Luddites@communicationindustry

Luddites@communicationindustry

Sergio Mugnaini

Master’s Thesis

Luddites@communicationindustry Successful leaders can transform technological resistors into adopters.

Sergio Mugnaini

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Luddites@communicationindustry

Sergio Mugnaini

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Luddites@communicationindustry

Sergio Mugnaini

Master’s Thesis

Luddites@communicationindustry Successful leaders can transform technological resistors into adopters.

Sergio Mugnaini

Master of Business Administration Creative Leadership Class of 2008-2009

1. Supervising Tutor:

Doug Guthrie

2. Supervising Tutor:

Dr. David Slocum

Editing Time

from: February, 2008 until: July, 2009

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Statement of Authorship:

This dissertation is the result of my own work. Material from the published or unpublished work of others, which is referred to the dissertation, is credited to the author in the text.

__________________________________________________ Sergio Mugnaini S達o Paulo, 28.07.2009

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Acknowledgments

To my little big family, Andrea and Theo.

To Mugnaini family, for compassion and admiration.

To my friend Grabriela, for helping me to choose the right words.

To AlmapBBDO, encouraging and believing in my career To the Berlin School, for the exchanging of knowledge.

To Michael Conrad, for the wisdom to spread his creativity skills all around.

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Table of Contents

List of Illustrations ………………………………………………………… 11 List of Tables ……………………………………………………………..… 12 Abstract ……………………………………………………………………... 14 Research presentation ……………………..……….………….………… 15 Introduction ………………………………………….…..………………….. 16

Chapter I 1. Technology & Communication. Two disciplines, one history. A fast-forward ……………………………………………….. 22 1.1. Gentleman’s Magazine &The Sun……………………………. 23 1.2. The discovery of the Radio ……………………………………. 23 1.3. Cinema & TV……………………………………………………. 25 1.4. CBS was born…………………………………………………… 27 1.5. Test Period………………………………………………………. 27 1.6. Eniac, the first computer……………………………………….. 28 1.7. Video Games……………………………………………………. 29 1.7.1. Atari…………………………………………………….. 30 1.7.2. Nintendo……………………………………………….. 31 1.8. Microsoft…………………………………………………………... 33 1.9. Apple………………………………………………………………. 33 1.10. WWW, the network of networks was born…………………… 34 1.11. Mobile Phone…………………………………………………… 37 1.12. GSM mobile phone…………………………………………….. 38 1.13. Web Browser……………………………………………………. 38 1.14. Google…………………………………………………………… 39 1.15. Bluetooth………………………………………………………… 40 1.16. PlayStation……………………………………………………… 41 1.17. iPod……………………………………………………………… 41

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1.18. Commercial VOIP………………………………………………. 44 1.19. Wi-Max…………………………………………………………... 44 1.20. Xbox……………………………………………………………… 45 1.21. Wii………………………………………………………………... 45 1.22. iPhone…………………………………………………………… 46

Chapter II 2. Convergence zones and the speed of change……………………… 48 2.1. RCA……………………………………………………………….. 58 2.2. AT&T………………………………………………………………. 58 2.3.. Evolution, the survival of the fittest……………………………. 60

Chapter III 3. Paradigms shifts inside the communication industry…………….. 65 3.1. From Physical to virtual…………………………………………. 65 3.2. Service consumption from fixed devices to mobile…………... 65 3.3. From collective to individual…………………………………… 66 3.4. From dedicated equipment to multi-functional………………... 66 3.5. From wired communication to wireless………………………... 66 3.6. Rivalry between competitors affects the industry as a whole. From monopoly to omnipresent virtual competition....……. 67 3.6.1. It takes more than entrepreneurism to become a newcomer……………….……………… 68 3.6.2. Becoming a substitute can open doors in monopolized markets……………………………… 68 3.6.3. The power of well-informed consumers……………. 68 3.6.4. The strength of suppliers: economy of scale and distribution channels…………………... 68 3.7. From unidirectional mediums to interactive ones…………….. 69 3.8. From analog to digital medium. From 0 to 1…………………... 70

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3.9. Speed of light communication. From low to high speed……... 72 3.10. From closed to open protocols………………………………… 72 3.11. A new society is born…………………………………………... 73

Chapter IV 4. The Luddites………………………………………………………………. 77 4.1. Back to Romanticism’s old times………………………………. 79 4.2. Luddites and Neo-Luddites……………………………………... 82 4.3. Differences between Luddites and Neo-Luddites……………. 83 4.4. Distribution channels in those days……………………………. 87 4.5. The consequences of Luddism’s failure ………………………. 89 4.6. Britain’s reaction to the Continental Blockade………………… 92 4.7. England’s prosperous times: the urgent need for automation in the production line…………………….....….. 93 4.8. Luddism in today’s communication industry…...……………… 95

Chapter V 5. MadProject………………………………………………………………… 98 5.1. Research conclusions and recommendations………………... 102 5.1.1. Seamless transition and a subliminal change……... 103 5.1.2. Old school meets Generation Next…………………. 105 5.1.3. Technology is idea driven……………………………. 107 5.1.4. The dawn of a new way of doing business………… 109 5.1.5. Consumer-oriented content………………………….. 111 5.1.6. Open source of ideas…………………………………. 114 5.1.7. The importance of communication heritage………... 115

Final considerations………………………………………………………... 117 Bibliography………………………………………………………………….. 120 Addendum……………………………………………………………………. 121

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List of Illustrations

Fig. 01. Fast adoption of New Communication Devices………………….. 51 Fig. 02. Radios in Use (Worldmapper.org)………………………………… 52 Fig. 03. Cellular subscribers 1990 (Worldmapper.org)…………………… 53 Fig. 04. Cellular subscribers 2002 (Worldmapper.org)…………………… 54 Fig. 05. Internet subscribers 1990 (Worldmapper.org)…………………… 55 Fig. 06. Internet subscribers 2002 (Worldmapper.org)…………………… 56 Fig. 07. Televisions in Use (Worldmapper.org)……………………………. 57 Fig. 08. Continental Blockade (Map)……………………………………….. 91 Fig. 09. MadProject: Introduction of the website………………………….. 99 Fig. 10. MadProject: Entertainment interactive questions……………….. 100 Fig. 11. MadProject: Interactive videos…………………………………….. 101

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List of Tables

Tab. 1. The new vs. the traditional paradigm……………………………… 64 Tab. 2. Madproject questionary: Question #01…….……………………… 103 Tab. 3. Madproject questionary: Question #02…….……………………… 105 Tab. 4. Madproject questionary: Question #03…….……………………… 107 Tab. 5. Madproject questionary: Question #04…….……………………… 109 Tab. 6. Madproject questionary: Question #05…….……………………… 111 Tab. 7. Madproject questionary: Question #06…….……………………… 114

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Adendum

Google Analytics Results…………………………………………………… 121

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Abstract The first chapter of this research shall present a historical context in advertising from the nineteenth to the twenty-first century. A concise summary intends to provide an overview of advertising’s evolution with the advent of new technologies and how this has affected its professionals. The main points that shall be explored are: 1) the speed of new technologies, 2) the ways in which advertising behaves with respect to paradigm shifts in consumer behaviour, and 3) how any form or shape of communication has always been closely linked to new technologies and changes in people’s lives.

The second chapter shall explore the impact of paradigm shifts as a result of new communication technologies in consumption society and how advertising has had to adjust itself in trying to follow the transitions in the daily lives of consumers.

The third chapter shall investigate a group of people in the communication industry that is resistant to new technology by means of an interactive project called Madproject1. The end of the chapter will discuss the Luddites, who are one of the main focuses of the present research.

The fourth chapter shall present a historical analysis of the Luddites since their appearance during the Industrial Revolution until the advent of Neo-Luddites in today’s world. It shall also explore the main causes for the Luddites’ failure in the nineteenth century and also attempt at drawing some conclusions and lessons learned in order to compare them to the new-technology-resistant professionals that work in advertising nowadays.

The final chapter will be presented the interactive questionnaire called Madproject and the final considerations of this research. The goal of the work will show how successful leaders have the potential to transform professionals that are resistant to these new technologies into adopters.

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http://madproject.orgfree.com ; internet

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Research presentation Problem The present research focuses on the performance of advertising professionals who are resistant to new technologies in the modern communication industry.

The problem was analysed based on how the fast speed of new technologies directly influence people’s lives and make brands seek new ways of communicating to them. This fast pace impacts brands and companies and, in many cases, this means that they are driven to rethink their business models and the kind of advertising professional that can deliver what they need in terms of communication.

In this way, the present research aims at identifying how successful leaders can turn resistant professionals into adopters of new technologies in communication.

Moreover, it shall try and show how professionals who do not accept changes in their work habits with respect to new technologies can be convinced by these successful leaders, who are already taking advantage of new technologies in communication, if they hope to remain relevant in the current communication scenario.

Technology per se is by no means a new form of communication but rather a tool to strengthen and improve methods that have been established by advertising agencies. In fact, it is a powerful resource for advertising agencies that want to engage and take their clients’ consumers by surprise, improving strategic and creative solutions that deliver efficient brand messages.

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Introduction “In terms of industry and technique, it will be really hard for humanity to go beyond what we see here. We have reached progress’ apex. Nothing else needs to be invented.”2 This sentence was extracted from the journalist Ethevaldo Siqueira’s book, in which the author quotes the comment made during the 1900 Paris World Fair from Anatole France to Emile Zola, who was considered as one of France’s greatest writers, poets, and journalists from the last century. The sentence seems just as naïve as the one professed by those nowadays who say that technological progress has already dried up.

