necessary, so Alaska will do just as well.
Not even the phone bills would be that high. A subscription
service can first send each of its users a fixed program to
uncompress its books, and send books on demand in compressed
form, taking only a few milliseconds to complete each call. Such
a start up could attract $1 million in venture capital with a
short payback period, unlike start up paper publishers today.
With venture capital and a ready market, it could become a
billion dollar publisher in ten years. The fortunes of seven of
the ten richest U.S. billionaires are based on media,
communications, or computers; publishing is right in the middle
of this triumvirate.
+ Page 42 +
Established publishers should brace themselves for increased
competition.
10.0 Technological Hammers
It has become obvious that the machine is here to stay . . .
. The sensible thing to do is not to revolt against the
inevitable, but to use and modify it, to make it serve your
purposes. Machines exist; let us then exploit them to
create beauty--a modern beauty, while we are about it. For
we live in the twentieth century; let us frankly admit it
and not pretend that we live in the fifteenth. Aldous
Huxley. [31]
Armed only with a hammer, everything looks like a nail. To
technologists, every problem has a technological solution,
particularly since technolust can blind them to potential
problems. But industry has to look at more issues. Just because
a new technology is technically superior to an older technology
does not mean that it will win; it can lose for social reasons
that have nothing to do with technology. [32]
For example, digital audio tape has not yet replaced analog
tape in the U.S. thanks to strenuous obstruction from the
Recording Industry Association of America. Although automated
teller machines were a success for Citibank, Chemical Bank lost
tens of millions on their experimental home banking system. [33]
Videocassette recorders (VCRs) succeeded over analog videodisc
players because videocassettes were rewriteable and the videodisc
industry paid no attention to the renting market. Fax machines
are more prevalent than electronic mail in the business community
because they require no special protocols and business people are
more familiar with paper. Fax machines succeeded but the
picturephone, first introduced in 1971, has yet to take off. [34]
On the other hand, fax machines were first developed 30 years ago
and only succeeded when they agreed on international standards.
And most telling of all for this report, after 15 years most
videotext systems have yet to take off. [35]
On the other hand, matches replaced flint, cars replaced
horses, telegraphs replaced the pony express, transistors
replaced vacuum tubes, digital optical discs replaced analog
phonograph discs, fiber optic cable is replacing copper cable,
and cable television is replacing airwave television. Such
examples can be multiplied indefinitely, for they are the records
of our civilization.
Superior technology beats inferior technology if it can be
adopted without too much initial social change. And even that
inertial barrier can be overcome if the technology is so
important that it must be adopted or the society dies--as
happened with radar and all other warfare-originated
technologies, or is so superior that it must be adopted or the
industry dies--as happened with steamships.
+ Page 43 +
For the technologist, a world of 5.5 billion that is growing
by 96 million people a year---12 Chicagos, 8 Cairos, or 4
Canadas--needs all the technological help it can get.
Particularly in the strongest and richest nation in the world; a
nation that ranks twenty-third in infant mortality, a nation that
graduates more lawyers than engineers, a nation where one in five
children are born illegitimate, a nation where one in four
children are below the poverty line, a nation whose children rank
behind those of most developed nations in general knowledge,
math, and science, and a nation where, as of November 1, 1991,
8.6 million people are unemployed. The technologist's job is to
tell the rest of society about possibilities they may be unaware
of. The technologist's problem is to estimate the rest of
society's reaction to a new product.
An examination of why some technologies languish while
others explode and an exploration of potential relations between
each such reason and the publishing industry's mission would turn
this report into a book. For example, businesses saw fax machines
as superior to electronic terminals. Initially they cost the
same, but training time was shorter since they used a phone with
no special protocols and faxes could carry arbitrary images,
including pictures and handwriting.
However, once received a fax must be processed in the old
way, while electronic documents can be stored, searched, cross-
referenced, indexed, linked, and retrieved by machines. Further,
it is more convenient to send long documents electronically, they
can be reformatted for a new display, they do not bounce if the
target phone is busy, and they can contain working programs and
animated illustrations. And of course they can always be
printed.
It is to the discredit of the computer industry that the
opportunity and need for fax machines existed. Fax machines
would have been unnecessary were it not for endless squabbling
over interface standards and an unthinking allegiance to arcane
interfaces and protocols. The widespread inability to program
simple VCRs shows that this attitude is not confined to computer
scientists.
