The Future of Technology Total Convergence and the "Media Explosion"

The Consumer Electronics Show in Las Vegas and the Macworld fair in San Francisco marked "Tech Week" -- a highlight of the year for high-tech freaks in the United States. Both Bill Gates and Steve Jobs put on spectacular shows -- and predicted the increasingly networked character of the digital world.

Las Vegas is madness, but there's method to it. Hardly any other place in the United States is more neon-lit, gaudy and loud. Whoever wants to attract attention in the gambler's paradise -- open 24 hours a day, the year round -- has to put on a good show. And Robert Iger knows it. The man has led the Walt Disney Company for about a year -- the boss of an international media empire that comprises everything from Donald Duck to blockbuster films like "Pirates of the Carribean."

Relaxed and self-confident, Iger strides onto the stage of the stadium-sized congressional center on the fifth floor of the Venetian casino complex. More than 3,000 representatives of the media, computer and telecommunications industries have assembled before him in the hall -- and Iger is doing what everyone here is making their best effort to do: He's praising himself.

TV, cinema, music, Broadway shows -- his corporation is number one in each of these fields, Iger boasts. And that's especially important now, since the world is facing a "media explosion," he adds.

The Venetian is one of the biggest casinos here -- a fun machine with 4,000 suites and dozens of luxury boutiques and gambling halls. Hordes of uninhibited office workers spend day and night roaming this world of cheap facades, an imitation of the famous canal city in northern Italy, complete with its own St. Mark's Square, Rialto Bridge and replicas of historical statues. Pretty women arrive from out of town, dressed in full feather. They stuff dollar notes into slot machines, surrounded by the sound of jackpot fanfares. It's a surreal blend of thrill seekers and the timeless yearning for the big money.

Iger fits right in. He knows about artificial worlds -- after all, he's in charge of five Walt Disney amusement parks, complete with their own imitations of the Eiffel Tower and European castles. The man from Hollywood is one of the keynote speakers at the Consumer Electronics Show (CES), which is celebrating its 40th anniversary this year -- and its speedy rise to success.

The CES began as a somewhat boring tradeshow for products like TV sets and record players. Even as recently as five years ago, the CEO of Walt Disney would never have turned up here. Back then, Hollywood was still refusing to have anything to do with the threatening world of the Internet, riddled as it was with criminal product pirates.

Total convergence

Those days are over. The film industry can no longer ignore the digital revolution. And so Iger's speech had just one topic -- the unrestrained merging of computers, the Internet, cinema, television, mobile phones and a handful of other products. This total convergence is what Iger means when he speaks of an "explosion." It's a kind of Big Bang, expected to yield a new entertainment universe that will make films, music and games available not just to every living room, but to every pocket.

The other presentations were all devoted to one and the same goal too: Every piece of content should become available on every piece of electronic equipment, at any time. The times when TV sets were used only to watch television, when mobile phones were used only to talk and when MP3 players were used only to listen to music will soon be over for good.

The most prominent speaker appearing at CES, Bill Gates, wasn't able to resist this trend either, even though the Microsoft founder devoted most of his opening speech to advertising the new Windows Vista system and the Xbox games console.

But then he went on to dream a little about what a "connected experience" could look like -- meaning the total networking of everyday life. In order to do that, Gates had a kitchenette set up on stage. It made recipe suggestions on the basis of the food available. For example, the system tells Gates -- who confessed to not being much of a cook -- that the flour in the cupboard can be used to make the Italian bread focaccia and tells him exactly how to bake it.

Gates also presented room-size wallpaper that doubles as a monitor. It could allow Grandma to keep an eye on her dog while she is away. Before anyone had a chance to ask who was going to feed the animal in her absence there was hysterical applause from the corner of the hall where Microsoft's employees were seated.

In general, the CES is now considered the main indicator of where the computer business is going -- more than any other tradeshow in the world. When the country's technophiles assembled here for the first time, in 1967, Jimi Hendrix was playing on the radio. Only one out of six US households owned a color TV set. The average apartment contained only 1.3 personal electronic items, usually radios -- and that was it. These days, the average US household has 25 such items.

So it's no surprise the CES boasts an impressive number of visitors -- both exhibitors and consumers: 150,000 people travel to the desert city for the few days of the show. Las Vegas's casino hotels dramatically increase their rates. The wait for a taxi takes at least 30 minutes -- and yet everyone is happy the technology sector has recovered following the stock market crash in the late 1990s. Twenty-five mobile phones are sold the world over every second. One out of three people in the world is already using such a phone.