The world saw many things during the twentieth century. In 1920, Marconi’s radio (SIQUEIRA; 2007; p.50-51). In 1926, television’s first prototypes (SIQUEIRA; 2007; 68-69). In 1946, the first studies on computers and in the following year, on transistors (SIQUEIRA; 2007; p.131). In 1959, microelectronics got the integrated circuit (SIQUEIRA; 2007; p.161). In 1971, the microprocessor or chip (SIQUEIRA; 2007; p.206). Two years before that, in 1969, the world watched live on TV when man reached the moon, and in 1972, television that used to be black and white became colourful (SIQUEIRA; 2007; p.208-209). Video games, which had been created in 1971 for the first time3, received a new boost with the arrival of new players such as Atari in 1972 (SIQUEIRA; 2007; p.204). and Nintendo in 19744. Technology’s history in the world and in people’s lives underwent an enormous change with the arrival of two companies. In 1975, Apple5 opened its doors and in almost in the same time, officially in 1976, Microsoft6 became its rival. In 1982, the CD (SIQUEIRA; 2007; p.248) came into existence and in 1990 the world watched what is perhaps new technology’s greatest accomplishment, the World Wide Web (SIQUEIRA; 2007; p.274), making people take part in the process. In 2000, there was broadband. In the majority of the countries, internet became a new way of dealing with urban life, and people started getting together, shopping, selling and creating their shared interests in online communities. In the new virtual space, on the second semester of 2007 (SIQUEIRA; 2007; p.321),

2

Ethevaldo Siqueira, Revolução Digital: história e tecnologia no século 20 (Digital Revolution: history and

technology in the 20th century in English) (São Paulo: Editora Saraiva, 2007), 321.

3

Accessed 12 September 2008; avaliable from http://en.wikipedia.org/wiki/Video_game#History ; internet

4

Accessed 10 September 2008; avaliable from http://en.wikipedia.org/wiki/Nintendo#History ; internet

5

Accessed 11 September 2008; avaliable from http://en.wikipedia.org/wiki/Apple_Inc ; internet

6

Accessed 5 July 2009; avaliable from http://channel9.msdn.com/shows/History/#Page=2 ; internet

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more than two billion people were getting together at any time they wanted, exchanging information, having fun, buying and selling, visiting newspapers’ sites, magazines, radios, TVs, electronic libraries, search engines containing billions of pages and even virtual encyclopaedias, such as the Wikipedia, that reached more than five million articles in almost 300 languages, created and fed by the users. Using IP (VoIP), today more than 300 million users (SIQUEIRA; 2007; p.321). make phone calls anywhere in the planet almost for free through Skype.

All of this includes the world’s mobile revolution. There are already almost three billion mobile phones in the world, the majority of them with inbuilt digital camera, Wi-Fi access to broadband networks and to the mobile electronic commerce. Not to mention the impact generated by Apple’s iphone in the past years, that has reinvented the way people relate to such devices because until then the phone was meant to provide communication via voice only. Nowadays, mobile devices support multiple platforms and stimulate people’s curiosity about what is going to be around the corner tomorrow.

The world is undergoing the digital convergence era, an irreversible process that blends platforms, shifts paradigms, especially in the communication industry where the use of technology has become a premise for success. It unifies different sectors and creates self-regulating services that do not depend on license or protective legislation. Just imagine the impact of the digital revolution ten years from now. And for the youngest ones, what will the world be like in forty years? Without question of a doubt, these changes will be as profound or more than those we have seen for the past decades. Steven E. Jones, one of the most renowned authors on the technology resistant people known as the Luddites, says: “...that technology is the central fact of the modern global economy – will often help to define their status, determine their livelihoods, and shape their work and leisure time. This is not about having specific technical skills – I’m not talking about engineers and computer science graduates. It’s about the willingness to buy into two widely shared assumptions: (1) that technology’s place in our daily lives is central; and (2) that it will inevitably increase in the future”.7

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E. Steven Jones, Against Technology. From the Luddites to Neo-Luddism (New York, NY: Routledge,

2006), 2.

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Fast technological development, mainly using new ways of communication, which is the focus of the present research, has allowed the creation of new communication channels between brands and people, increasing the touch points between them. Companies had to learn how they could use the news technology forms that people were already enjoying in their everyday lives. A deeper analysis of communication’s historic context shows us that in 1842 advertising became professional mainly via the sales force in newspapers that used to work for a commission Still in 1842, Volney B. Plamer was the first to open his doors as an advertising agency8 The advent of new technologies and new communication media caused some channels to become obsolete and others to thrive rapidly. In 1833, when the main advertising vehicles were newspapers and magazines, The Sun, a NorthAmerican newspaper, surprised the world when it launched its first “penny newspaper”, at a cost of 10 pennies9. After the radio had been invented in 1920, lots of companies started to buy advertising space in the main radio stations and in 1938, investments in radio media exceeded those of newspapers and magazines10, mainly because of the soap-operas that had been created by Marcel Bleustein in 1935, at his Radio-Cité in France (PINCAS AND LOISEAU; 2008; 51) In 1954, CBS – Columbia Broadcast System, was considered the biggest communication vehicle in the world. Television is still the most successful format inside the communication industry but it is possible to imagine great changes in the horizon when we consider people’s consumption habits in the new mediums.

In 1993, there were five million internet users and nowadays there are more 1,596,270,108 billion people11 connected not only through their computers but also through their portable devices.

One of the most important issues considered in the present research is the rapid pace of these changes. Mainly after the creation of the World Wide Web in 1990, the world has been sharing an increasingly higher amount of information,

8

Stéphane Pincas and Marc Loiseau. A history of Advertising (Tashen, Los Angeles, USA, 2008), 25 9

Advertising Age, Accessed 5 July 2009; avaliable from http://adage.com/century/timeline/index.html ; internet 10

Advertising Age, Accessed 5 July 2009; avaliable from http://adage.com/century/timeline/index.html ; internet 11

Miniwatts Marketing Group, Internet Usage Statistics - The Internet Big Picture, World Internet Users and

Population Stats, 2009 (Bogota, Colombia, 2009, accessed 28 June 2009); available from http://www.internetworldstats.com/stats.htm; internet

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empowering users to transform information into knowledge. The author Don Tapscott mentioned in his last book that “The teacher is no longer the fountain of knowledge; the Internet is”.12 How far can human beings assimilate and accept all the technological changes imposed by people themselves? They will be able to accept paradigms shifts in their lives and, as a consequence, the communication industry will need to review these paradigms when it comes to the way it communicates with them. The pace of change is quicker than humans are able to accept new things, in other words, quicker than it is possible to assimilate new technology in their lives and in the way they are impacted by communication.

In his book, the author Don Tapscott analyses some of the main impacts technology causes in people’s lives.

More and more, people want greater

freedom of expression, of thinking. Sharing these thoughts with other people regardless of the repercussion they might have in the net. Freedom to choose when to watch a film, interact with a brand, use a service. Freedom to perform a task whenever it is convenient for the person and not for the company, because people have learned to use technology in their favour.

Much more than just a product or service for people, with new technology it is possible to obtain something personalized. Customers want to be able to customize their options. They want to collaborate with other people, generating new fun and entertaining experiences. Moreover, people are much more aware of a company’s transparency policies because nowadays it is possible to get loads of information on a product in a matter of seconds. Speed and innovation are at a level never seen before.

The eight norms analysed by Don Tapscott – freedom, customization, scrutiny, integrity, collaboration, entertainment, speed, and collaboration –will be frequently used throughout the present research to talk about people lives’ paradigms shifts and communication’s paradigms shifts due to technological changes.

However, one of the most debated issues amongst technology professionals and sociologists is human beings’ natural resistance to change, as described by Jan Harrington in his book “Technology and Society”13. The book offers a broad and

12

Don Tapscott, Grown Up Digital: how the net generation is changing your world (Columbus, McGraw-Hill

Books, 2009), 126.

13

Jan Harrington, Technology and Society (Sudbury, Jones & Bartlett Publishers, 2008) 73.

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balanced perspective on the impact technology has caused on our society since the Industrial Revolution, which was when the Luddites came into existence in England, a group of people who were resistant to technology. Their movement was so strong that until nowadays the term Luddite is used to describe anyone who firmly opposes technology.

Moreover, in his book Harrington also states that it is possible to notice “how technology has shaped human civilization and how civilization has shaped technology”14. In order words, it is clear that technology definitely influences people’s lives and that the latter ends up creating new ways of using it and communicating through it.

So what happens to people who do not want these changes, especially inside the communication industry? Throughout history, professionals from other industry sectors created efficient business models by using their time’s sophisticated tools and now some professionals inside the communication industry simply do not see the need for change. Would this be a romantic interpretation on the subject or the wish not to risk or change the established status quo?

To investigate the possible causes of this resistance to new technologies within the communication market, the job will count on an internet research entitled "MadProject15". Following the history investigation line, the questionnaire, set within an entertainment research, this research can be performed in over 35 countries.

The research seeks to understand how the consumer changed and what communication, combined with the advent of new technologies, did to continue surprising people. It is the main challenge of modern communication: knowing and understanding how to talk to people nowadays.

The hypothesis of this project is to work the strength of professionals who do not accept the new technologies. Noting this fact, it is as a challenge to the leaders of the current communication market to reposition these professionals to the market.

It wasn’t and won't be the last time a group will resist technological changes, regardless of the market or the group researched in this project.

This research project will trace a parallel between the men that resisted the technology of the past with the present communication professionals that resist

14

Jan Harrington, Technology and Society (Sudbury,Jones & Bartlett Publishers, 2008), preface.

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Accessed 10 May 2009; avaliable from http://madproject.orgfree.com; internet

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new technologies. The job will be based on a historical summary to learn about the past with the objective of adapting the thought to the present; and somehow try to identify some trends and forecasts for the future of communication.

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Chapter I I - Technology & Communication. Two disciplines, one history. A fastforward.

In order to better understand technology’s and communication’s process in the beginning of the 20th century, it is useful to make a small retrospective of the technological scenario at the end of the 19th century. The electrical telegraph invented by Samuel Morse in 1844 (SIQUEIRA; 2007; p.12) was the seed of the Industrial Revolution, which adopted the first binary language in communication, since the Morse code is represented by dots and dashes only. However, at this time, digitalization’s hegemony was still a long way away, having thrived only in the second half of the 20th century, with the advent of computers and transistors.

Thomas Edison is the most famous inventor from the last quarter of the 19th century, having offered to the world the incandescent light bulb and the recording of sound on disc (gramophone), besides dozens of other inventions. In 1884, a German man called Otto Merghenthaler invented the linotype, a text machine with metallic types melted on the spot by the operator. Petroleum and coal were the great energy sources. The automobile was already a reality at the time, although its production was still in its semi-handcrafted stage.

