Hugh Howey
Hugh Howey

Bestselling author of Wool and other books. Currently sailing around the world.

Ones and Zeros

Spoiler alert! Neo is the One.

I still get goosebumps watching the climax to The Matrix. Love heals. Right makes might. A baddie gets his comeuppance. It’s also the moment that Neo sees the world for all its details. People like Tank and Cypher can look at a screen of ones and zeros and see the world the code is meant to approximate. Neo goes one further and can see how the code constructs the world he used to live in and thought he once knew.

Once you see the code, you see it everywhere. What seems baffling makes sense in its totality. The digital revolution is hitting in all quarters at once, and while those in the trenches of any one field have a view like Tank and Dozer, it’s possible to step back and see the effects all around you. In fact, it all boils down to those very same ones and zeros.

The twin costs of manufacturing and shipping have enjoyed primacy in the economics of retail and entertainment for centuries. You have to produce things and you have to deliver them. Both have traditionally been quite expensive. The means to do either one efficiently rested in the hands of those with immense capital. The day the internet was born, this began to change. It wasn’t immediate, of course. It required bandwidth. Widespread adoption. Delivery hardware.

We can probably point to 2010 as ground zero, with an error rate of plus or minus five years. In 2009, you have Minecraft, a video game for the PC developed by a solitary programmer, Markus Persson. Minecraft has had over 100 million registered users play the free downloaded version. It has sold over 35 million copies across all platforms. In 2011, Netflix made the controversial decision to separate its DVD rental business from its streaming operation. In 2007, Steam picked up . . . momentum with the inclusion of software from giants like ID, and what became niche has now disrupted how video games are purchased. The Second Generation Kindle came out in 2009. In 2010, the price of the Kindle dropped below $200, a target seen as necessary for the widespread adoption of new technology.

Apple released the iPad in 2010, a watershed moment. At the time, only a handful of magazines like Wired were pushing hard into digital. Soon, you had to have a digital version or you were dead. Print journalism and newspapers began to see the ones and zeros in their trenches. This was the same year Newsweek merged with The Daily Beast. Within two years, Newsweek would cease print publication before being bought out and re-launched in what is considered a risky venture at best. The tremors were everywhere.

Sometime between 2003 and 2005, digital cameras overtook film cameras. The former now trounces the latter in sales and both personal and commercial use. In 2009, 1 out of 4 homes went without a landline, converting from that analog mainstay to the new digital cell phone. In 2011, comedian Louis CK self-produced a hit comedy special, selling millions directly through his website and bypassing the standard means of production and distribution. In 2008, Apple launched the App Store, which allowed solitary programmers (or small-teams of them) to publish alongside established giants. Stories swirled of the overnight success stories (along with stories lamenting the crowded field and difficulty in getting noticed).

Just last week, my wife and I laughed about how much Twitter shows up everywhere. On ESPN, a news story is followed with a quote from JimBean2783’s Twitter feed. Everyone is now a pundit. The cost of putting makeup on a talking head, lighting it appropriately, and broadcasting its yammering are now reduced to 140 characters, made up of ones and zeros and sent across the globe. In 2010, the NYT ran an article on the “problem” with website commenting. Popular Science shut off their comments last year. If this seems disconnected—more of an issue of anonymity and controversy—I beg to differ. It has to do with access. It has to do with the cost of production and distribution. How many people could or would write in to an editor in the days of print? How much space was there for commenting? Or the back and forth replies and comments-on-comments we see today? Now, the space and access are practically limitless. And the cost is almost zero.

These twin forces, the cost of production going to zero and the power of distribution expanding exponentially, are changing anything that can be converted to digital. Those twin costs were once the purview of middlemen who had enormous coffers, complex technical know-how, and a monopoly on access. None of these are any longer a concern. Last year’s best rap album, The Heist by Macklemore and Lewis, was self-produced and self-published. Over 6 billion hours of video are watched each month on YouTube. Compare that to the $10 billion the film industry took in for 2013, which translates to roughly 2 billion viewing hours for the entire year.

Walk around your mall. There are no music stores. There are no 1-hour photo developers. No places to buy those once-ubiquitous yellow boxes of 100/200/400 speed film. Waldenbooks is gone. Radioshack is shuttering over 1,000 stores, as almost no one buys and builds analog radio gear anymore. We all have smartphones and iPods in our pockets. We rush from one WiFi hotspot to another like thirsting desert nomads dying for a digital sip. Bending and aiming rabbit ear antennas has been replaced with moving toward a window and holding a phone aloft to catch a whiff of 4G.

Where once I had a blinking 12:00 on a VCR I couldn’t figure out how to program, I now use my phone to set my DVR to record a basketball game while I’m out of town. I skip the commercials. I’m more likely to buy something based on a recommendation from a Facebook friend or based on a collection of reviews on Amazon, all written by regular folks like myself. How does Consumer Reports hope to compete with thousands of hours of real-world use from thousands of real-world people? All of these disruptions are related.