"Gaga for Gadgets" is how one specialist journal describes the CES. And many producers use the "Tech Week" -- as it's also called in the United States -- to make announcements, usually riddled with superlatives. For example, Sharp presented the largest flat-screen TV in the world -- with a 108 inch monitor. The OQO company, on the other hand, presented the smallest Subnotebook in the world, fully compatible with the Windows Vista system and only the size of a pocketbook.

Meanwhile Michael Dell, whose corporation is swamping the world with personal computers, praised his own company's recycling program. Motorola CEO Ed Zander even came cycling onto the stage on a yellow bicycle in order to present a new invention he's especially proud of: a dynamo that can charge a mobile phone battery, for use in rural regions in India or Africa.

There was just one thing missing in Las Vegas -- and it became conspicuous by its absence. Just like every other year, every one listened intently on the Tuesday of CES week, as the news from San Francisco, a city 700 kilometers (435 miles) away, arrived via Blackberry.

Gates vs. Jobs

It was here that the Apple Corporation's rivalling electronics community self-confidently organized its own conference. Just as in earlier years, the high point of the Macworld trade fair was the speech by CEO Steve Jobs, who is revered in an almost cult-like fashion by the Apple community.

And Jobs more than satisfied his audience's expectations, made all the greater by the absolute secrecy cultivated before his appearance. He presented the first Apple iPhone, a mobile phone that impressively confirms the trend towards the total digital blending of all media. It's a phone, a music and video player, a digital camera, a navigation tool, an organizer and an Internet browser -- all in the form of a slim plaything that has just one pushbutton.

Speaking about how the iPhone would revolutionize the way telephones are used, Jobs was as cocky as ever. Apple has left its rival RIM, the producer of the Blackberry, five years behind, he said. The corporation has been confident it can do almost anything ever since its iPod became a sensational success. On the other hand, the new gadget will be quite expensive -- between $499 and $599. And it will probably only reach 1 percent of the world's phone market, at best.

With one symbolic step, Apple has provided all those still in doubt about the general trend of today's times with the proof they need: In its thirty-first year, the corporation is dropping the word "computer" from its name. It will henceforth simply be called Apple Inc. In an age in which everything blends with everything else, the corporation with the apple logo no longer wants to be seen just as a computer producer.

The "explosion" Iger spoke of in Las Vegas affects not just the form of the products, but their content as well. That became clear when the Disney Company CEO presented the imminent re-launch of the Disney Web site, complete with jazzed up multimedia features called "Xtreme Digital" (XD), on giant screens. These features are meant to do more than just entice users with plain-old film downloads. On the new site, the fan of a particular series will be drawn into a virtual dream world where he will discover games, like-minded people -- and of course even more new Disney products.

When they begin a new project, the Hollywood studios systematically plan its distribution across all media channels. Successful film producer and CES visitor Jerry Bruckheimer isn't just working on the third part of "Pirates of the Carribean," for example. New interactive features for high-resolution storage media, an extensive update of the computer game of the same name and a unique pirate world for the new XD Web site are being developed in parallel. The distinctions are becoming increasingly blurred: In terms of their aesthetics, high definition (HD) computer games already resemble animated films, and corporate Web sites increasingly feature moving images, interactive features and games.

Germany looks on

From the German point of view, the merging of the various media and their fancy accessories has left a bitter aftertaste. The Germans are heavily active as consumers, but they're of practically no importance as producers. The bankruptcy of BenQ, saw the disappearance of one of the last companies producing mobile phones in Germany. Economics Minister Michael Glos has lamented the decline of his country's film industry. And the once highly respected German camera producers are facing extinction.

Only 15 of the 2,700 exhibitors are from Germany -- and they're mostly small companies. The nation that coined the phrase "Progess through technology" ("Vorsprung durch Technik") is practically absent from the conference program. And the modern radios featuring the logo of the Grundig company are not actually produced in Germany, but in the USA -- by up-and-coming radio producer Etón, a company that started out 20 years ago as the US licensee for Grundig.