The world in 1900 had 1.6 million inhabitants (SIQUEIRA; 2007; p.12) and it was on the brink of the century when electricity and communication would blossom.

Although Europe was enjoying a relative peaceful period, there were serious conflicts happening elsewhere in the world: in China there was the Boxer Rebellion, in South Africa there was the Boer war, which begun in 1899 and ended only 1902. Cuba had just been born as an independent country after the Spanish-American war in 1898.

Parallel to the technological innovation scenario in the 19th century, it is important to note that communication was undergoing the same innovation. Newspapers were probably the first written and most common means of communication. In ancient Rome, the government announced the bulletins written by Julius Caesar to the citizens on sculptured stone or metal plates placed in public places. In China, central and local government produced news on sheets called tipao, which carried official announcements during the Han Dynasty (206 BC-220 AD).

Between 713 and 734, Kaiyuan Za Bao (“Justice Tribunal Bulletin”) from the Chinese government published news from the Tang Dynasty. It was handwritten on silk and read by the government staff. In 1556, the government in Venice

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published the first monthly publication called Notizie scritte, which cost one Gazetta16. These newspapers rapidly spread news on politics, economy and the military throughout Europe, more specifically in Italy during the beginning of the modern age (1500-1700).

1.1 - Gentleman's Magazine & The Sun Much before the 19th century, Europe was pioneer in terms of the print communication vehicle when the first magazine was created: Gentleman’s Magazine. It was published for the first time in 1731, in London, and it is considered the first general interest magazine. Edward Cave was “Gentleman’s Magazine” editor using the pseudonym “Sylvanus Urbana”, and he was the first to use the term “magazine”, coined after a military storehouse of varied material, originally derived from the Arabic makazin that meant “storehouse”17.

Back to the daily periodicals, in 1833 Benjamin Day published The Sun, the first successful “penny newspaper” in New York. In 1857, it reached 30,000 issues, becoming the world’s biggest newspaper18. In 1842, Volney Palmer opened the first advertising agency in Philadelphia. Advertising was emerging as a new profession. The work of newspaper sales representatives was negotiated by commission. This format had first appeared in Europe, but it was the United States that created the term advertising.

In 1906, the world was introduced to one of the biggest brands ever created: Coca-Cola. The brand was one of the first to present campaigns on the main print vehicles created by the legendary agency D’Arcy. In 1914, Coca-Cola created one of the formats that remain until now one of the most popular in advertising: magazine’s front and back covers. At the time, the power of words illustrated ads that conveyed the concept in long copy.

1.2 - The discovery of the radio Around the world, the main engineers were taking the first steps towards innovation and technology. In 1920, Marconi presented the radio to humanity.

16

Accessed 11 April 2009; available from http://en.wikipedia.org/wiki/Gazette; Internet.

17

Accessed 11 April 2009; available from http://en.wikipedia.org/wiki/Magazine#cite_note-0; Internet.

18

Accessed 11 April 2009; available from http://adage.com/century/timeline/index.html; Internet.

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Gugliemo Marconi was one of the biggest geniuses of electronics in the 20 th century. Through

his inventions, the

world

experienced

the

boom

of

communication. Radio became the most popular communication medium in the first half of the century and enjoyed its golden era.

A prodigy child, Guglielmo Marconi was the second son of Giuseppe Marconi, a rich Italian banker, and Annie Jameson, an Irish housewife. A magnificent life that begun on April 25, 1874, in Bologna, Italy and ended on July 20, 1937, in Rome, when he was 63 years old.

Since he was very young, Marconi was interested in Physics and Electricity, dedicating special attention to the works of Maxwell, Hertz, Righi and Lodge, amongst others. The year of 1894 was to become a mark in his life: an article about the electromagnetic waves discovered by the German Heinrich Hertz arrived in his hands. His potential intuition foresaw that these waves could be transmitted by signals.

Initially, Marconi used Hertz’ discovery to produce radio waves, building a device called “cohesor” to detect them and convert them into electric current. With time, he improved both the receptor and the transmitter and concluded that by lifting a wire isolated from the ground in the shape of an atenna he could get better signal emission and reception.

When he was only 22, he transmitted the “S” from the Morse alphabet to his brother Alfonso. The Italian government, to whom the inventor had offered his patent, was not interested in the experiment. But Marconi did not give up and went to London with his mother. In 1897, he enjoyed utmost success when his demonstration reached a distance of four kilometres.

In 1900, Marconi obtained the famous patent number 7777 to “tune in telegraphy”. Between 1902 and 1912, he obtained the patents for other inventions. During a visit to Buenos Aires, he managed to transmit a concert that took place in Teatro Coliseo on August 27, 1920, using antennas from the theatre. Tens of reception devices scattered around town received the radio signals and witnessed the first public demonstration of radio transmission in South America.

On November 2, 1920 KDKA was launched in Pittsburg, the first commercial radio station in the United States and, probably, the first in the world. It started its activities by airing news on the presidential elections that would happen that year, with the victory of the Republican Senator Warren Harding and the defeat of the Democrat James Cox. At the station’s studio, only four men operated all

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the equipment and prepared the text for the news. A newspaper protested: “This radio station, or radiotelephony or whatever is not worth any comments”19.

Another newspaper predicted that the advertising on radio stations would not only be inefficient but also offensive to the public. To prove them wrong, WEAK radio station from New York aired the first paid advertisement in 1922, for a client named Queensboro Corp, a real state company from Long Island, and the spot cost the staggering US$ 50 for the total of 10 minutes.

During the 1930s Guglielmo Marconi begun to do research on the propagation of even shorter waves. The result of this new phase in Marconi’s scientific life was the launch of the first radiotelephony with microwaves in the world, which happened in 1932. This was how he managed to connect the Vatican to Castel Gandolfo, the place where the pope used to spend summer. Two years later, Marconi applied the microwaves to navigation and in 1935 he demonstrated the radar’s principles.

1.3 - Cinema & TV Parallel to the radio success, the cinema industry invested in technology and in 1925 the Cinemascope came into existence, which was the widescreen technique for the cinema. On the following year, in 1926, the world was introduced to one of the greatest technological inventions of the 20th century after the radio, namely the television. Television was invented in two different parts of the world by two researchers. On one side, there was the Scottish John Logie Baird and on the other there was the American Philo Farnsworth, each of them working separately and without being aware of the each other’s projects.

On April 1926, Baird showed his invention – the radio television – transmitting images between two different rooms at the Royal Institution and, in February 1927, he transmitted an entire program from London to Glasgow. Born in Dunbarton, Scotland, on August 13, 1888, Baird studied at the Larchfield Academy at the Royal Technical College and then at the University of Glasgow.

In 1924, he produced TV images with object’s outlines, recognizable human faces on the following year, and then, in 1926, images of objects that were

19

Ethevaldo Siqueira, Revolução Digital: história e tecnologia no século 20 (São Paulo: Editora Saraiva, 2007),

52.

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moving at the Royal Institution in London.

In April 1925, Baird installed his equipments at Selfridge’s department store in London for three weeks, having made the first demonstration of mechanic television to the British people. The image was formed by 30 lines, with five frames per second. Even though small (approximately 5 per 4cm), and showing an image that was trembling and not really sharp, it allowed the identification of people’s faces.

On October 2, 1925, Baird discovered the flying spot principle, in which the image was lit up by an intense beam of light that swept the scene in 30 vertical lines. The inventor registered his patent on January 20, 1926, and a few days later he presented his discovery to the members of the Royal Institution in his London lab. This was the first public television demonstration in shades of gray.

On the other side of the Atlantic, the other inventor of television, Philo Taylor Farnsworth, developed the basic requirements for a television electric system when he was still in high school. Intuitively, he had realized that the mechanical method wasn’t fast enough to produce a sharp image of a live event. In magazines, he became aware of the cathode ray tubes and of how beams of electrons could be manipulated in magnetic fields.

Farnsworth’s system’s basic concept was similar to another television Pioneer, the Russian immigrant Vladimir Kosma Zworykin (1899 – 1982), who was a researcher at the Radio Corporation of America (RCA); it entailed first focusing the image with lenses that were placed in one of the ends of a cylindrical tube, on the other end, there was a plate with several photoelectric cells, and then sweeping the electric image formed by the cells.

But there was a difference between the two systems: Zworkyn’s used a beam of electrons to sweep the image, while Farnsworth’s used a small cylinder, the size of a pen, with an opening. The luminous image was turned into electric impulses inside the camera’s tube and then reconstructed in a cathode ray tube, used as a receptor. Due to the “image persistence on the retina”, the human eye would receive the image, that would then repeat itself several times as a solid image.

On March 5, 1926, after a report had concluded that the American radio fusion model was not adequate for the United Kingdom, the British Broadcasting Corp. was born, later becoming a State company known as the BBC. In 1927, the radiotelephonic service between New York and London was launched. During that year, the service became available for all telephones in the Bell System that operated in the United States, Canada, and Cuba. Telephone

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calls were made using short waves, suffering all the risks in terms of interferences and instabilities. Magnetic storms, solar stains or even heavy rain affected the quality of transmissions.

Just like it had happened with the telephone, the radio also underwent a period of worldwide expansion. On May 21, 1927, for the first time ever, a radio program reached a worldwide audience when programs from the 2LO English radio station were retransmitted in short waves from Holland by Phillips. News and latest cricket results were aired and heard simultaneously in India, Australia, New Zealand and South Africa. Phillips’ success stimulated the BBC to start its worldwide transmissions. On that same year, Bell Labs performed several demonstrations of television image transmission via cable between Washington DC and New York. On the afternoon of April 07, 1927, images were transmitted via radio between New York and Whip-pany, New Jersey.

In 1941, AT&T performed the first experimental transmission of images from a cinematographic film using coaxial cable between New York and Philadelphia.

The TV image had 240 lines.

1.4 - CBS was born In 1928, a 27-year old young executive from the cigar industry, William S. Paley, founded the Columbia Broadcasting System (CBS). The network has its origins in United Independent Broadcasters Inc., a collection of 16 radio stations that was bought by William S. Paley in 1928 and renamed Columbia Broadcasting System. Under Paley's guidance, CBS would first become one of the largest radio networks in the United States and then one of the three biggest American broadcast television networks. In 1954, CBS became the biggest advertising vehicle worldwide.