Instead of exploring the social issues further, this report
has presented, in decreasing order of confidence: the technology
likely to affect publishing over the next decade; reasons why
that technology will become widely used; a way for publishers to
exploit the technology (albeit, a way that is biased toward the
interests of educators, scientists, and technologists); and a
case that if some publisher adopts that strategy then other
publishers will lose revenue. Publishers must determine how much
faith they should place in each step of the extrapolation. Their
decisions may determine who will be succeeding and who will be
succumbing ten years hence.
+ Page 44 +
Appendix A. Electronic Book Technology
The evolution of the personal computer has followed a path
similar to that of the printed book, but in 40 years instead
of 600. Alan Kay. [36]
To understand the long-term threat to publishing paper books, we
need to understand some technology: computer memory, optical
discs, memory cards, geosynchronous satellites, cellular radio,
radio frequency modems, fiber optic cable, electronic networks,
flat-panel displays, portable computers, and desktop computers.
This appendix also supports claims made in the report that
some apparently radical technology will not only be possible, it
is almost inevitable. By sketching the demand and market for
each piece of technology, it also shows the computer industry's
commitment to rapid change and it shows why this pace of change
is inevitable. Personal computers are not yet as common as
dishwashers, but that is only a few years away.
It is hard to grasp just how much computers have improved.
Unlike any other technology ever, computers have improved 10
millionfold in the past 50 years; [37] in that time computers
have gone from the lab to the lap. In 30 years, computers shrank
from houses, to cars, to refrigerators, to ovens, to microwave
ovens, to record players, to large books, to magazines, to
wallets. They have stopped at wallet size only because if they
were any smaller humans could not use them; eventually they will
accept voice input and could display output on the inside of a
pair of sunglasses. In the far future, they may move inside the
human body.
Since 1971, the number of components on a chip has doubled
every 16 to 18 months, and computers as a whole are now halving
in price every two or three years. The present pace is expected
to continue for at least two more decades, which means a further
10 millionfold improvement. And because computer technology is
self-synergistic (better computers help us design and build
better computers) the computers ten years from now can be used to
keep the self-improvement ball rolling.
+ Page 45 +
The industry's watchwords are: smaller, lighter, faster,
denser, stronger, cheaper. Unless something drastic happens, in
10 years powerful computers will be as easy to use as toasters,
in 20 years they will be as common as pens, and in 30 years they
will be as cheap as paper-clips.
A.1.0 Computer Memory
A bit (binary digit) is a one or zero (off or on), and eight bits
is a byte. The number of bytes a device can store is its memory,
or storage. In 1986, memory was measured in the thousands or
tens of thousands (1 kilobyte is roughly 1,000 bytes). In 1991,
memory is measured in the millions (1 megabyte is roughly 1
million bytes), or billions (1 gigabyte is roughly 1 billion
bytes). By 1996, it will be measured in the trillions (1
terabyte is roughly 1 trillion bytes), or quadrillions (1
petabyte is roughly 1 quadrillion bytes).
One byte usually corresponds to one character: a letter,
number, or punctuation mark. On average an English word is about
5 or 6 bytes and a novel is anywhere from 60,000 to 100,000
words. So roughly, a novel is about 1/2 megabyte, a 500-page
textbook is about 1 megabyte, and, at VHS (Video Home System)
quality, a 1 hour movie is about 3/4 gigabytes. And these sizes
halve when files are compressed. This report contains about
21,500 words and is about 135 kilobytes.
Memory cost is dropping fast. In 1964, 128 kilobytes cost a
million dollars. Today that much memory is cheaper than the
small amount of plastic used on the chip surrounding it. In
1984, 1 megabyte was a lot of memory; few people could afford
that much memory, and they all worked at large institutions. By
1991, hundreds of thousands of personal computer users had over 8
megabytes of computer storage and 1 or 2 gigabytes of tape or
disc storage.
The Panasonic LM-D501W is a rewriteable optical disc that
holds 940 megabytes (roughly 1,800 novels); it is about the size
of a compact disc and it costs $140. The 3M 8mm D8-112M is a
rewritable digital tape that holds 2.3 gigabytes (roughly 4,600
novels); it is about the size of a cassette tape and it costs
$18.
+ Page 46 +
In 1990, IBM succeeded in storing 1/8 gigabyte on a 1 inch
square magnetic disc. Just six years separate the first IBM 1/8-
megabyte chip from the first Hitachi 8-megabyte chip; a 64-fold
increase--the equivalent of a doubling every year. Some expect
terabyte memories within ten years. Five such memories would
hold more text than the human race has ever produced.
