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Interview with George Gilder

If what you are saying is true, why are the computer makers so enamored of getting into the TV market? You have SGI, Intel, HP and Microsoft all trying to jump into the settop TV world. In the first place, Microsoft would like to get in if they can use their Windows interface. If they can extend their existing technology, it allows an expansion of the market that is appealing to them. But in fact, they have not been very amenable negotiators with TCI. Everything has fallen apart between TCI and Microsoft, although they recently announced they might do a channel together. Compared to their initial ambitions, it's not much. So the fact is, Microsoft has not been especially interested in this side of the business. And [Bill] Gates himself has said interactive TV is a very bad way of thinking about the new kinds of computers we are going to provide.

So you think he is not going to pursue this? He's not going to avoid the possibilities of being able to insert Microsoft code into settop boxes or any other kind of television interfaces that might emerge. And they are doing quite a bit of work on it. They also have various plans for multicomputer-based movie archives, where you can use lots of PCs collectively in a multiprocessing scheme to deliver movies to TV sets. So there are various applications they are willing to do, but it's not the core of their business. The core of their business is developing the PC to the point where the television becomes a mere peripheral, as Andy Grove has said.

You think that's Intel's strategy as well? I think that's both their strategies.

Even though Intel is doing deals where they will provide chips for settop boxes. Yeah. They want to sell chips to settop boxes because they are in the business of selling chips. But it's not the heart of their business. Now, Silicon Graphics and HP have a different predicament. They don't have a big market for their microprocessors because the PC market is dominated by Motorola, IBM and Intel, with a few satellite companies. Companies like Silicon Graphics and HP would like to be able to get microprocessor volumes somewhat comparable to the volumes already achieved by the X86. So they see the settop box as a way of getting market share by expanding the market. And thus reducing the incremental cost of their products so they can compete with Intel in the computer business. That's a different strategy and it may work to some degree, but my general thesis is that it's not going to be a howling success. SGI will be a great company because it has the best 3D hardware and software. The world is 3D and people will want 3D functionality in computers and entertainment functions. So they will be a key player, but they probably won't be able to get huge volumes for their Mips processor by installing it into settop boxes.

The PC is going to be an ever-receding target. The computer will be able to embody a settop box in the course of its routine functions. People keep talking about the PC as if it's an elite instrument, while the TV is a populist box. But when you are up to 50 million sales a year [of PCs], that's six times more than TV sales. You are beginning to get a meaningful installed base in the home. It's now in about a third of the nation's homes, and at the current pace it's going to be 50 percent in a few years.

You have to project all these vectors at once. The vector of increasing PC capability, the vector of hugely increasing PC communications capability, the increasing capability of the users of PCs. When you compare that with this effort to put everything into a settop box for $200 or $300 over the next few years, it all looks pretty insignificant.

Will there be broadcast TV as it is today? Or will it all become video on demand? It will definitely be video on demand and it will change its quality. Today, if you have to reach a large number of viewers at any single time, you have to go for their lowest common denominator. You can't appeal to people's special ambitions and curiosities and career goals and education interests. You have to attract as many eyeballs as possible at a particular prime-time slot. And that requires that you go for what we all have in common, and what do we have in common are our prurient interests, morbid fears and anxieties.

And sports. We do have sports. But that means that programming really succeeds by appealing to these few rudimentary facets of our personalities. In the future you'll get your first choice, rather than settling for the best thing that happens to be on the air when you are ready to watch. If you can get your first choice at any time, then the market changes drastically. It changes to a market that resembles the current book and magazine trade. There are currently 55,000 books published every year. They come in all kinds of varieties.

If you want to know the future of TV, or the future of PC multimedia as it becomes a dominant force in our culture, you should look at the book and magazine market. Just as desktop publishing of text led to this huge proliferation of newsletters, magazines and special interest publications, desktop publishing of multimedia video will result in a huge proliferation of new video multimedia products of every description.

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