1.5 - Test period The years between 1921 and 1940 were a hard period due to consecutive wars and the Great Depression that shocked the structures of Western economies. In the United States and Europe, the 1920s were very productive years, but in 1929 there was the Dow Jones crisis. On a single day, indexes that were reaching 381 points rapidly fell to 230. Recovery and recession lasted until 1932. Until then, indexes accumulated losses of 90% in relation to 1929. Inflation had already

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been negatively affecting the economies of the German language world and other European economies later on, with consequences that were felt until the Second World War. Advertising survived, but at a cost. Considerable changes were seen in the way advertising was done, increasingly less emotional and focused on hard-sell.

Product prices were constantly mentioned. Advertising became all about comparison, competition and promotion and the aesthetical sophistication that had flourished in the 1920s was put on hold. The focus was to overcome consumers’ apathy.

Despite all troubles, this period was marked by the arrival of an important innovation in North America and Europe, mainly in radio stations: the soap opera.

In Spain, for instance, fifteen radio stations were created in 1924. In France, in 1935, Marcel Bleustein launched Radio-Cité. Some issues that were then raised remain relevant until today. What kind of content should be created for this new medium? What were the new advertising formats that should be created? One of them was the soap opera, a series of dramas or comedies. The soap operas were specially created by advertising agencies to promote brands. The same format would become very popular on TV a few years later. In 1938, radio advertising revenues surpassed those of magazines. This was when the second Industrial Revolution took place. Oil and electricity economy could create new technological boundaries for humanity.

1.6 - Eniac, the first computer February 14, 1946, was a historical date for the world’s digital revolution. On that day, the University of Pennsylvania presented Eniac (Electronic Numerical Integrator and Computer), the world’s first electronic computer, that had been active since 1945. Eniac’s 18 thousand valves produced an unbearable heat. The same amount of kilowatts consumed by a town with 5 thousand inhabitants was needed to cool the machine and its surroundings. It cost approximately US$ 20 million – or the equivalent to almost US$ 1 billion in 2007. Eniac was first built to calculate the shooting boards from the American Marine Artillery for The United States Army Ballistics Research Laboratory.

During the Second World War, several digital electronic computer projects contemporary to Eniac were developed. Some of them that deserve to be highlighted are Harvard University’s Mark I, the English Colossus, and the

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Selective Sequence Electronic Calculator (SSEC), which was developed by a group of scientists headed by Wallace J. Eckert, supported by IBM. Thomas Watson, IBM’s president at the time, presented the SSEC to the public on January 27, 1948, as the company’s contribution to the “science world”. The SSEC was considered by some specialists as “the world’s first analytical operating computer for general use that had stored instructions”20.

1.7 - Video Games Between the 1950s and 1970s, technology was driven by computers and stimulated several scientists in the quest to go beyond progress. To some extent, these scientists encountered entertainment. In 1958, the majority of computer games came from the United States universities’ mainframes, which were developed by some scientists as a hobby. Between 1959 and 1961, the MIT (Massachusetts Institute of Technology) developed a series of interactive graphic programs using TX-O, the university’s first computers.

In 1961, a group of scientists from the MIT, that included Steve Russell, programmed a game called Spacewar! in the DEC PDP-1, a new computer at the time21. In the game, two human players, each controlling a spaceship capable of firing off missiles, played against each other while a black hole in the centre of the screen presented great danger to the game. The game ended up being distributed with DEC new computers and sold in what was then the primitive internet. Spacewar! is considered as the first influential computer game.

In 1966, Ralph Baer created a simple video game called Corndog that was shown on television. It was the first experiment ever to combine television and computers. With Baer’s help, Bill Harrison created the first game based on fire weapons, having developed several games with Bill Rusch in 1967. Ralph Baer continued his work and in 1968 finished a prototype that originated several table tennis and shooting games.

In 1969, AT&T’s computer programmer Ken Thompson created a game called Space Travel, using MULTICS operating system. This game simulated several bodies in the solar system and the game’s movements as well as the player’s

20

Ethevaldo Siqueira, Revolução Digital: história e tecnologia no século 20 (São Paulo: Editora Saraiva,

2007), 131.

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Accessed 12 April 2009; available from http://www.cedmagic.com/history/dec-pdp-1.html; Internet.

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simulated a spaceship landing. A group of researchers headed by Ken Thompson and Dennis Ritchie created an operating system for the DEC PDP-7 computer in a project called Uniplexed Information and Computing System (Unics). Later on the system would be renamed Unix22.

1.7.1 - Atari In 1972, Nolan Bushnell and Ted Dabney founded Atari Inc. A pioneer project that aimed at creating console games, and home computers. The company’s products, such as Pong and Atari 2600, helped to define computer as a means of entertainment in the late 1970s and early 1980s.

In 1971, Nolan Bushnell and Ted Dabney founded an engineering company called Syzygy Engineering, which projected and built the first arcade game – Computer Space for Nutting Associates. On June 27, 1972, Atari Inc. was incorporated and Al Alcorn was hired as the group’s first engineer. Bushnell allowed Alcorn to test his skills in a version of the Magnavox Odyssey’s Tennis arcade game that would be called Pong. Although Bushnell incorporated the Atari Company in June, 1972, the process was never formalized. Parallel to the Atari incorporation by Bushnell’s company, he discovered interesting Japanese words in the millenary game Go. One of them was “Atari”. In the game Go, the word Atari meant a state in which a stone or group of stones was under the risk of being taken by the opponent. In Japanese, the verb “ataru” means “to hit the target” or “win the lottery”. The choice of a brand named Atari was certainly more adequate than one named Syzygy to most markets in terms of spelling, pronunciation and name recognition potential. Atari was incorporated in California on June 27, 1972.

In 1976, Bushnell used an engineering company called Cyan from Grass Valley to produce a console video game capable of reproducing the four games Atari had already developed. The result of the efforts was Atari 2600, one of history’s most successful consoles, sometimes referred to as VCS Video Computer System. Bushnell knew he had great potential in his hands, but commercializing the machine in the market would be very expensive. Having external investors in mind, Bushnell sold Atari to Warner Communication in 1976, for approximately

22

Ethevaldo Siqueira, Revolução Digital: história e tecnologia no século 20 (São Paulo: Editora Saraiva,

2007), 194.

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US$ 32 million, having used part of the money to buy Folgers Mansion. Nolan begun to disagree with Warner in relation to the company’s focus, the extinction of the Pinball division and, during a heated argument between Nolan Bushnell and Manny Gerard, the latter said that Atari 2600 should be discontinued. Nolan was fired on December, 1978.

The initial team had taken three years to develop the 2600. So it was time to project a new version as successful as the first one. New computers and home machines were being launched using new technologies, incorporating a keyboard to the system. Strong competition came from Apple II that until then was more attractive than Atari’s new computer-videogame version. In 1980, Atari 5200 was launched based on two known models, the 400 and the 800, both without keyboards.

According to Warner, Atari Inc. had its biggest success selling millions of 2600s and computers. At its best, Atari represented one third of Warner’s annual revenue and it was the company that had the fastest growth in the United States at the time. However, Atari Inc. faced problems at the beginning of the 1980s.

Atari’s computer development, 2600 console videogame, and the arcade division functioned separately from on another, and collaboration was rare. Faced with fierce price competition and the war of console games and home computers, Atari could never repeat the success reached by 2600 23.

1.7.2 - Nintendo Nintendo has been producing video game consoles and portable consoles since 1977. The consoles known as “colour TV Game” were the first to be created in 1977. Year after year, Nintendo has been producing not only home consoles but also other models such as: Nintendo Entertainment System/Famicom in 1983; Super Nintendo Entertainment System/Super Famicom in 1990; Nintendo 64, also called N64 in 1996, Nintendo GameCube in 2001 and nowadays Nintendo Wii, launched in 2006. The most well-known portable consoles are: Game & Watch from 1980, Virtual Boy from 1995, Nintendo DS from 2004 and the most recent Nintendo Dsi from 2009.

In 1974, Nintendo distributed Magnavox Odyssey in the “colour TV Game”

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http://en.wikipedia.org/wiki/Atari#Atari_Inc._.281972.E2.80.931984.29; Internet.

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platform. At the time, Nintendo produced four different types of consoles, each one for a specific style of game. For instance, the “Colour TV Game 6” model had six versions of the game “Light Tennis”. During that same period, Nintendo hired a developer named Shigeru Miyamoto. Before Nintendo, Shigeru had worked at Yokoi and his first job was developing a series of games for TV consoles.

Miyamoto was responsible for the creation of Nintendo’s greatest games and was considered one of the most important people in the video game industry at the time.

In 1978, Nintendo extended its participation in the video game industry by launching a few titles under the “arcade video game” platform. More than just consoles, an arcade game was a machine built for a specific game, similar to the famous pinball games. The company had enjoyed considerable success in this sector; however, the launch of the “Donkey Kong” game in 1981 changed its future radically. Nintendo watched its revenue increase exponentially, revenue that came not only from the creation of a successful game but also from several licenses and from the game sales to other platforms such as Atari, Intellivision, and Coleco Vision.

In 1983, Nintendo launched “Family Computer home video game”, also known in Japan as “Famicom”, accompanied by the company’s most popular games until then. In 1985, the console was launched in North America under the name “Super Mario Bros”, the most sold video game in history until 2009. Taking advantage of the game’s enormous success, in 1989 the brand launched a new portable console called Game Boy. So the game was not only in the homes but also in people’s hands via a portable console.

The most successful console nowadays, namely Nintendo Wii, uses an innovation that had never been seen before in the game industry, known as “motion sensing controllers”, besides presenting other features such as wi-fi internet connection, which allows people to play online in a multiplayer platform.

