Digerati - Chapter 6

Digerati - Chapter 6

Denise Caruso [10.1.96]

Chapter 6


Denise Caruso  

THE PATTERN-RECOGNIZER (Esther Dyson): Denise is one of the most clear-minded people I know, both in understanding industry dynamics and in understanding people's motivations. But she can be critical of people who aren't as noble-minded as she is.

Denise Caruso runs Spotlight, an annual conference for interactive media industry executives. Her column, "Digital Commerce," appears in The New York Times.

"I don't think you should allow people to pick their titles. It's [baloney] that Dvorak isn't "The Curmudgeon." [Baloney] that Leonsis isn't "The Salesman." [Baloney] that Esther isn't "The Pundit." "Come on! If I wanted to change mine, I'd be "The Pragmatist" because taking the high road actually works best in the long run. If more people did the right thing early on, we'd have avoided most of the problems we're dealing with today in the digital world."

Replace "baloney" with the appropriate expletive and you've just read a typical email from Denise Caruso, "The Idealist."

Denise knows everyone. She can get anyone she wants on the phone. When you attend an industry conference and see Denise in one of her "colorful" black outfits, you know you've come to the right place. Her weekly column in The New York Times, "Digital Commerce," pulls no punches. She asks direct questions. She keeps people honest. People think she's tough, but the rational ones also know she's fair. The problem, she points out, is that people like the tough part when it concerns someone else and don't like it very much when it concerns them.

A longtime analyst and observer of both the computer business and the emerging interactive media industry, Denise has been writing her Times column since March 1995. She is also the executive producer of Spotlight, a conference for interactive media executives, for InfoWorld Publishing Co.

Denise was hired in 1994 by Norman Pearlstine (former executive editor of the Wall Street Journal and now editor-in-chief of Time Warner) to launch Technology & Media Group, an information services company that was part of his new media company Friday Holdings. Before launching Technology & Media, Denise was founding editor of Digital Media, a monthly industry newsletter that, under Denise's direction, was widely acknowledged as the seminal publication in the emerging new-media industry.

For five years prior to launching Digital Media in 1990, Denise wrote the "Inside Technology" column for the Sunday business section of the San Francisco Examiner, where she was a prescient advocate of First Amendment rights in cyberspace and one of the first journalists to focus on technology's effects on commerce and culture.

Denise has also contributed to the Wall Street Journal, Wired, The Utne Reader, and various other publications on a wide range of technology-related subjects. In addition, she has held editorial positions at several trade publications, including Electronics and InfoWorldmagazines, where she was one of two West coast editors covering Silicon Valley.

Denise runs an annual industry conference on interactive media: Spotlight, launched in 1995. Spotlight is an interesting conference. First, it focuses only on interactive media‹as Denise says, "the dreaded 'C' word, content"‹rather than on technology or delivery platforms, such as cable modems, PCs, or videogames. It is concerned only with art, commerce, and the software tools required to make the interactive media industry a reality. Though Denise does handpick some hardware to show in the demonstration area at the conference, she keeps these discussions off the stage: she believes they've become irrelevant.

Spotlight is also the first executive-level conference to focus on the interactive media industry. Denise says she "wants to bring together an incredible cross-section of people who actually can make a difference to each other‹introducing artists and creative people to those who cut the deals, green light the projects, sign the checks." At the conference, she gets attendees to step back from the daily grind and think about the bigger picture of how to make the industry work better and smarter for everyone. "In an industry this new, it is absolutely true that higher water floats more boats," she says. "The more people there are who do smart things and build smart products that people want, the larger and more successful the industry will become."

Spotlight's début last year was a success according to Denise's criteria: it was a very high-level schmoozefest and the volume level during breaks and meals was amazing. Her bottom line: "virtual, schmirtual‹seeing people face to face, buying them a drink, and engaging them in meaningful conversation is what makes people happy and is also, not coincidentally, what makes a community. I'm trying very hard to build a community in this industry, even though it's in the middle of a tornado, which is kind of how I see the Web and interactive media in general right now‹a lot of hot wind and a high likelihood that when things settle down, the wreckage that's left won't be pretty."

"I refuse to use the word content," says Denise. "It's insulting. Artists create art; writers write ideas. The word will continue to be used, though, because media has become such a huge commercial enterprise. Everything is becoming a commodity‹including art, including ideas."

Denise wants her column to make people aware of the incredible amount of hype about the interactive media industry and technology in general. "A lot of the hype is just parroting the public relations departments of Microsoft and TCI and the big media companies," she says. "Somebody needs to give people information that allows them to get to the truth. That's a very difficult thing to do with technology, because it's so difficult to understand."

She says her job is to point out lapses in logic. When everyone was talking about interactive TV in 1994, Denise was the one writing (then in the pages of Digital Media), "Excuse me? Do you have any idea how long it takes to write the kind of software you're talking about to run these systems? Excuse me! Are you expecting cable companies to install all this complex technology and then service it? The companies that pin the meter on customer dissatisfaction, and all they have to service is one stupid wire with one-way programming into someone's TV set? I don't think so! And, if we're really talking home shopping and 'interactive Wheel of Fortune' here, who cares?"