A.1.1 Optical Discs
An optical disc is a metal-coated polycarbonate disc covered by
protective clear plastic with a 20 kilometer long (or longer)
spiral, with pits inscribed along the spiral. Each pit is
between 1.3 and 4 micrometers (millionths of a meter) long, so a
laser is necessary to focus light on such tiny pits in the disc.
A human hair is about 75 micrometers wide; a phonograph groove is
about 100 micrometers wide.
On a music disc, the length and frequency of occurrence of
the pits matches the sound's pitch and loudness. Unlike a
phonograph record, reading speed is high, scratches will not harm
it, the disc lasts longer than a human does, and there is no
degradation of the reading surface over repeated readings. Human
mouths produce sounds that are vibrations in the air, these
vibrate from the lowest bass of about 73 hertz (73 cycles a
second) to the highest soprano of about 1.5 kilohertz (1,500
cycles per second). Because we can hear only up to about 20
kilohertz, once we sample a sound at twice that speed or higher
we capture all that any human can hear.
A compact disc (CD) is just a small optical disc; instead of
music it can just as easily store any sequence of pits. For
example, digital cameras and scanners can convert any scene into
a series of bits, and we can store these bits as pits in an
optical disc.
An optical disc can hold from 550 to over 1,000 megabytes
(one gigabyte). So one small light disc can store up to 1,000
textbooks or 2,000 novels. Sony chose the size of compact discs
(72 minutes) so that one would contain all 66 minutes of
Beethoven's Ninth Symphony; beside convenience, there is no other
reason for them to be so small. Further, because they are
circular, their area grows as the square of their radius, so a
disc of double the width would hold four times as much
information. Larger discs can hold 5,000 books--a truckload. A
few dozen can hold a trainload. A few thousand can hold all 20
million books in the Library of Congress.
+ Page 47 +
A.1.2 Fast Memory and Memory Cards
Late in 1990, Hitachi surprised the world with the first 8-
megabyte dynamic random access memory (DRAM) on a single chip.
The chip is 10 millimeters by 20 millimeters--the size of a
fingernail--and it contains 140 million electronic components,
each over 100 times smaller than the diameter of a human hair.
Dynamic means that the chip loses its memory unless it is
continually powered. Random access means that any part of the
memory can be fetched or written to in the same time as any other
part. With an access time of 50 nanoseconds (billionths of a
second), the chip can output its entire memory, roughly 16
novels' worth of data, in roughly 3.2 seconds. An eye blink is
about 1/10th of a second.
Memory cards are credit card sized random access memories
that hold their data without external power. They are low power
and they will make disc drives obsolete within seven years. At
present they are expensive, but the price is expected to drop
rapidly as technology improves and demand drives their
development. [38] Fujitsu, the second largest computer company
in the world, and Intel are now working on a 64-megabyte memory
card.
A.2.0 Computer Communications
Most of the world's major computers are linked together into
gigantic electronic networks. The Internet, the largest computer
network in the world, links over 350,000 computer installations,
most with thousands of users, in 26 countries. Because of its
strategic importance, in the U.S. the Internet is supported by
the Defense Advanced Research Projects Agency, the National
Science Foundation, the National Aeronautics and Space
Administration, and the Department of Energy. This subsection
discusses the technology used to connect computers.
+ Page 48 +
A.2.1 Geosynchronous Satellites
A geosynchronous satellite remains above the same spot on the
earth by orbiting at roughly 36,000 kilometers up; it allows
communication between any two points in its footprint (all the
places it can broadcast to). For example, the recently launched
AsiaSat-1 has a footprint extending over China, Japan, and most
of the Pacific Rim countries. Earth stations beam (uplink)
microwaves to the satellite and the satellite beams (downlinks)
them back to earth. (Microwaves are poorly named; they are so
named because they are the shortest radio waves, but radio waves
are longer than most other electromagnetic waves, as for example,
light.) Microwaves allow a communications capacity of about 1/4
megabyte per second, but with 1/4 second round trip time lag
because they must travel to space and back.
As the technology has improved, receivers have shrunk;
currently receivers can be less than 1 meter wide (an arm's
length) and are expected to shrink further. These receivers are
affordable by individuals and are growing ever cheaper. There
are now 1,400 satellites of all types in orbit. [39]
A.2.2 Cellular Radio
Unlike citizens-band radios (CBs) that require mobile users to be
close to each other, a car phone works by cellular radio. It is
a phone that keeps its connection while the user is mobile by
continuously checking its immediate neighborhood for repeater
stations and rapidly switching to a new station when out of range
of the last one. The switching takes place so rapidly (0.3
seconds) that human conversations are not interrupted.