Nowadays, Nintendo has the most complete line of video games in the market. In the home video games platform, it is well represented by Nintendo Wii that owes its success to the playability innovation and to the possibility of having a richer game experience with other people. The console’s new versions, such as the “Wii Fit”, allow people to use the platform not only for entertainment, but also as a means of exercising. It has been used by Medicine in the field of physiotherapy recovery treatments and rehabilitation for elderly people. In the future, Nintendo hopes to use the game for educational purposes. In the portable console

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segment, the most successful console is Nintendo DS, which comes with two screens. The bottom screen has “touchscreen” and online features, whereas the upper screen presents the game’s history in a rich interactive experience 24.

1.8 – Microsoft Microsoft was created in 1975 by William Henry Gates III, best known as Bill Gates, and it is considered as one of the most profitable companies in history.

The profit comes mainly from Windows and Microsoft Office Suite. However, the brand offers a broad range of other profitable services such as software license and new service and product development.

Founded to develop and sell the “BASIC” program for the “Altair 8800” computer, and in the 1980s, Microsoft ruled the home computer category when it turned the BASIC platform into the MS-DOS. Following MS-DOS, in 1985 Bill Gates presented to the world the most used home computer platform ever: Windows.

Bill Gates used to say that his goal was “to get every workstation running our software onto every desk and eventually in every home”. In several ways, one can say that the promise has been kept for many years until nowadays. Not only Microsoft products are on every desk but also in TV sets via MSNBC cable television channel, and in the news portal and internet service called MSN.com.

The Internet Explorer allows internet users to surf the World Wide Web, and school libraries can access “Microsoft Encarta multimedia encyclopaedia”.

Microsoft has also been present in the main entertainment platforms with products such as “Xbox” since 2005 and in the music industry with “Zune” since 2006.

In 1986, Microsoft stock went public and its price went up considerably, making Bill Gates the richest man in the world25.

1.9 – Apple Apple was established on April 1, 1976, by Steve Jobs, Steve Wozniak, and Ronald Wayne to sell personal computer kits. In the beginning, they were

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25

Accessed 30 April 2009; available from

http://en.wikipedia.org/wiki/Microsoft#1975.E2.80.931984:_Founding; Internet.

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handmade by Wozniak and were first presented publically at Homebrew Computer Club. The first Apple computer was sold with a single circuit board, a CPU and RAM memory. There was no visual display at the time and it was sold in the market for US$ 666.66.

Since then, the company has made its name by developing personal computers called Macintosh, iPod, and most recently, iPhone. As time went by, Apple created its own operating system called “MAC OS X”. With respect to the entertainment and music platform, the brand reinvented the phonographic industry when it created “iTunes”, inventing history’s first “media browser”.

Having as its core mission the creation of tools that can maximize creative development, the brand has created several software such as “iWork”, “iLife”, and production and editing software such as “Final Cut Studio”. Nowadays the company has more than 250 exclusive stores around the world plus its online platform, where it is possible to buy and sell all brand products.

Based on Cupertino, California since its foundation, the company creates ways and innovations that stimulate human beings in their quest for things that can transform their lives. Nowadays Apple has approximately 35,000 employees worldwide and annual revenue of around US$ 32.48 billion.

Apple bases lots of its innovations on the products’ aesthetic aspect, making them increasingly more desirable. As a consequence, in 2008 Fortune Magazine elected the company as the most admired in the United States26 1.10 - WWW, the network of networks was born On November 12, 1990, the physicist Tim Berners-Lee concluded his formal proposition for the World Wide Web, the network of networks. On the following day, he wrote his first line in HTML, describing the project. WWW becomes a synonym for internet, in other words, thanks to the hyperlinks; the new visual of a document can now promote functionality. The internet has been a phenomenon since the 1990. Data from the International Communication Union state that by the end of 1990 the Web had less than 40 thousand servers worldwide and by the end of 1999 it had more than 76 million. In terms of number of users, it went

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Accessed 30 April 2009; available from

http://en.wikipedia.org/wiki/Apple_computers#1976.E2.80.931980:_The_early_years; Internet.

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from a few thousand to more than 500 million.

Going way back to the origin of all networks, the first and most simple one was born in 1844, when the American engineer Samuel Morse invented the electric telegraph and interconnected two machines that transmitted coded text messages using the Morse alphabet, formed by dots and dashes. Surprisingly, the Morse code used in telegraph is a binary language, i.e., formed by only two elements. Dots and dashes.

The first telephone appeared in 1876, and thus the world had a new network for voice communication. The telegraph and the telephone were the two big networks available to the world at the beginning of the 20th century.

The first and most simple computer network was born from an experiment on November 21, 1961. On that day, two computers were interconnected from a distance of tens of kilometres, one of them in Boetler Hall, head-office of the Computer Science Department in the University of California Los Angeles (UCLA), and the other at the Standard Research Institute, near Palo Alto.

This network’s embryo emerged in the heat of the Cold War. Its implementation was a sore point in the American strategy that aimed at preserving big databases and its own scientific and technological knowledge accumulated and stored in the main universities, laboratories and research centres in the United States; all of it threatened to be completely destroyed in case of a hypothetical nuclear conflict with what was then the Soviet Union.

More significant than its political motivations were two discoveries that enabled the emerging of the internet. The first of them being the creation in 1973 of the protocol known worldwide as TCP-IP (Transmission Control Protocol – Internet Protocol) by Vinton Cerf and Robert Kahn, which made the communication between two completely different computers possible.

The other one was the invention of the World Wide Web in 1991 by Tim BernersLee, aiming at creating new communication tools for the exchange of text and graphics between colleagues of the same research centre. On August 6, 1991, he made his project public, allowing people to download the server and browser that he had created. CERN (European Organization for Nuclear Research) launched the world’s first website at http://info.cern.ch. Berners made his ideas available without patents or royalty charges.

Berners-Lee’s work that would later become the World Wide Web started in 1989, when the proposed a communication project using hypertext, in which several documents could be interconnected by electronic references. The

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physicist then developed the HTML, the Hypertext Transfer Protocol (HTTP, file exchange protocol), the Universal Resource Locator (URL, an address system), and the first browser.

Tim Berners-Lee is the head of the World Wide Web Consortium, an international organization created to define internet standards. Being an idealist, Lee refrained from claiming his intellectual property rights in relation to the invention of the World Wide Web, deliberately not patenting it. Finland’s Government paid him homage in 2004 granting him the Millennium Technology Award and offering him a check for € 1 million. Briefly after that, he founded World Wide Web Consortium and is currently involved in a project for a more semantic Web27.

In 1992, there were already more than 15 million users in the World Wide Web. The first graphic browsers came into existence, such as Erwise and ViolaWWW for X Window system, Unix’s graphic interface. The internet reached 1 million servers.

In 1999, internet reached what is now referred to as the “dot-com bubble” period, or “irrational exuberance”, in the words of Alan Greenspan, former Federal Reserve President (central bank of the United States). In those days, there seemed to be no market laws. The strategy was to grow regardless of financial results. The financial market’s euphoria reached its peak when Netscape went public in August, 1995.

Companies reached unreasonable market value. Priceline, a company which sold tickets online, was worth approximately US$ 10 billion the day it went public, i.e. more than United Airlines, Continental Airlines, and Northwest Airlines put together, even though it registered losses three times higher than its profits.

Pets.com, a company that sold supplies and goods for domestic pets, spent US$ 2 million on a TV ad during Super Bowl, the championship game of the National Football League in the United States. The company’s symbol, a sock puppet in the shape of a dog, was widely known around the United States. The company received more than US$ 100 million in investments before it folded.

On June 1, 1999, Napster was launched, a file sharing service over the internet that set the beginning of the phonographic industry crisis around the world.

On January 10, 2000, American Online (AOL), announced the purchase of Time Warner for US$ 162 billion in stocks. That was the peak of the dot-com bubble.

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2007), 274.

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AOL was worth double the price of Time Warner and together they formed a group worth US$ 350 billion. Three months later, after the bubble burst, the company’s stocks fell 75%.

Federal Reserve, the central bank of the United States, raised its prime rate six times from 1999 to the beginning of 2000, reducing available money in the market. Nasdaq, the electronic equity securities trading market in the United States, that concentrates technology stocks, reached its climax on March 10, 2000, reaching 5,048.62 points, more than double the amount that had been reached 14 months earlier. On the following session, it fell 2.8% and on the next one another 4%. On October, 2002, it accumulated losses of 78%. The fall was not restricted to technology companies. Between March, 2000, and June, 2002, stock markets around the world lost US$ 11.5 trillion. But despite the dot-com bubble burst, the internet kept on growing.

1.11 - Mobile Phone Portable telephones were first invented in 1947 by Bell Labs and AT&T’s engineers, having been developed later by Bell Labs in the 1960s. Radiophones were widely used during several periods in history, mainly during the Second World War for military purposes. However, portable telephones were first used in 1973. The patent for the first wireless telephone belongs to George Sweigert from Euclid, Ohio, having been registered on June 10, 1969.

Martin Cooper, a Motorola researcher, is considered the inventor of the first mobile phone. On October 17, 1973, he named his invention “Radio telephone system”. Using modern technology in a heavy structure for a hand-held phone, Cooper made his first phone call on April 3, 1973, to his rival Dr. Joel S. Engel from Bell Labs. The first urban area that received phone calls from mobile phones was in Japan in 1979, and in 1980, 1G, the first generation of mobile phones was launched. In 1981, Nordic Mobile Telephone (NMT) was founded in Denmark, Finland, Norway and Sweden.

For the past few years, more technology has been applied to mobile phones to improve call performance, make them lighter and provide them with different functionalities. Nowadays, there are approximately 4.1 billion mobile phones in the world28.

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1.12 - GSM mobile phone The first “modern” 2G (second generation) digital technology network for mobile phones was launched by Radiolinja in 1991, in Finland, based on the GSM system (Global System for Mobile Communication)29 and it increased competition between two of the biggest telephone companies, namely Radiolinja and Telecom Finland, which at the time had the 1G network monopoly power in the country.

The first information transmission service to be available on mobile phones was SMS (short message service) in Finland, in 1993, allowing people to send messages to one another. The GMS tool allowed technological innovations such as the sale of Coca-Cola in a few vending machines that received SMS from consumers. These experiments took place for the first time in 1998. The first commercial transaction performed on mobile phones happened in Sweden but were commercialized in Norway, in 1999. Technology evolution allowed more and more forms of payment and bank transactions to take place via mobile phones, and the first one dates from 1999. The sales of service and entertainment begun quite rapidly in 1998, in Finland, where the first “Ringtone” was sold30. In 2001, 3G technology (third generation) was launched in Japan by NTT DoCoMo using “WCDMA standard” technology (Wideband Code Division Multiple Access)31.