"These questions don't require a degree in rocket science. They are absolutely logical. Unfortunately, a lot of people get delirious when big media and cable companies start signing billion-dollar deals‹whether they ever happen or not‹so they don't step back and ask the larger questions. Business reporters are asked only to do the 'he said, she said' story, so they don't get to step back and question the bigger picture about whether anything about these deals is real‹the deal itself, the technology, the potential customer base, you name it."

"This is really a dirty little secret inside the industry‹everyone in Silicon Valley at least knows that most of what you read about this stuff is utter bullshit. The people who really know what's going on spend a lot of time every day rolling their eyes and saying, 'Puh-leeze, spare me!' So I guess I spend a lot of time pointing out the stuff I believe to be obvious."

"I would hope I make people who work in the industry think twice before making the same mistakes as those who have gone before them, and help them to focus on the long-term view but that's pretty difficult to accomplish in a business where people's heads are always turned by a pile of cash instead of by what the pile of cash can actually do."

Commerce is becoming important on the Net. "Clearly," she says, "there are going to be financial transactions on the Net, and that's going to drive a lot of the industry. But unless we are also able to address the social and cultural aspects of online commerce‹to look at how we are going to make people comfortable with this transition to a culture where so much of the data we receive is in digital form‹whether you can sell anything becomes moot."

Denise, who was an English lit major, began writing about the digital scene in 1984, when Stewart Alsop hired her to work at InfoWorld. She is highly respected for her ability to talk to people about technology and to get to the essence of what they are trying to accomplish. She steps back and ask the right questions: "Why do we need this? Does it actually work? Does it work now? What good is it going to do in the future? Has anybody thought this through?"

THE IDEALIST (Denise Caruso): One of the most depressing moments of my life was when I met Timothy Leary for the first time. I was writing in 1984 for InfoWorld, and he was getting involved in all this digital stuff. We got into social issues, the haves and the have-nots. I said "Well, this all sounds great, a very powerful tool, but how are you going to get it into the hands of the people who really need it?" He said, "It's just like evolution: some people make it out of the water and some don't." It was surprising that someone like Tim Leary, who is so high-minded about so many things, could be so cold about this.

Unfortunately, I have the feeling that he was right. I don't see anyone getting a break in our society. Little effort is being made to bring along anyone who's not a white male with access to lots of money. This is a mistake of colossal proportions, because anybody who doesn't think that this is going to cause a revolution at some point is nuts. My fervent desire would be to see the United States and governments around the world turn public libraries into digital learning places with good technology and unfiltered Internet access. We have to help people learn how to use the technology‹give them a free place to come and use the new tools of learning. If we don't, the consequences will be disastrous.

Communication is the fundamental activity that people want to engage in. They've always wanted to communicate with other human beings who aren't necessarily standing right in front of them. If the Net enables me to have higher and higher resolution in my communication with people‹in the sense that I can feel to an increasing degree that they are "right in front of me"‹that's a very interesting business opportunity.

I have always thought that the "killer app" for the cable and phone companies is good, cheap video telephony. Everybody wants to call their mom and let their mom see them, or let their grandmom see them, or show off the kid. As we get more bandwidth and are able to send larger and larger chunks of ourselves across wires, through the air, to each other, that is going to be important. Content as we think of it today is going to be a mere artifact of our ability to communicate.

Content was a programmer's word. When the technologies of interactive media were born, programmers though of content as "stuff" you stick on the screen, stuff that merely links you up to more stuff. But just like multimedia, the word content actually means nothing. A piece of content might be interactive media or simply digital information that you access by using your computer. If the data is a digital news story or novel, you still have to read it the way you would if it were on paper. If it's a digital movie clip, it's still a movie clip. We should call these things what they really are.

Most of the big trends in technology are solutions in search of a problem, gadgets in search of a market. The CD-ROM is a classic example. It has never been particularly good at what it was supposed to do: it is slow, breaks a lot, and CD-ROM titles are mostly incredible inanities. But people believe that CD-ROM is the Next Big Thing because of the enormous sales figures and projections coming from market researchers. They don't tell you those figures include all the CD-ROMs that come bundled with computers and CD-ROM drives‹an enormous number. I don't call these sales. A sale is when I get up out of my chair, get into my car, and go down to the store and say, "I'll take that one." That's buying something.

A percentage of people's entertainment lives are migrating onto the computer, but it's a mistake to assume that people want Hollywood entertainment on their computers. Hollywood is doing the same thing as are virtually all media companies trying to move into new media. They're mapping their former experience onto the Net. Most of it is dumb and boring. There's an imagination drought. I can count on one hand and not very many fingers the people I know who are giving serious creative thought to this new medium. It is sad because there's such an opportunity here and so many people are missing the boat by being willing to try the untried idea, the new outrageous concept.

On the other hand, this failure of imagination delights me because as a result the studios and phone companies and cable companies are making enormous investments in communication infrastructure, thinking that the Internet is the next new big thing. They're going to lose a ton of money and lots of them will back off. And when they do, we're going to be left with brand-new infrastructure, and the artists will come along and do something interesting with it. I figure ten years will go by before that happens. All these iterations are absolutely necessary‹failure built upon failure built upon failure. I don't think you can speed up that process.