In February 1991, the U.S. Federal Communications Commission
(FCC) approved three experimental pocket phone systems in
Atlanta, Boston, and Long Island by three different U.S. cable
companies. These phones fit in a shirt pocket and do not require
any other equipment; low-power radio towers throughout each city
pick up their weak broadcasts and computers route the traffic to
the appropriate person. These phones can be used anywhere in the
city. In September 1991, the British-based satellite consortium
Inmarsat announced plans to launch 30 to 40 satellites to do the
same for pocket phones, but worldwide. And Motorola is
petitioning the FCC to approve its Iridium Project: a plan to
launch dozens of low-power microsatellites that would do the same
for portable computers--again worldwide.
There are now almost 7 million cellular phone users in the
U.S., and the number of cellular phones is doubling every year.
[40]
+ Page 49 +
A.2.3 Radio Frequency Modems
A modem (modulator/demodulator) is a device that transforms
signals from one form to another. Modems are usually used over
phone lines, but an RF (radio frequency) modem converts radio
signals to other forms.
In August 1991, CUE, a paging company, announced the CUE
LapCom RF modem. This modem lets senders transmit data without
knowing where the intended recipient is, and it lets intended
recipients accept data without dialing a special number. The
sender dials an 800 number and uploads the data with the intended
recipient's ID. CUE's computer uplinks the data to a satellite
and the satellite downlinks it to 270 FM radio stations in its
footprint. The radio stations then broadcast the data on their
FM subcarriers.
A few seconds after the sender transmitted the data, the
intended recipient's LapCom picks up the FM signal and receives
the data. This system reaches over ninety percent of the U.S.
and Canadian population. CUE currently supports 70,000
subscribers and is planning to offer the LapCom service at $60 to
$75 per month. CUE is pricing the LapCom itself to be
competitive with normal modems.
A.2.4 Fiber Optic Cable
Fiber optic cables use lasers to send information down glass
fibers. Fiber optic cables are light, small, energy-efficient,
non-rusting, not easily wire-tapped, and long-lasting. They let
us send a huge amount of information (that is they are high-
bandwidth), and at near the speed of light. A single cable can
carry up to 1 million simultaneous phone conversations.
In the past decade, the bandwidth of fiber optic cable has
increased 100 times while the cost of fiber fell from $3 a meter
to 15 cents a meter. [41] Currently every developed nation is
laying millions of kilometers of fiber optic cable a year. Hong
Kong's telephone network will be all digital by 1994, Singapore's
by 1995, and Japan's by 1996.
+ Page 50 +
A.2.5 Electronic Networks
Today's fiber optic local-area networks (LANs) have bandwidths of
6.25 to 18.75 megabytes per second, [42] which lets us send a
500-page book in under 1/6 of a second. Nippon Telegraph and
Telephone, the largest company in the world, has already built an
experimental fiber system transmitting almost 1/3 gigabytes a
second over 2,200 kilometers. [43] In 1989, LAN sales (hardware,
software, and cabling) exceeded $5.68 billion in the U.S. alone.
[44]
In September 1991, the U.S. Senate approved a $1 billion
expenditure over five years to develop high-speed supercomputing
networks linking Federal, university, and corporate research
centers. This network will be 100 times faster than current
high-speed networks. In ten years, networks that are citywide
(metropolitan-area networks, or MANs) and nationwide (wide-area
networks, or WANs) with bandwidths of 1/8 to 1/4 gigabytes will
be the standard. [45] These bandwidths let us send a 500-page
book in under 4 milliseconds.
A.3.0 Flat-Panel Displays
Unlike the cathode-ray tubes (CRTs) used as the display devices
of most computers and televisions, a flat-panel display is flat,
light, thin, and uses little power. They are rapidly replacing
CRTs. [46] A liquid-crystal display (LCD) is one particular kind
of flat-panel display; it is a sandwich of glass containing
crystals of amorphous silicon or other materials that change the
way they polarize light in response to electricity. Electrodes
on the back of the screen can be used to display information by
polarizing light in different parts of the display.