Nowadays, the main countries that have a broad knowledge on telephony new generations are Japan and Scandinavian countries such as Finland, Sweden, Norway, and Denmark. These countries already offer 4G technology (fourth generation). For instance, in Japan more people use their mobile phones to shop and browse the internet than they use computers 1.13 - Web Browser A web browser is an application that offers a visual display that allows the user to interact with text, video, image, music, games and other information located on a page in the internet or in a local network. Browser history begun in the middle of

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Accessed 30 April 2009; available from http://en.wikipedia.org/wiki/GSM; Internet.

30

Accessed 30 April 2009; available from http://en.wikipedia.org/wiki/Mobile_phone#cite_note-6; Internet.

31

Accessed 30 April 2009; available from http://www.umtsworld.com/umts/history.htm; Internet.

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the 1980s, and was later applied after Tim Berners-Lee created the World Wide Web in 1991. The first graphic browser, NCSA Mosaic, was created in 1993 and contributed to a boom in Web use. Shortly after that, Marc Andreessen, NCSA Mosaic team’s leader, opened his own company called Netscape, launching Netscape Navigator in 1994, which rapidly became the most popular browser in the world.

On August, 9, 1995, Netscape went public in the stock market, which ignited the market’s euphoria for internet companies. The company’s stock price was going to start at US$ 14. At the last minute, the initial price was raised to US$ 28. The stock reached US$ 74, closing at US$ 58.25, having gone up 108% in a single day32.

Microsoft reacted swiftly having launched in 1995 the Internet Explorer browser.

Highly influenced by Mosaic, Internet Explorer started the first war between browsers. Using the bundling strategy, Microsoft associated the browser to Windows and rapidly took over the browser market, having reached a share of 95% in 2002.

However, since 1998, Netscape opened Mozilla Foundation’s doors in an attempt to produce a competitive browser. In order to that, the company created an open code strategy to receive solutions from all over the world. In one of its attempts, the browser Firefox was created in 2004. Nowadays, Firefox Mozilla is one of Microsoft’s strongest competitors, and more recently brands like Apple and Google have launched Safari and Chrome, respectively, entering a second great war between browsers.

1.14 – Google Probably one of the greatest inventions in the 21st century, Google is responsible for crucial shifts in communication’s paradigm and in the field of technological innovations. Its first service was Google Search, nowadays the most used searcher in the world, originally created as a doctorate project by the students Larry Page and Sergey Brin from Stanford University in 1996. The project called Backrub came to be as a result of its creators’ frustration with the search engines available at the time, aiming at building a search site that could be more

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2007), 287.

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advanced, fast and provide better link quality. Brin and Page reached their goal and went beyond it, presenting a system that offers great relevance to answers in a user friendly environment. One of their proposals was to have very discreet and targeted advertising in Google so that users wouldn’t waste their time.

Nowadays Google offers tens of other online services, most of them free of charge, which include e-mail, editing, document and spreadsheet sharing, social network, instant communication, translation, photo and video sharing, amongst others; and it also offers tools for specialized research that include things such as news, images, videos and academic papers. The great majority of Google’s revenue comes from Google AdSense that provides online advertising via sponsored links.

1.15 – Bluetooth A mechanism to exchange data in a short-distance wireless network using mobile and fixed devices came into existence in 1998 and was named Bluetooth. The name dates back from the 10th century, when the Danish King Harald Blatand, or Harold Bluetooth in English, was crucial in bringing together different factions in where Norway, Sweden, and Denmark are today33. Since 2000, all mobile and fixed devices that need to transmit data have the Bluetooth technology inbuilt in their structures. The technology started being used in mobile phones in 2000, in personal computers and printers in 2001, in keyboards and GPS devices in 2002, in portable music devices, such as MP3 players, in 2003, in earphones in 2004, besides watches, televisions and others. The security issue in data transmission has always accompanied this technology; however, it has allowed new possibilities not only in data transmission itself but also in communication.

Nowadays, the Bluetooth platform is used to transmit advertising messages directly to consumers when they enter, for instance, shopping centres and bookstores. It is an efficient and pleasant practice because the user must accept the content before receiving it. It is possible to send text messages as well as photos, videos and other entertaining content.

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Accessed 30 April 2009; available from http://www.bluetooth.com/Bluetooth/SIG/; Internet.

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1.16 - Play Station PlayStation is a fifth-generation video game launched by Sony Computer Entertainment in December, 1994. PlayStation was the first console and portable device produced by the Sony brand. It was initially created and launched in Japan and lately, other devices have enjoyed the PlayStation brand success, such as Net Yaroze, PSX, PocketStation, PlayStation 2, PlayStation Portable, and PlayStation 3. On March 31, 2005, PlayStation reached the mark of 102.49 sold units34, becoming the first console video game to sell more than 100 million units.

Nowadays, the PlayStation brand is slightly behind competitors such as Microsoft’s Xbox and Nintendo’s Wii. This is due to the choice of technology developed for the console’s third version, PlayStation 3. Recent results from April, 2009, show that the first in the ranking is Nintendo Wii, which has sold more than 50 million units. In second, with approximately half the sales, comes Xbox, which has sold more than 28 million units. PlayStation 3 has sold approximately 21 million console units35. The same disadvantage applies to Sony’s Play Station Portable, the PSP. It is behind Nintendo DS in the portable devices war.

Maybe Sony’s disadvantage lies in the fact that its competitors allow the connection to other players over the internet. In the Xbox case, for instance, Microsoft offers the communication platform called “Xbox Live”. Inside Xbox Live it is possible to envision a whole world of entertainment. One can see the communication opportunities that are created inside the games and service platform. Many believe that this is an innovative and relevant format to users, because the brand reserves a space inside the content without interfering with the message, i.e. without lessening people’s fun.

1.17 – iPod Apple’s iPod product line was born in the “digital hub”, when the company started creating a software for the growing market of personal digital devices. Digital cameras, video cameras and organizers were gaining market share. And Apple

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Accessed 30 April 2009; available from http://www.scei.co.jp/corporate/data/bizdataps_e.html; Internet.

35

Accessed 30 April 2009; available from http://nexgenwars.com/; Internet.

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decided to develop its own technology in a market that was dominated by Sony in the 1990s. Coordinated by CEO Steve Jobs, Jon Rubinstein, Apple’s hardware engineering division director, gathered a team of engineers to project the iPod line. The team included Tony Fadeel and Michael Dhuey from the hardware division, and had Jonathan Ive as the design team coordinator. The product was developed in less than a year and presented to the world on October, 23, 2001.

Jobs announced it as a “device that would put 1,000 songs in your pocket”36.

In 2007, Apple changed iPod’s interface once again introducing iPod Classic’s sixth generation and iPod Nano’s third generation, changing the font to Helvetica and, in most cases, dividing the screen in half, showing the menus to the left and album illustrations, photos or videos to the right. iPod was one of the main products responsible for the profound changes in the phonographic industry. In a brief analysis, the music industry’s rules until the 1990s weren’t really attractive to artists. However, it was economically attractive to music agents, distribution channels and big record companies, since they all profited immensely in all touch points between the artists and their consumers.

With the internet advent, the direction and the role of each one of Porter’s37 five forces changed drastically. The music inside CDs, until then the only existent media, were transcribed into new digital formats, such as, for instance, the MP3 file, guaranteeing similar sound quality once found in the “old” CDs. Adding all new sound formats that came into existence and the creation of new distribution channels in the internet, it is possible to say that the music industry has undergone great changes.

Making a parallel between the music industry and Porter’s five forces, it is possible to observe the following changes: Barriers to entry: Low. The internet made new distribution channels available, from P2P networks to pay per song applications (e.g. iTunes). In face of this, musicians declared their independence to the big recording companies and nowadays it is possible to produce and promote an artist’s work in a fast and efficient manner.

Bargaining power of suppliers: Low. Artists no longer depend on traditional means to promote their work. The internet allows the building of websites and

36

Accessed 30 April 2009; available from http://lowendmac.com/orchard/05/origin-of-the-ipod.html; Internet.

37

Michael .E. Porter, How competitive forces shape strategy, Harvard Business Review, Harvard Business

Publishing, HBP (January, 2008), 68.

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through these new distribution channels artists can sell their music directly to the end consumer. The role formerly once performed by recording companies has become unnecessary because these companies do not profit from music copyright as they did before.

Bargaining power of buyers: Very high. Purchasing decision power is entirely in the hands of consumers. They are the ones who decide if they wish to pay or not for the music. Recording companies offer the music at very low costs and make use of the variety of distribution channels available, using CDs and pay per song applications. If a recording company charges a high price for the songs, the consumer will rapidly resort to a free channel with the P2P networks.

Threat of substitute: Extremely High. The internet allowed the creation of different music file formats and new distribution channels. Some of these channels offer free music and if the recording companies do not offer their music at very low cost, the consumer will search for the music elsewhere. Another point to be considered is that consumers no longer want an album (costing between US$15 and US$20) containing a music selection pre-determined by the recording companies, they search for a specific song from a specific album. So it is possible to consider that the big recording companies are rethinking their business models and heavily investing in pay per song distribution channels.

Rivalry among existing competitors: Higher. It is possible to spot market players competing with the big music labels. Independent recording companies have become increasingly popular with new artists who are not interested in the big recording companies. The new music file formats have changed the way an artist’s work is promoted. Nowadays websites and communities such as MySpace and the P2P networks are easily accessed by consumers. Therefore, the big recording companies no longer own the industry monopoly and are searching for new ways of surviving.

In the current music industry business model all profit is handed over to artists since the traditional procedures such as launch of the artist, relationship with music agents, traditional distribution channels, and big record companies have ceased to exist. The current model is less attractive and less profitable to the big recording companies. The consumer benefits from a larger product offer that comes from different players and distribution channels, frequently finding their artists without any cost at all.