Whatever field you are in, the chances are that you are being impacted by these forces. They are real and incredibly powerful. The people who think small tweaks here and there will allow them to adapt are out of their minds. Kodak likely thought this was true. Many people think their field will be immune because it’s special. The only thing that’s special is the content. In many cases, that content can be reduced to ones and zeros. The purists will claim that digital is inferior to analog. This was the argument in the camera industry. It was the argument in the music industry. But access, availability, flexibility, cost, immediacy, all trump nostalgia for the vast majority of users. And an influx of new experiences continues to delight consumers—new experiences that are only had when rules are broken and small independent developers have equal access to markets.

In today’s NYT (March 31st, 2014), you have a story about the WWE’s new digital streaming network, which grants subscribers full access to programming without the need for a cable or dish feed. This is stoking anger among traditional distribution partners, but the WWE’s stock has has tripled since the product was launched. On the same page, you have a story about the film industry’s ongoing battle with piracy. Turn to page 7 and read about the producers of the venerable American Life program considering a move to self-distribution.

The best book I’ve read lately about all of this is Clive Thompson’s Smarter Than You Think. This is an absolutely amazing page-turner, a book that should be required reading for all bipedal mammals with opposable thumbs. I read it in two sittings while on vacation a few weeks ago. If any of these trends interest you, I can’t recommend this book highly enough. You’ll read quotes about the downfall of publication going back two thousand years that sounds identical to what we’re hearing today. You’ll hear how warnings about technology destroying culture date back just as far, and again, the ancient jeremiads are identical to what you hear today (and are just as likely to be wrong).

The picture that emerges from this book and daily observations is that our digital revolution is unique, but our responses to it are predictable. They are the common responses to anything new and anything that disrupts. By the end of Clive’s book, you’ll begin to see the code all around you. It’s there, in ones and zeros, zipping through the air. It is the digital ether, a great equalizer. We are awash in it. Some feel that they are drowning. Some are hoping the weather will change. The rest of us are going for a swim.

In my industry, the product is story. Stories are made of words. If we get attached to how those words are transmitted, we run the risk of drowning. Words can be audiobooks. They can be e-books. They can be parents reading aloud or spouses reading to one another. They can come from our phones, our tablets, our laptops, our e-readers, our printed books. But they’re just words, no matter our individual preferences for a particular medium. And words can be broken down into ones and zeros and be transmitted for practically nothing to anywhere in the world.

When you step back and see this, it should make you a little dizzy. And a lot of things should make complete sense. Like how the climax of The Matrix is this unkempt cubicle worker named Neo, who pounds on his keyboard all night and has no social life, suddenly changes the world by saying a single word, “No”, to a handful of gatekeepers.

21 replies to “Ones and Zeros”

Great post. I just finished Outliers by Malcolm Gladwell based on your recommendation and I loved it. I’ll have to check out Mr. Thompson. It’s an exciting time to be an entrepreneur.

I often find myself saying, what’s next? What will technology be like in 5 years, 1 year… It’s disrupting in a cool and frightening way, but there things that remain consistent that beyond the tactics and technology keep us steady, if we focus on them, if we master them…

Like you said Hugh, words… it doesn’t matter where they are placed… on a page, readers, smartphones, direct mind feed… Words remain.

Relationships… we can connect at hypersonic, super sonic, amazisonic ways now, but at the core of relationships is communication and connection. Master that and like words, it doesn’t matter how or what, it just is.

Thinking… while we often abdicate this to technology, it is not going away, but can be enhanced with the changes that happen in our world…so long as the synapse continue to fire, we have the chance to learn anything and everything much easier and faster than before… But, the free form, on your own thoughts… thinking remains.

Thanks for the thought-provoking content Hugh!

This is a brilliant piece, Hugh. I love how you compare what’s happening in the entire entertainment industry with the Matrix because artists are starting to wake up and realize what’s really happening around them.

Yep, love it Hugh.

That music store, that one-hour photo shop, dare I say the electronics store… all of it, in your hand. The shopping mall brought all of that closer to us in the 70’s and 80’s… perhaps into the 90’s.

Now, a shopping mall is in the palm of your hand.

So is a complete publishing company, media company, office, and all of your employees (virtual, of course)… all of it… in the palm of your hand.

An amateur, and perhaps in the future a professional photography studio… in your hand.

On, and on, and on…

I suppose the next evolution will be when there is NO device needed, and everything I’ve just mentioned above plus everything else possible will just “be.” :)

Question 1: You are smartphone manufacturer (Apple, say). The price of smartphone batteries doubles (say, because of a new battery tax). Is this good news are bad news for you?

Answer: Bad news. One of your inputs has been more expensive. So your product will have to become more expensive at the same profit margin. Fewer people will buy it. Your profits will decline.

Question 2: What if the price of batteries halved (because the battery tax is repealed)? Good news are bad news for Apple?

Answer: Good news. The exact opposite of the above scenario. Input cheaper. Product cheaper at same profit margin. More people buy. More profit.

Question 3: What if you are a newspaper or book publisher, and the cost of distributing the book or newspaper went away because of the internet?

Answer: Same as Question 1. It’s good news. Your costs declined. You can sell your news and books cheaper. More people buy. More profits at same profit margin.