In 1990, Japan's Ministry of International Trade and
Industry sponsored a $100-million project to develop a 40-inch
flat-panel display by 1996. [47] In 1990 and 1991 alone, Sharp,
Sanyo, Matsushita, Hitachi, Hoshiden, Toshiba-IBM, Mitsubishi,
and NEC together committed almost $2.25 billion to develop
active-matrix liquid-crystal displays. [48] Worldwide annual
sales of flat screens now exceed $2 billion. [49]
+ Page 51 +
A.4.0 Portable Computers
Portable computers are the newest and fastest growing segment of
the computer market. Toshiba alone sells 25,000 a month in the
U.S.; the total U.S. market is about 120,000 a month. Worldwide,
Toshiba alone has sold almost 2 million units. [50]
Portables are divided by size into palmtops, handhelds,
notebooks, and laptops, and they are further divided by whether
they have a keyboard. Notebooks are three-ring notebook-sized
(21 centimeters by 30 centimeters and 5 centimeters thick) or
smaller. Today, they weigh between 2.5 and 4 kilograms, but that
is dropping rapidly. [51]
The new pen-based notebooks are about 2.5 kilograms. They
are about the size of a thick magazine and dispense with a
keyboard by reading the user's handwriting. In 1991, the second
year of pen-based computers, there are already 33 companies
producing pen-based computers.
Notebooks were introduced two years ago and already are
beginning to extinguish laptops; the notebook market is growing
by 20 percent a year. There are now 125 different portables and
every month brings a new model, with new features, and lower
prices. Notebooks will quickly drop to 1 kilogram--lighter than
8 millimeter camcorders--then, along with camcorders, they will
drop even lower.
Many portables have the same computational power as a
desktop computer, and prices are high, typically in the range
$2,000 to $6,000, but that is dropping rapidly. By 1994,
notebooks may weigh under 1 kilogram and cost $2,000. By 1996,
they may weigh less than a paperback and cost $1,000.
The big problem with portables is the batteries needed to
run the disc player. As with camcorders (and for the same
reason, except in camcorders the power drain is caused by the
tape transport), currently batteries last only two to three
hours. But that time will increase when memory cards become
cheap enough. And the same will be true of camcorders; it is not
necessary to produce an analog recording, and on tape to boot.
Two AA batteries, the same power used today to run a television
remote control, can run a portable with a memory card instead of
a power-hungry disc drive for a week.
In July 1991, the Zenith MastersPort 386SL, priced at
$5,000, improved enough to extend battery life to eight hours.
The U.S. Army immediately placed a $50 million order. The
MicroSlate Datellite 300S is touch-sensitive and keyboardless and
runs for eight hours, but it needs two 12-volt batteries to do
so. It costs $6,000. The Dataworld NB320SX has a smaller screen
and only two hours of battery life. It costs $2,300.
+ Page 52 +
A.5.0 Desktop Computers
The desktop computer market is even larger than the portable
market; worldwide sales of high-end desktops exceeded $7.3
billion in 1990 alone, more than a seven-fold increase in only
five years. [52] Like every other part of the market, the huge
demand drives unrelenting improvement and enormous price cutting,
which increases the market and further drives improvement. For
example, in October 1991, IBM cut prices on the PS/2, its
personal computer, by 20 percent; in November 1991, Toshiba and
Compaq cut prices on several of their computers 25 percent; and
in 1990 Apple halved the prices of all its computers. These are
common occurrences in the computer industry over the last ten
years.
Introduced three years ago, the NeXT desktop computer came
with Webster's Ninth Collegiate Dictionary and Shakespeare's
corpus, ready for instant display of any page or part of page,
with its accompanying high-resolution illustrations. Among many
other then amazing advances, the NeXT let readers search for any
phrase or part of phrase, or any other simple pattern, and in
milliseconds it displayed all pattern occurrences anywhere in
Shakespeare's works.
After only three years that computer is already obsolete;
the current best high-end personal computer is the just
introduced Silicon Graphics IRIS Indigo. The Indigo operates at
30 MIPS (million instructions per second), and combines compact
disc quality sound with real-time three-dimensional animation.
It can display color images as fast as it can read them off of
its disc. It costs $8,000.
Three years ago the original NeXT cost $10,000 to students
and academics; in 1991 it costs $5,000 to the general public and
$3,000 to students and academics. By 1995, it may cost as little
as $1,500. By 1997, equivalent power will be available for $500.
+ Page 53 +
Appendix B. Electronic Book Players
Every great advance in science has issued from a new
audacity of imagination. John Dewey, The Quest for
Certainty.
Besides portable and home computers electronic books can be
displayed on special-purpose electronic book players. These may
bring the most long-lasting changes in the publishing industry.
B.1.0 Readman
The Sony Data Discman, called the Readman here, is a modification
of the Sony Discman, their portable disc player. The Readman is
10 centimeters by 17 centimeters and weighs 1/2 kilogram--about
the size of a paperback and the weight of a hardback--with a
keypad and small pop-up liquid-crystal display. Users tap in
queries on the keypad and information is displayed on the liquid-
crystal display. It stores information on a compact disc holding
roughly 200,000 pages of text. [53] It also plays music compact
discs.