The model for advertising on the Web is going to undergo a complete overhaul within the next few years because studies will finally show us what people want from the Net. Advertising will be increasingly targeted and effective and will no longer be thought of as a default business model for underwriting Web publishers. The key from a cultural standpoint will be our ability to protect our personal privacy while still allowing advertisers to serve our needs as consumers.

Women are very involved in the Net. They are invisible only because women are invisible in this culture. The women I know on the Net conduct their business there and it is a source of great power and freedom for them. You will see more and more women using the Net as a way to command power. The complexion of the Net is going to change as it becomes a useful tool for commerce available to people with a broad range of interests.

What happens when you look at an ad on the Web? When you watch television, you tend to see advertisements because you want to continue watching your program. When you read a magazine, the advertising is right next to the text, in your field of vision, so you can't avoid it. There's a synergy between programming and advertising that you don't have on the Web. The minute I click into an ad on the Web, I am engaged in a new experience‹a new kind of editorial content. My attention is no longer focused on the page from whence I came. That fact make me wonder how‹and why‹editorial and advertising will stay connected in this medium.

Sponsorship makes sense on the Web. The problem is that you have to find a way to give a sponsor value for money. It's going to have to be significantly different from the kind of sponsorship you see in broadcast media, because one of the things that's really powerful about the network is that you can give the consumers the specific information they want and cultivate personal relationships.

People who say they are making money on the Net are only making money because they're taking money from advertisers, not from customers. That money is going to evaporate when advertisers start realizing they're not getting anything. It's evaporating now. Advertising dollars are in short supply, for all media. Advertisers are looking for an opportunity to have a new relationship with a customer. They are not looking for just another place to put their name, unless they can do so extremely cheaply. Advertising on Web sites is very expensive now, and it isn't worth it unless that new customer relationship is part of the deal. If you're a mass-market vendor, the $1 million that you had for advertising ten years ago isn't going to go as far. Then you had three major networks and CNN. Now you have fifty or one hundred local channels. Sources of information and entertainment are multiplying and multiplying and multiplying. Everybody's saying that advertising will subsidize these new media, but that is just another business-plan buzzword‹like in the '80s when everyone said that the early adopters were going to buy every new consumer gadget that came along. Just like everybody else, early adopters had only so much money. They only had so much room on their shelves for personal digital assistants and videogame machines and address-label printers. The model is limited, to say the least.

If I were to talk to the moguls in the media business, I would advise them to stop investing in "the Web" and start investing in ways of using technology to improve their products and serve their customers. My heartfelt belief is that successful interactive media will come from a new generation of artists. The media moguls are, shall we say, pissing in the wind if they think they're going to make money in this interactive medium just by pouring money into it. I would ask them to examine their consciences, to examine what they're really trying to accomplish. The fundamental power of network technology is that it blows apart huge existing infrastructures because just about anyone can put a Web site on the Net and publish for an audience of millions, instantly. This distributed environment of networking obviates huge media structures. If they don't pay attention, the technology will blow them apart.

This gets to the idea of virtual community, which resonates with me, although the term has become overused. We all slide into and out of many "virtual communities." Regarding the "higher mind," I can experience the consciousness of the world sitting in lotus position; I don't need electronic communication to do that. But it soothes me when I find that kind of consciousness online; it soothes me when I hit a Web site with someone's poetry on it or I can look at digitized photographs showing someone when she was a little girl and the way she looks now. These are things that I find inspiring about the Web‹cyberglyphs, the artifacts that people leave around to say, "See, here, this is who I am. Who are you?"

THE PRAGMATIST (Stewart Alsop): The "People" column in InfoWorld was Denise's column. She hated writing it. She was always pissed off at me. Denise is an idealist.

THE GADFLY (John C. Dvorak): Denise is a Hollywood reporter, and she's got high energy. High-energy woman.

THE SEER (David Bunnell): Denise is passionate about her beliefs, to be sure. This is her strength and her weakness. When she writes about issues that she believes in, she can be very convincing. But when she lets her biases affect the way she judges technology, she is not as convincing. I wish she would focus less on nuts and bolts and more on issues because that is where she can really contribute.

THE CITIZEN (Howard Rheingold): Denise has the greatest combination of soft heart, tough, battle-hardened exterior, and wicked sense of humor. She seems to have her antennae out in a lot of places.

THE SCRIBE (John Markoff): Denise came into the computer industry with zero knowledge and has worked herself up by studying, and being in the right places, and knowing a remarkable number of people. This is a woman who's connected, who works the crowds, gets the dirt, and knows where the bodies lie.

THE JUDGE (David R. Johnson): Denise is a staunch defender of the rights of the denizens of cyberspace, extremely outspoken, and very effective in communicating her strongly held positions.

THE IMPRESARIO (Richard Saul Wurman): Tough. She's won a tough fight to gain the across-the-board respect she now garners from the industry.

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Excerpted from Digerati: Encounters with the Cyber Elite by John Brockman (HardWired Books, 1996) . Copyright © 1996 by John Brockman. All rights reserved.