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The Top 10 Myths of Digital Convergence

As one of the (many!) founders of the "digital convergence" concept , we are both gratified and horrified at the tremendous popularity this concept has recently gained. Way back in 1982, we were exploring and writing about "PC-TVs", "PC-phones" and the "Interface Age."

Now-more than 12 years later-it seems like everyone in all the affected fields is talking about, or arguing about, the coming of digital convergence. The concept has taken off like wildfire, with a life-and industry conference circuit-of its own. But before we all get too terribly excited about the impacts of digital convergence, let's examine ten common myths about it. . .

Nothing is as powerful as an idea whose time has come. Digital convergence is a prime example.

This popular but not-so-new concept means pretty much what its name implies: the increasing tendency to digitize information is causing a rapid convergence of many products and services. Content (information), consumer electronics, computers, and communications are merging in interesting, synergistic ways. This is largely due to two factors: more and more content is being digitized, and intelligent software is interacting with content.

Convergence started as far back as the mid'80s, with products like the Brother Word Processor, the Franklin Electronic Bible, Disney software, the Matsushita-MCA deal, Sony DataDiscMan, and Canon XapShot!, talking toys, online services, and videogames, and events like the Turner-MGM digital-colorizing flap. These were all early manifestations of digital convergence.

Today, we can see and read about converging technolgies and new allainces almost every day. What are the impacts you should be looking at as we move into an era of digitized, interactive information? Start by watching the confluence of once-separate products and services and the opportunities this may present for your business. Look at the thousands of businesses-from established corporations to start-up entrepreneurs-who are gradually moving onto the Internet. Publishers, travel agents, retailers of all kinds, realtors, law firms, ad agencies, newspapers, market researchers, and radio and TV stations are just a few examples of those who interact with clients and customers via the Internet. Think about ways your company can capitalize on opportunities, alliances, and emerging trends.

Imperatives:

The promise of a totally digital, interactive future is very compelling. But before we get carried away, let's explore and dispel some of the myths, misconceptions, and subtle mental twists that have recently developed:

Myth #1: Soon all information will be digital.

Please, get serious. Remember the paperless office? A paper document is more permanent, more trusted, and more final than its digital counterpart. For many people, paper will always carries more weight than something on screen. Nothing beats it for ease-of-use, mobility, readability, and cost.

Myth #2: If it's digital, it's interactive.

False. The vast majority of information is digitized solely for storage or transmission. The only reason we digitize things is so that our (still primitive) digital computers can handle them. Today, most digitized information is not human-readable or interactive.

Myth #3: Digital is the ultimate form of information.

Nope. If we had analog or holographic optical computers, we wouldn't need to digitize things. Digitizing is actually a very inefficient and expensive method. Just look at the difference in price, convenience, reliability, and quality of a 35mm photographic print versus any digital counterpart.

Myth #4: Selectivity plus choice equals interactivity.

Sorry. If you think surfing 500 channels, flipping pages in a magazine, choosing pay per view, or searching an electronic version of a paper database is interactivity, then you've set your sights way too low. Broaden your view of interactivity, or get out of the business now before you lose your life savings. (See General Types of Interactivity at right.)

Myth #5: Interactivity is key to a huge market.

This is true for only a small (but growing) subset of the population in developed countries (perhaps .5 to 1% of the world). Most people are passive when it comes to entertainment and barely interact with information. People enjoy and need to be "couch potatoes." For the most part, people are truly interactive only with shopping and communications-primarily phone conversations). Only a small subset of today's population (computer hackers and 7-14 year old Nintendo fans) really enjoy interacting with electronic devices.

Myth #6: Information at Your Fingertips is becoming a reality.

Again, this is true for only a few. Most computers are for communicating, playing, entertaining, and controlling, not for computing. E-mail, presentations, document preparation, and graphics are currently the primary uses of business PCs. Games and "edutainment" are the primary uses for home PCs and videogame consoles. Embedded computers are mostly for entertaining or controlling/security. Likewise, the top-selling applications for interactive TV, smart phones, electronic yellow pages, multimedia online services, and other subsets of I3 will most likely be games, shopping, security, and communications, not information per se.

Myth #7: Current platforms are too expensive-consumers won't buy anything over $500 (or $750 or $999).

Total nonsense! Tens of millions of consumers spend $1500-2500 on PC systems each year. The first TV, VCRs, CD players, camcorders, and so forth cost thousands in adjusted dollars. And don't forget the biggest consumer items of all-cars at $10-$50,000!

Myth #8: Digital convergence means that companies and industries will collide, cannibalizing each other.

Not necessarily-digital convergence creates opportunities for myriad new technologies, products, and services. Smart companies need to look outside their industries for the right expertise, raw materials (content), branding, and distribution to be successful, because no one company has all the right ingredients. This does not mean every partnership must be a grand alliance or acquisition. Simple licensing, OEM agreements, and other smaller alliances can work just as well-if not better-and certainly faster.

Myth #9: Content is king, and to win you must own it.

The first part is half-true, but the latter is definitely false. For most companies [except marketing monsters like Microsoft, Disney, or CTW], content will usually be second in importance to Brand. Its a lot harder to sell Digitek's Hole-in-One than it is to sell Accolade's Jack Nicklaus Golf, unless you are obviously, spectacularly better like Links 386 by Access.

Next, owning content is silly if you are not already in the content business-it's a very peculiar business model that doesn't mix well with device, transport, or service business models. And if virtually all content is available for licensing, why spend money to buy it? The key content owners know they are in the driver's seat and want to spread their brands/content to whatever platform comes along-Disney doesn't care if Mickey Mouse comics are outse