Sony initially offered 17 titles, and by April 1991 offered
over 30. They sold 200,000 titles in five months at a list price
ranging from $25 to $155 a title. As with music discs, a title
costs $2 to make and the cost drops with volume. Since there
will be little or no retooling involved in switching a music disc
factory to a book disc factory, there will be almost zero
transition cost to produce the discs.
From its introduction in July 1990 to February 1991, Sony
sold 100,000 Readmen in Japan at a list price of $450. Sony is
making 20,000 Readmen a month, and introduced them in the U.S. on
November 1, 1991. For its U.S. debut, Sony changed its name to
the Electronic Book Player, upgraded its screen from two inches
to three inches, bundled Compton's Multimedia Encyclopedia with
it, improved screen backlighting, added graphics ability,
increased the unit's price to $550, and decreased title prices to
between $20 and $69.
To estimate how many Readmen may be sold in English-speaking
countries, in 1990 alone Japan sold 3,188,600 camcorders in the
U.S. at prices ranging from $800 to $3,000. Worldwide in 1990,
Japan exported 7 million camcorders, 11 million compact disc
players, and 26 million videocassette recorders. Once there are
a few million English-speaking Readman-equivalent units in
existence, Sony, or other suitably positioned companies, will
have the reader base to begin taking over at least the reference
part of the reading market (encyclopedias, dictionaries, and so
on). It should start happening within two years.
+ Page 54 +
B.1.1 Problems with the Readman
Readman discs are read-only memory (ROM), that is, they can be
read but not changed, its screen is too tiny and too low-
resolution, and it deliberately has no provision for computer
attachment. The last was a foolish decision on Sony's part,
caused perhaps by fear of reaction from the publishing industry.
(In the late seventies, the movie industry tried to obstruct
videocassettes by suing Sony for contributory copyright
infringement; they lost.) [54]
But making the Readman's memory rewriteable (so that users
can change it) and connecting it to a computer should take under
a year. If Sony does not do it someone else will. Commodore
already has a compact disc player out for $1,000 that sports an
advanced microprocessor (the Motorola 68020). [55]
In September 1991, Philips introduced the Magnavox 461; a
computer that plays music discs and comes packaged with
WordPerfect and Grolier's Electronic Encyclopedia. In October
1991, both Tandy and CompuAdd unveiled their CD-ROM computers;
they are the first to introduce multimedia personal computers
(MPCs). These computers add sound, animation, and near photo-
quality images to normal personal computers. Users can upgrade
their personal computers to become MPCs for about $1,000.
It cannot be coincidental that in March 1991 Philips,
Matsushita, and Sony formed a consortium of over 180 Japanese
companies to develop and market interactive compact discs (CD-I
or compact disc interactive). These discs allow interaction by
users and they combine sound, pictures, text, graphics, and data
on a single compact disc (for technical information, see Philips
International, [56] and for an overview see Herther). [57]
By Christmas 1993, Readmen or Readmen-equivalent systems may
cost $200. Parents may buy them by the hundreds of thousands to
give their children access to the information readable on the new
media. If Sony, or any of the other suitably positioned
companies, is as astute in 1994 as Apple was in 1984, then they
will drop prices even further and sell in quantity to high
schools and universities. By 1995, high schools may incorporate
them into their classes and curricula, as happened with the more
expensive personal computers in 1984. If Sony is clever they
could also rent their units instead of selling them, just as AT&T
rented its phones until deregulation in 1984. If Sony does not
do it then a third-party company could do so.
+ Page 55 +
The problem with introducing new technology is a classic
chicken-and-egg: being unable to sell hardware unless there is
software to run on it, and being unable to sell software unless
there is hardware to run it on. Unlike many U.S. companies that
just sit on their hands and bemoan the problem, the Readman-
equivalent companies solved the problem by buying the chicken.
They started in 1988.
Sony lined up 63 Japanese publishers and other companies to
produce the books that will be read on the Readman. And just as
Sony, Fujisankei, and Matsushita bought major U.S. film, music,
and entertainment companies (in 1990 Sony paid almost $5 billion
for Columbia Pictures), Sony, and other capital-heavy Readman-
positioned companies like Toshiba, Philips, and Matsushita, will
surely continue to buy or co-opt western publishing companies, to
use their stock as software for the product.