In 2007, Apple launched “iPod Touch”. The “wheel” was removed from the product and its interface became similar to iPhone’s, which resulted in great

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visual changes in the final product.

1.18 - Commercial VOIP Voice over Internet Protocol (VoIP) is a general term for a series of technologies that deliver voice communication via IP networks such as the Internet or other computing networks by bundles. Other common similar terms are IP telephony, telephony over Internet, voice over broadband (VoBB), broadband telephony, broadband and telephone.

They all refer to telephony over the Internet, voice communication services or voice message applications that are transmitted over the Internet, more than to the public switched telephone network (PSTN). The basic steps in a telephone call relate to the conversion of analog voice signals into the digital format.

Skype was founded in 2003 and has become increasingly popular since its services were launched. The company was bought by eBay in September, 2005, for US$ 2.6 billion, but there are plans for the companies to be split in 2010 and become separate entities. Recently, Skype has launched a VoIP application for iPhone that should cause many changes in the communication and telephony sectors.

1.19 - Wi-Max WiMAX, or Worldwide Interoperability Microwave Access, is a kind of wireless telecommunication technology that offers data transmission using a series of transmission methods, from a point-to-multipoint that allow internet access in portable devices. This is a wireless technology that offers up to 1Gbit/per second without broadband, and is based on the IEEE 802.16 standard (also known as Broadband Wireless Access). The “WiMAX” name was coined by the WiMAX Forum, an event that took place on June, 2001, to promote the conformity and interoperability of broadband wireless products based upon the harmonized IEEE 802.16 standard. The WiMAX Forum describes it as a “technology based upon standards that allow the ultimate wireless broadband access as an alternative to cable and DSL”38.

From communication’s point of view, the use of WiMAX services can provoke

38

Accessed 30 April 2009; available from http://en.wikipedia.org/wiki/WiMAX; Internet.

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profound changes in the way people relate to the internet. It will be possible to have not only greater information and communication speed but also to do so in places where access was not feasible before. A WiMAX antenna can reach kilometres long.

1.20 – Xbox Xbox is the sixth generation of a console video game produced by Microsoft Corporation. It was Microsoft’s first attempt in the console market, having as competitors Sony’s PlayStation 2, Sega’s Dreamcast and Nintendo’s GameCube.

The Xbox integrated service allows players to compete online. It was launched in North America on November 15, 2001, in Japan on February 22, 2002, and in Australia and Europe on March 14, 2002.

Microsoft’s Xbox was the company’s first product for the video game market, after its experience collaborating with Sega in the creation of Dreamcast console.

Xbox’s first edition was developed by a small team from Microsoft, which ended up delaying the production. But Gates had a different strategy from his competitors and besides the console, the company also presented an interactive platform that allowed players to challenge other people online. It was the first multiplayer game that used the internet.

Lately, “Dead or Alive 3”, “Amped: Freestyle Snowboarding”, “Halo: Combat Evolved”, “Fuzion Frenzy”, and “Project Gotham Racing” are some of the most popular titles in the Xbox platform.

1.21 – Wii Wii is a console video game produced by Nintendo. It’s the company’s seventh console generation, having as its main competitors Microsoft’s Xbox 360 and Sony’s PlayStation 3. On December 31, 2008, Wii became the sector’s worldwide sales leader, having surpassed PlayStation 3 and Xbox 360, reaching a greater demographic range than its competitors. One of its distinctive features is the wireless controller that can be used as a handheld device that detects movements in three dimensions. Wii Remote is the console’s main controller. It uses a combination of built-in accelerometer and infrared to detect the direction in the 3D environment when it is pointed towards the sensor bar. This equipment allows users to control the game by making physical gestures, as well as by

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using the traditional buttons. The controller connects itself to the console via Bluetooth. Another distinctive feature is the WiiConnect24 that allows the reception of messages and updates through the internet.

Nintendo Wii is the company’s fifth home console, Nintendo GameCube direct heir, capable of reproducing GameCube’s official games. It was launched in the market in 200539.

1.22 – iPhone iPhone is a multimedia smartphone that was launched by Apple in 2007. The world was anxiously waiting for the technological innovations that Steve Jobs had been promising for some time. iPhone is much more than an ordinary telephone.

It works as a portable media player, due to its Wi-Fi connectivity and other features. It doesn’t have a physical interface and the keyboard was created as a multi-touch platform.

On January 21, 2009, Apple announced the sales of 4.36 million 3G iPhones in the first quarter of this year, having closed 2008 with a total of 17.4 million iPhones sold. These numbers temporally bothered its BlackBerry rival, which had sold a total of 5.2 million units40.

Its technological innovations are many, but perhaps the greatest change comes from the new ways it allows people to interact with a telephone, having shifted communication paradigms that go beyond voice services normally offered in this kind of product. The development platform known as SDK allowed developers to create new applications and services. These can only be commercialized at iTunes, which makes iPhone more than an ordinary phone. It has created a whole business 100% centred in Apple, blocking out competitors and new players.

A recent marketing action has put Apple on the verge of having one billionth iPhone application downloads. This means that iPhone’s users are eager to turn their smartphones into virtual fishing poles, burst bubble wraps or publish their photos directly in their virtual albums. Applications such as Flickr, BubbleWrap (yes, you can pop bubble wraps using your fingers on the phone) have helped to make the Apple Store profits reach nearly billions of dollars in only nine months.

39

Accessed 30 April 2009; available from http://en.wikipedia.org/wiki/Wii#Launch; Internet.

40

Accessed 30 April 2009; available from http://en.wikipedia.org/wiki/IPhone; Internet.

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The fact that iPhone’s users can download a varied sort of applications from the Apple Store has started a technological revolution, changing the way consumers interact with computers and placing the development of software tools in the hands of newbies, which will help to create a new economy built around a piece of plastic and glass. It’s also helping Apple’s profits to go beyond expectations.

The company has said that profits increased 15% in the second quarter of 2008, having reached US$ 1.21 billion mostly because of the sales of 3.79 million iPhones – a profit margin 123% higher than the equivalent period in the previous year.

Suddenly, everyone from the highest staff to the lowest member in a corporation, from experienced software engineers to people who had never coded a computer program before in their lives are creating a new demand and curiosity stimulated by a single telephone. They might want to offer a product, a service, seek selfpromotion or even simply design something new, for anyone can develop an application and submit it to Apple’s approval. Their goals might be different but they all want to make their applications popular amidst more than 25,000 orders now available for iPhone. Approximately 30 percent of the work’s profit goes to Apple and the rest goes to the work’s author. Much more than a telephone, a new profit income to the company.

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Chapter II 2 - Convergence zones and the speed of change After a brief account of the main innovations that evolve around new technologies and new communication formats, it is possible to state a few current consequences and predict a few outcomes for the near future. Perhaps one of the main points is related to the increasingly higher speed of technological innovations. These changes impact people’s lives and modify consumption habits and the way people enjoy services. Due to consumption habits paradigms shifts, the communication industry faces the challenge of reinventing the way it talks to people, because they are not acting as they used to. It is possible to imagine the changes radio brought to people’s lives in the 1920s, when the only communication channels were print media in newspapers and magazines. On November 14, 1922, at Marconi House in London, the first regular radio news was launched, with information provided by Reuters. One of the first companies to take the radio on board was AT&T, having created “AT&T Station WEAF” in New York, in 1922. With a daring strategy for those times, the radio station offered 100 minutes to anyone who was prepared to pay US$ 100. Then, Queensboro Corp, a real state agency from Long Island, bought the first radio spot in history: in the end, there were 15 radio spots that cost US$ 50 each. The habit of reading headline news on newspaper was taken by surprise by the radio, where news was transmitted faster as time went by, during the radio news. That was one of the first and most important shifts in communication’s paradigms.

Besides transmitting news and information to the population, some professionals from the communication industry saw an opportunity to use the tool to entertain the public. In 1935, Marcel Bleustein bought the “Rádio LL” private station, changing its name to Rádio Cité41 in Paris. Bleustein was one of the founders of one of the biggest communication groups of the century named “Publicis”42. He was also responsible by the creation of one of the most successful radio formats, the “soap operas”. It didn’t take long for the radio to surpass magazines as a source of advertising revenues at the end of 1938. In order for that to take place,almost forty years had to go by for the first paradigm shift in the communication industry to happen.

41

Accessed 28 April 2009; available from http://www.radiocite.ch/; Internet.

42

Accessed 28 April 2009; available from http://www.publicis.com/; Internet.

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The world was preparing itself for the great changes that were yet to come.

Scientists everywhere worked on new discoveries and new attempts at different communication formats. The telephone was a fact and radio was gaining popularity through magic soap operas that took over prime time in households. In 1926, when television was invented by two scientists at the same time, namely the Scotish John Logie Baird and the American Philo Farnsworth, many begun to envision the device’s potential for a new communication format for the future.

At the opening of New York World’s Fair, on April 20, 1939, David Sarnoff, President of Radio Corporation of America (RCA), presented his television cameras and delivered his prophecy: “One day television will be an important entertainment and communication medium”43. As time went by, it is possible to conclude that Sarnoff was right, but it is also worth remembering that industry leaders’ forecasts not always come to be. For instance, in that same year, IBM’s president actually said that “the computer won’t become an industrial product IBM will be interested in”44. New York World’s Fair main theme was “The World of Tomorrow!”, explored in all of its aspects, transportation, communication, life style. Its central goal wasn’t selling products but showing everyone the great technological and cultural evolutions. In 1941, AT&T performed its first experimental transmissions of images from a cinematographic film using coaxial cable between New York and Philadelphia. The TV image had 240 lines.

It didn’t take long for television to take over the world, doing what the radio had done before, using magic to entertain people. In 1954, CBS (Columbia Broadcasting System) became the world’s biggest communication vehicle. So it is possible to say that since the first shift in communication’s paradigm in 1938, 31 years had to go by before media investments in TV surpassed the ones in radio.

Since then, television hasn’t lost its top position in people’s homes worldwide and it is also still the media vehicle that receives the greatest bulk of investments from advertisers, brands and services. However, it is worth pointing out that for the past 50 years, the need in human beings to develop innovative technologies and new communication channels has been increasing. Besides the fact that people

43

Ethevaldo Siqueira, Revolução Digital: história e tecnologia no século 20 (São Paulo: Editora Saraiva,

2007), 108.