And the Cebit trade fair in Hannover isn't doing too well either. True, it still draws more visitors than the CES, but the exhibitors' interest is fading from one year to the next. "Cebit has just developed in the wrong direction. It was a mistake to surrender Cebit Home," says Marco Börries, for example. He's responsible for Yahoo's newly created "mobile communication" division and enjoys the droll title of "Senior Vice President Connected Life."

During the mid-1980s, Börries challenged powerful industry giant Microsoft with his Star office software, developed in Hamburg. But a few years ago he moved to California with his family. Now a top manager at Yahoo, the all-powerful Google has become his new rival, one he's challenging with a new mobile-phone-compatible search engine called oneSearch. The German government's recent proposal of a substantially state-financed German search engine called "Theseus" just makes the Yahoo man laugh.

But concern that digital progress could one day begin to slow down is spreading not just in Germany, but the world over. "Current legislation makes it far too easy for the big corporations to financially crush smaller, innovative companies with legal trials," Mitchell Stoltz complains, a serious young man standing at one of the most interesting stands of the entire trade fair.

Digital (un-)freedom

"Digital Freedom" reads a large poster. There's not a single product to be seen here -- just heated discussions between visitors to the trade fair. The discussions are about the concerns and aspirations of product inventors and developers and small entrepreneurs, all of whom are watching the forward march of the entertainment corporations with mixed feelings. The XM company, for example, records local radio programs and transmits them to even the most remote regions via satellite: Customers can receive and store the broadcasts on little satellite radios. But the music industry has sued the company, and a billion-dollar lawsuit is threatening to shoot the music satellites out of the sky.

That's the way new ideas can easily be nipped in the bud, Stoltz warns: "So-called pirates, such as Napster, were in fact the first to prove customers want online music. And it was only thanks to this knowledge that Apple could develop its legendary iPod, thereby creating an entire industry sector."

At first, the information booth looks as if it had been set up by a grassroots citizen's initiative. But a closer look reveals that the organizer is none other than the Consumer Electronics Association, which organizes the CES itself. The association knows that a trade fair such as the CES can only continue to prosper in a climate that permits innovation.

But reality almost always looks different. Many exhibitors prefer to compete for market sectors, thereby often blocking progress and innovation. The controversy over the storage medium for high-resolution television, which has been ongoing for more than a year, provides a clear example of this. Sony and some of its partners are betting on a technology knows as Blu-ray-Disc, while Microsoft and Toshiba are pushing the rival HD-DVD technology. Both systems provide razor-sharp images -- but they're not compatible with one another.

Battle of the formats

The two camps have holed up at two separate corners of the exhibition space. The HD-DVD lobby has set up its headquarters in a black trailer. Their main argument is that the technology advocated by them means affordable display devices and new interactive features. For example, Microsoft is selling an external disc drive (one that was really just meant to go with the Xbox games console ) for €200 ($260) -- at least for as long as there are no delivery problems. Almost 300 films are currently available in this format: Lara Croft, Harry Potter and King Kong are fighting on the side of HD-DVD.

Pirate flags have been raised in another corner of the hall. This is where the Blu-ray consortium has set up camp; Carribean pirate imagery is the main part of its advertising campaign. "Blu-ray is just the better format," they say. "Blu-ray's victory is just a question of time." In fact, Blu-ray's 50 gigabyte storage capacity has given it the advantage for now. But the HD-DVD advocates are striking back: At the CES, they announced the introduction of a disc with even more data space -- 51 gigabytes.

Consumers are the ones who end up suffering from these kinds of ridiculous marketing battles. Many will have only just purchased an expensive, HD-compatible device -- only to discover that high-resolution television is still virtually non-existent. So an HD player would be just the right item to buy next. But which system does the future belong to? At the moment, many Hollywood producers don't even release their films in both formats.

The long hoped-for agreement wasn't reached at CES. If anything, the hostility between the two camps has increased. At least LG Electronics will soon offer the first player that is compatible with both formats. But the sales price is a hefty $1,200.

It's an open question as to who will win this war of the formats. The winner may even turn out to be an entirely different technology. One possible candidate is the very technology that lies behind so many of the innovations presented at the CES -- a technology that enabled the large-scale integration of all media forms and formats in the first place: the Internet.

It's long been possible to receive high-resolution films on the Internet -- even using Xbox, as Bill Gates proudly demonstrated. Perhaps that will the big issue at the next CES: the demise of CDs and DVDs.