All six of the world's largest music companies are now owned
by international corporations; the only remaining independent
music company is the seventh largest, Virgin Records--and it is
British. Bertelsmann Group, A.G. already owns similar properties
in 20 countries. [58] Of the major U.S. entertainment companies
all but one, Warner Brothers, are now foreign-owned. And in
October 1991 Toshiba and C. Itoh paid $1 billion for 12.5 percent
of Time Warner.
B.2.0 Dynabooks
Readmen are only the near-future electronic threat; turning paper
books into aluminum-coated polycarbonate discs will not remove
all the problems inherent in producing many copies of each title
on a fixed medium. The long-term threat to paper publishing
comes from dynabooks.
In 1971, Alan Kay at Xerox PARC (Palo Alto Research Center)
had an idea for a computational notebook that he called a
dynabook. [59] For the purposes of this report, a dynabook is a
notebook-sized keyboardless portable computer, with a large high-
resolution touch-sensitive color display and an electronic pen.
It communicates with the world through radio. The screen is
large enough to display two document pages at a time, in 11 point
font and at paper resolution, and the pen can be used to annotate
electronic documents. The dynabook must be a carry-anywhere
device; it must be waterproof and robust enough to survive a two
meter fall.
+ Page 56 +
It could function as: computer, phone, and credit card; body
health sensor, proximity sensor, and police whistle radio; clock,
calendar, agenda, reminder, alarm, and diary; notepad, drawing-
pad, and music synthesizer; mailbox, typewriter, and voicewriter;
spelling, grammar, style, pronunciation, and word frequency
checker; dictionary, encyclopedia, foreign phrase translator,
global map, location finder, and restaurant guide; video camera,
news viewer, video game display, and movie viewer; library, and
of course, book reader.
Dynabooks have yet to be realized cheaply but the technology
is almost here.
B.2.1 Realizing the Dynabook
The next step to the dynabook will be cellular or RF portables.
Researchers at Columbia University have already built three
different portables called PIPs (Personal Information Portals)
that communicate using cellular radio. [60] Since April 1991,
they have achieved bandwidths of 2 megabytes per second over
spread-spectrum radios.
The only two remaining technical advances needed to make
dynabooks a reality are improved screen resolution and computer
power. Current liquid-crystal displays are too low resolution
for comfortable reading over extended periods and in strong
sunlight, and portables are not yet powerful enough to accomplish
all the above dynabook functions.
But both obstacles will be overcome by 1996. Computer power
will not be a problem, but high resolution could remain an issue
for several years, perhaps as many as five. There already are
CRT screens of high enough resolution to rival paper (300 dpi or
higher), but they are expensive. After packing enough computer
power into a portable and improving its screen resolution enough
to rival paper, it only remains to bring its price within reach
of the general population. That should take another five years.
B.3.0 Grave New World
Cheap computing power, cheap storage, high-resolution flat
screens, cellular radio, radio frequency modems, satellites,
fiber optics, and networks equals the dynabook. And the dynabook
means that you can be anywhere and create, access, modify, or
transmit highly structured information anywhere else--in seconds.
By the turn of the century, information production and exchange
may be unrecognizable. As we hurtle into the future, technology
will make possible changes so drastic that they will be
considered discontinuities; changes both for the better and for
the worse.
+ Page 57 +
Imagine a world of little or no privacy, of even greater
earning power for the technologically-literate, of even larger
disparities between the haves and the have-nots, of wholesale
social disruption as the technology percolates through society.
Imagine a world where mail is delivered in four milliseconds
instead of four days and many postal workers are jobless.
Imagine a world where the proportion of the work force in
manufacturing, now 25 percent, drops to 16 percent--only eight
times the proportion of the work force in agriculture; postal
workers may have lots of company.
Imagine a world where suing a doctor means suing the
diagnostic program that the doctor used. Imagine a world of
greater financial instability and even shorter boom-bust cycles
as governmental regulatory agencies, designed for a slower era,
utterly fail to keep up with the speed of international
electronic money transfers. As you read this, all the money you
own is chasing other money around the world, 24 hours a day.
Imagine a world where anyone threatened with assault can
instantly alert the police and supply their exact location
together with video of their potential attacker; not even masks
or darkness may help attackers if the dynabook has an infrared
camera. Imagine a world where no news service is trustworthy
since any sound, any image, any scene, any movie--including those
with apparently live-action famous personages--can be complete
fiction.
