Visual Media: the Big Picture

It’s not easy to get the big picture in today’s rapidly changing world of business and investments.

We’re given only clues, such as those dropped last week when Coca-Cola hired Michael Ovitz’s Creative Artists Agency to oversee its global marketing and media strategies and Soviet President Mikhail S. Gorbachev and Russian President Boris N. Yeltsin talked to Americans in an extraordinary town meeting on ABC News.

Visual communications is the common denominator in Coke’s decision and ABC’s broadcast--global video in all its possibilities. It’s an advancing technology on which important work is being done in Japan and, in the United States, innovation of a different sort is occurring.

Coke hired CAA for some of the same reasons that Sony bought CBS Records and Columbia Pictures and Matsushita bought the film and records company, MCA. The Japanese makers of home entertainment hardware wanted to get into the “software” side, the media business.

The impulse isn’t limited to entertainment companies. Fujitsu, the largest Japanese computer maker, has been buying into computer companies around the world to further its achievements in interactive video.

In the eyes of Japanese companies, a new industry, loosely called media, will be the base of all industry in the next century.

Their vision is of computers and video coming together, turning television into a dynamic medium. Viewers will interact with the set, taking classes with learned professors half a world away. Or, more to the point commercially, they will choose and dictate how products are designed for them personally.

That’s why Coke hired CAA, a firm at the center of the business that brings together stars and scripts to produce movies, TV shows and music videos. The best advertising already employs the advanced imagery of films and MTV music videos. So Coke, which once owned half of Columbia Pictures, decided that the cutting edge for global marketing is in Hollywood, not Madison Avenue.

Also, CAA is a firm with contacts in Japan--Ovitz helped Sony buy Columbia and Matsushita buy MCA. And Japan is fast becoming the research center for visual communications.

The Japanese government is spending billions to build a video research city. Hundreds of billions are being spent to equip homes and businesses with a fiber optic telecommunications system that will allow massive flows of information.

Product innovations are multiplying. Howard Rheingold, editor of Whole Earth Review who visited Japan for research on his book “Virtual Reality,” reports seeing the new “electronic musical companion: You play drums to it, and it accompanies you as in a human duet.”

The Japanese computer market is very active, growing 30% a year. Japanese offices don’t have space for U.S.-style desktop machines, so notebook and palmtop computers are proliferating. And they’re producing breakthroughs in graphics and video, thanks to the ability to manufacture liquid crystal screens, memory cards and other minute parts with wired-in software.

“They are developing multimedia notebook computers that will be interactive on a personalized scale,” says Sheridan Tatsuno, head of NeoConcepts, his own consulting firm near Santa Cruz.

Where is American industry in all this? It’s diverse and developing. Interactive video is no mystery to U.S. companies. Intel is producing and perfecting an interactive video computer chip; there are numerous entrepreneurial efforts in the computer and movie-TV industries. But, says Rheingold, “I don’t see the vision, the big commitment. We had a space program that gave us microelectronics. Now there is no big program.”

Yet America is the subject matter of global video, Tatsuno points out--”America is social innovation.” He means that the sometimes messy working out of America’s democracy --multiracial, multiethnic, multi-everything--is what the world wants to see.

And the world got an eyeful Thursday night as ABC broadcast Gorbachev and Yeltsin answering Americans’ questions. A woman in Philadelphia asked about women’s rights in the Soviet Union, and Gorbachev answered apologetically that improvements will be made. A rabbi in Houston asked about anti-Semitism in the newly independent republics, and Yeltsin answered apologetically that it will not be allowed. It was a moment demonstrating that American culture is now global culture.

Still, hearing that visual communications is a key to global business is like the news that the universe is still expanding. It’s interesting, but what do you do with it? You use it for perspective in your business and investments. Specifically:

* You realize that in the changing computer business, U.S. leadership in software is threatened by the liquid crystal displays and other software-laden hardware Japanese companies are developing.

* You reason that if American democracy is the world’s soap opera, then Hollywood’s movie and television companies have long-term value despite the current slump in the movie and TV businesses.

And, finally, you understand that a changing world demands new approaches in business. That’s what Coca-Cola said last week about advertising; that’s what other companies will be thinking.