Ten years ago, this is how I thought it would play out. Penguin and the New York Times and the local Post Standard would all thrive because a big chunk of their costs just disappeared. But that’s not how it has gone down. Penguin and the Times came under great stress. It has only slowly dawned on me that the New York Times and Penguin and the local Post Standard are not primarily content producers. They are distributors. They print and physically transport paper. The book and newspaper industries are thriving in the digital age. Bloggers, authors, and classified ads are all doing great on the web. Just not the traditional papers, whose business turned out to be something else. Eventually I think reporters will be able to sell articles direct to consumer like self-published authors, maybe even through Amazon kdp. It’s just the paper distributors that won’t survive.

It took a bit longer than consumer still cameras, but in 2011 the big three Motion Picture camera companies, Panavision, Arri and Aaton, announced that all new camera models would be digital.

http://www.technologyreview.com/news/426387/red-the-camera-that-changed-hollywood/

Of course, top line Panaflex’s, Arri’s and Aaton are still in use, and will continue to be used to make movies for decades, just like Arri BL’s from the 80’s and even cameras from the 60’s are still in use, but it was a pretty landmark moment when digital production leapt from the experimental stage and took over as the popular format for Hollywood films.

I was a film student back when Indie film was taking over the world, NLE was a new thing and 3CCD cameras were only then becoming affordable and handheld. There were two decided camps in my film school, the “serious” film student who only worked in 16mm and the “Vidiots” who only used video and tended to straddle the lines between videography and all things computer graphic design. I’ll admit to being in the former group and I think it’s safe to say we don’t need a survey to learn who had the higher post-college employment rate in their chosen field. I’ll bet it wasn’t us film guys.

Pick up a copy of American Cinematographer, The Independent or any other film trade mag geared towards production at that time and you would have seen a regular flurry of articles decrying video and making claims that it would NEVER replace film for professional production. Would digital cameras someday take a higher resolution pic than a still camera? Sure. But to capture and process 24 (or 29) pictures a second and to do it better than film? Impossible. Would never happen. You know the rest of the story.

There’s a new anti-digital screed out from Tim Waterstone, compete with all the cherry picked stats that are supposed to imply “e-book decline” and paper fetishism that we’ve come to expect from these articles. Essentially, he “refuses to believe” that print book are in any kind of trouble.

http://www.bbc.com/news/entertainment-arts-26816884

Sure, it’s only the latest in a LONG line of such tomes but it’s beginning to border on comical when you consider how many examples of digital upheaval and change in popular media are out there for reference.

As a farmer, I think I’m safe for now. But if somebody figures out that whole food replicator thingy like they have on the Enterprise…

Don’t know how you find the time to read, analyze and write such brilliant posts along with your other schedule. Everything you said. True, and exciting. It’s all the story, and the hunger for good story never-ending….

It’s amazing, isn’t it, Toby? The trick is… Hugh’s not real. At least, the extra three digital copies that do things like travel to London, disrupt the publishing industry with incredible statistics, and write brilliant analytical posts aren’t real.

The original, 3-D Hugh just sits around his backyard in his skivvies typing new stories. Or worse!

Great post! And agree fully. It’s an interesting time and there will be many more changes ahead for delivery, but content is still king, no matter how we consume it. To quote Keanu, “Woah.”

And to channel my inner Michael Bunker…

And think that ALL OF THAT, every last BIT of it could be lost for all time with just a few little emp bursts from some dark age lunatics or one godzilla of a solar flare (like the one that just missed us recently).

Our infrastructure is still decades behind where it needs to be to protect these amazing advances.

Tis enough to make one a conspiracy theorist if thought about for more than a few moments. :-/

They’ve not even words. They go from ideas in my head to zeros and ones on my computer. The words are just there so I can check the data is right.

I should tell my editor she’s a data analyst.

I often find myself saying, what’s next? What will technology be like in 5 years, 1 year… It’s disrupting in a cool and frightening way, but there things that remain consistent that beyond the tactics and technology keep us steady, if we focus on them, if we master them…

Like you said Hugh, words… it doesn’t matter where they are placed… on a page, readers, smartphones, direct mind feed… Words remain.

Relationships… we can connect at hypersonic, super sonic, amazisonic ways now, but at the core of relationships is communication and connection. Master that and like words, it doesn’t matter how or what, it just is.

Thinking… while we often abdicate this to technology, it is not going away, but can be enhanced with the changes that happen in our world…so long as the synapse continue to fire, we have the chance to learn anything and everything much easier and faster than before… But, the free form, on your own thoughts… thinking remains.

Thanks for the thought-provoking content Hugh!

I don’t believe any ebook numbers that don’t take self-publishing or small presses into account. A huge segment of the market is ignored by the pundits. Until we have better data from distributors, it’s all a lot of guessing.

You get goosebumps, Hugh? I get tears. I’ve watched that scene dozens of times, yet I still get tears. Without that scene, The Matrix is just a lot of cool special effects. Mind-blowing effects that changed the future of special effects, sure. But not much more. That scene is what the movie is all about. It changes the world for Neo and company.

And, yes, every day more and more people are beginning to see them: the ones and zeros of our new digital world.

Very cool post! Thanks!

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