These predictions are simple extrapolations from current
technology. Developments 20 years into the future require
unproven technology (nanotechnology, holographic memories,
biocomputers, optical computers, and atomic-scale computers),
artificial intelligence, or deeper changes in society. Just 35
years separate the decryption of DNA from the first patented
artificial animal life. Just 20 years separate Yuri Gagarin's
Vostok 1 flight from the first shuttle Columbia launch.
Just 14 years separate the first successful personal computers
from the Silicon Graphics Indigo.
We are now in the curious position that facts learned in
childhood are obsolete by the time we become adults 18 years
later. And it will only grow worse since the pace of
technological change is accelerating, and will continue to
accelerate. Given the enormous rate of technological change, it
is almost senseless to extrapolate 20 years into the future. The
world of 60 years from now may be as different from us as we are
from preindustrial societies.
+ Page 58 +
References and Notes
1. This report was originally issued in November 1991. It has
been edited, but not updated. In this report, prices are in U.S.
currency and a billion is a thousand million. Unreferenced
figures before 1990 are from: Miles Smith-Morris, ed., The
Economist Book of Vital World Statistics: A Complete Guide to the
World in Figures (London: The Economist Books, 1990); and The New
York Public Library Desk Reference (New York: Webster's New
World, 1989). More recent figures are from The Economist and
IEEE Spectrum.
2. Stan Luxenberg, Books in Chains: Chain Bookstores and
Marketplace Censorship (National Writers Union, 1991).
3. Mack Chrysler, "Canon: More Than Just Cameras," IEEE
Spectrum 27 (November 1990): 113-116.
4. Anne W. Branscomb, "Common Law for the Electronic Frontier:
Networked Computing Challenges the Laws that Govern Information
and Ownership," Scientific American 265 (September 1991): 154-
158.
5. John Diebold, The Innovators: The Discoveries, Inventions,
and Breakthroughs of Our Time (New York: Truman Talley
Books/Plume, 1990), 177-202.
6. Intellectual Property Rights in an Age of Electronics and
Information (Washington, D.C.: U.S. Congress, Office of
Technology Assessment, 1986).
7. Richard L. Phillips, "MediaView: A General Multimedia Digital
Publication System," Communications of the ACM 34 (July 1991):
74-83.
8. User Manual for the Xerox/Kurzweil Personal Reader Model 7315
(Kurzweil Computer Products, 1988).
9. Terrence J. Sejnowski and Charles R. Rosenberg, "Parallel
Networks That Learn to Pronounce English Text," Complex Systems 1
(1987): 145-168.
10. "Display Net: An Electronic Catalog Gives New Meaning to
Impulse Buying," NewMedia, no. 6 (September/October 1991): 25.
11. Barry Zuber, "Hub of Activity: Departmental Printers Share
Computer Connectivity and Boost Office Productivity," Publish
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+ Page 59 +
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+ Page 60 +
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+ Page 61 +
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Acknowledgements
If nature has made any one thing less susceptible than all
others of exclusive property, it is the action of the
thinking power called an idea, which an individual may
exclusively possess as long as he keeps it to himself . . .
. That ideas should be spread from one to another over the
globe, for the moral and mutual instruction of man, and
improvement of his condition, seems to have been peculiarly
and benevolently designed by nature. Thomas Jefferson.
One of the best ways to get yourself a reputation as a
dangerous citizen these days is to go about repeating the
very phrases which our founding fathers used. Charles A.
Beard.
+ Page 63 +
Article 5 of the ACM Code of Professional Conduct states that an
ACM member shall use the member's special knowledge and skills
for the advancement of human welfare. Although I have no special
knowledge of publishing or economics, I wrote this report because
I believe that marketable information should be cheap,
unprotected, and electronic--a belief I recognize as idealistic,
unrealistic, and perhaps even fatuous.
This report tries to show why it would benefit everyone to
make marketable information a little cheaper, a little freer, and
more electronically available. And since I do not see how
something like it could be perpetually avoided, I hope this
report helps to reduce avoidable near-future confusion,
disruption, and conflict.
I thank Judy Copler, Mert Cramer, Joe Culberson, Dave
Forsey, Dave Goldberg, Nola Hague, Andy Hanson, Carol Hutchins,
Rick Kazman, Jon Mills, Frank Prosser, Darrell Raymond, Lorilee
Sadler, Greg Shannon, Pete Shirley, and Bruce Spatz for their
comments on this report.
About the Author
Gregory J. E. Rawlins, Department of Computer Science, Indiana
University, 215 Lindley Hall, Bloomington, Indiana 47405; (812)
855-2136; Internet: rawlins@cs.indiana.edu.
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