44

Ethevaldo Siqueira, Revolução Digital: história e tecnologia no século 20 (São Paulo: Editora Saraiva,

2007), 108, 109.

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are susceptible to changes, they seem to question the need to reinvent themselves, question the status quo, even when they are only the receptor.

It is possible to identify a change not only in the consumption of new mediums but also in the way people interact with them. More than just a receptor, people are also becoming emitters. They are not happy anymore with just watching something passively. They want to participate, modify the message. The change can be analysed when we compare new communication mediums and current numbers. According to CNN Money45, the digital industry was the second industry to grow more in the past 5 years, behind only the metallurgical industry.

That is to say that the digital medium has been growing faster and has also surpassed print and radio in terms of investments in communication. It is behind only television, which is still the medium with the greatest consolidated media penetration in the world. And this change took only 18 years to happen.

Video game, which had its zenith in the 1970s and 1980s, was reinvented after the internet advent. Many of them, such as Microsoft’s Xbox, have envisioned the possibility of using the internet to allow a player to compete with any other person anywhere in the world. Microsoft didn’t invent video games, but it innovated by using it as a means of communication in 2002, in the “Xbox Live” platform. It took 7 years for advertisers to recognize the potential of the new media channel inside the game.

And what can be said about mobile platforms in mobile phones? The first mobile phone that could accommodate a commercial platform used the “WCDMA standard” protocol by NTT DoCoMo, a Japanese carrier. This took place in 2001, when the third generation (3G) of mobile phones came into existence. It took only 9 years for some countries, namely Japan and Scandinavian countries, to substitute the heavy computers by the smartphones. Time spent browsing and acquisition of new phones has been growing faster than any communication platform. Besides the mobile feature, mobile phone or smartphones are becoming increasingly more developed and integrated with a series of new tools.

In a comparative table it is possible to visualize the speed with which changes have been impacting people’s lives, as well as how fast they are being substituted by something else:

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Acessed 29 April 2009, available from

http://money.cnn.com/magazines/fortune/fortune500/2009/performers/industries/fastgrowers/profit5yr.html ; internet

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To illustrate the movement of fast adoption of new communication devices it is necessary to observate the graphs described in the movement Worldmapper.

Created in 2006 by SASI Group at the University of Sheffield and Mark Newman of the University of Michigan, revolutionizes the world of Geography and redesigns the world map based on the capture of information and data from over 200 countries. It is curious to see how the world would be drawn if tied to the number of televisions, radios scattered by each country and the world change in twelve years due to internet and mobile phones.

Figure 2- Radios in Use “Radios were first used by the general public in the 1920s. Now there are 2.6 billion radios in use worldwide. In 13 territories there are more radios in use than people living there. 55 more territories averaged more than one radio for every four people (the world avarage household size is 4). The most radios per person are in Norway (…)

By contrast there are 1 radio in use for every 50 people in Haiti. “46

46

SASI Group (University of Sheffield) and Mark Newman (University of Michigan), Map 340, 2006, accessed

07 May 2009); avaliable from http://www.worldmapper.org; internet.

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Figure 3- Cellular Subscribers 1990 At that time, the vast majority of appliances were expensive, very heavy and had a limited network to use. In 1990, only 12 million of people had subscriptions to cellular telephones.47

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SASI Group (University of Sheffield) and Mark Newman (University of Michigan), Map 333, 2006, accessed 07 May 2009); avaliable from http://www.worldmapper.org; internet.

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Figure 4- Cellular Subscribers 2002 As the Internet boom, the word mobility began to be built and receive more the habits of people. The number of mobile phones grew 100 times between 1990 and 2002. During this period, the major telephone operators increased the infrastructure enabling the global advancement of the platform, como comenta o site: “Despite this spread of technology, the territories that were largest on the 1990 map remain the largest on the 2002. However, worldwide by 2002 there were 188 cellular subscriptions per 1000 people. In Taiwan and Luxembourg there were more subscriptions than residents.�48

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SASI Group (University of Sheffield) and Mark Newman (University of Michigan), Map 334, 2006, accessed 07 May 2009); avaliable from http://www.worldmapper.org; internet.

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Figure 5- Internet Subscribers 1990 It was possible to observe the vast majority of Internet access in the beginning was the people who lived in the United States and few in Western Europe. “Internet users in 1990 were recorded in just a few other territories.

Outside Western Europe and United States, most of users lived in Canada, followed by Australia, then Japan, the Republic of Korea and Israel. In 1990 there was practically no access elsewhere.�49

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SASI Group (University of Sheffield) and Mark Newman (University of Michigan), Map 335, 2006, accessed 07 May 2009); avaliable from http://www.worldmapper.org; internet.

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Figure 6- Internet Subscribers 2002 Since 2002, the world sees the internet growing at exponential rates. By 2002 there were 631 million internet users worldwide.

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Figure 7 – Televisions in Use “In 2002, less than 100 years after their invention, there were almost 2 billion television set in use worldwide. That is 3 television for every 10 people. Televisions are primarily seen as entertainment; but they are also a key channel providing information about the world, and a primary means of advertising goods and services.”50

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SASI Group (University of Sheffield) and Mark Newman (University of Michigan), Map 339, 2006, accessed 07 May 2009); avaliable from http://www.worldmapper.org; internet.

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To give an example of the shift in communication’s paradigm and of the amount of companies that have become obsolete in some way or other, the present research will illustrate an analysis of RCA (Radio Corporation of America) and Bell Labs, currently known as AT&T. RCA and AT&T, two icons of the American capitalism, nowadays have nothing to do with original reputation they enjoyed for most of the 20th century. Those corporations have disappeared. Nowadays RCA is just a brand of electronic products that was bought first by French Thomson and then by Audiovox. The almighty AT&T has become SBC (Southwestern Bell Communication), a Baby Bell that grew to the point of buying the assets and name of the old private American telecommunication monopoly.

RCA and AT&T perhaps are the two best examples in history of the impact paradigms shifts have had on the corporate strategies. Although in the past they were absolute market leaders, they underestimated the profound changes in technological paradigms and didn’t prepare themselves to face the digital world that was emerging before their eyes. It is worth recalling some of the history of these giants from the past.

2.1 – Radio Corporation of America Radio Corporation of America faced failure for not accompanying the transistor evolution. In those days, RCA was the world leader in the electronic sector. On the list of the ten biggest manufacturers then, there was no Japanese company.

Underestimating the danger that hovered in the horizon, the company started investing heavily in microelectronics only five years after the transistor had been invented. It was much too late because by the end of the 1960s, RCA had fallen to the ninth place in the ranking of the biggest manufacturers. Above it there were three Japanese companies: NEC, Hitashi and Toshiba. The final down fall came in the 1970s when French Thomson bought the brand RCA, with which it still commercializes its electronic products in the United States 51.

2.2 - AT&T Until 1982, AT&T was the holding of the old Bell System, monopoly of 23 regional

51

Ethevaldo Siqueira, Revolução Digital: história e tecnologia no século 20 (São Paulo: Editora Saraiva,

2007), 323.

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telephone carriers, a telecommunication equipment manufacturer (Western Electric), a long distance company (AT&T Long Lines) and the famous Bell Labs, the world’s biggest applied research lab that produced 11 Nobel Prize winners and whose inventions are as important as the transistor, the digital centres, Unix operational system, laser and mobile phones.

AT&T went through great transformation in 1984, when it had to give up its 23 communication carriers of what used to be called the Bell System. These carriers came into existence as the seven Baby Bells: Pacific Telesis, US West, Ameritech, Southwestern Bell, BellSouth, Bell Atlantic and Nynex.

Founded in 1984, the new AT&T performed only long distance services, its factory manufactured telephone centres and other telecommunication equipment and Bell Labs. After almost a century of monopoly, AT&T couldn’t get good results in the competitive American market, let alone in the international one.

Even after the profound reformulation that took place in 1996 and originated Lucent, as a company that produced telecommunication equipment and owned Bell Labs, AT&T couldn’t claim back its victorious position in the American market, which was deregulated and competitive. To make a long story short, AT&T didn’t perform as expected and it begun its downfall until it was bought by SBC on January 31, 2005, when American regulators approved its incorporation

by SBC Communication. In the same year, SBC changed its name to AT&T. When we compare AT&T to the other companies in the telecommunication industry in those days, no company equalled AT&T’s experience, prestige and tradition. It was incorporated and consolidated in 1880 by Alexander Graham Bell, the inventor of the telephone, and a century later it would control one third of the world’s telephones.

Despite all of its great advances, AT&T failed because it was unable to timely turn innovations into great businesses. Bell Labs innovations stimulated other companies, such as Intel, Texas Instruments, Sony, IBM and Motorola, to start the digital revolution. These were the real beneficiaries of AT&T’s inventions.

Mobile phones and the internet, however, helped to end the company. In face of the freedom in markets and rapid technological evolution, it was not able to adapt itself to the new world or change its inflexible culture that had become crystallized during more than a century of monopoly. AT&T was a victim of the digital revolution it had helped to start.

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2.3. – Evolution, the survival of the fittest The disappearance of these great corporations resembles the extinction of dinosaurs. Some scientists say that 65 million years ago, a comet or a giant meteor fell on Earth and produced one of the planet’s biggest catastrophes. Our world was then covered by thick clouds of carbon dioxide and other gases, a kind of nuclear winter. The climatic changes exterminated not only the dinosaurs but also hundreds of other species.

The demise of those huge animals can teach lessons that can be applied to the economic consequences of technological innovations for the companies. The great differential is pace. In the past, changes took centuries and millenniums to happen. Nowadays, they can take two decades or less.

More than any advance or isolated technology, what affects companies most are paradigms shifts. The analog world turned into digital during the greatest technological revolution of the 20th century, changing the way of producing, commercializing and communicating with the market. Digitalization has converted voice, data, text, video, and images into bits, unifying the language in computer and communication.

This paradigm shift originated the roots of the digital convergence that brings together services and technology. Laptops and mobile phones are responsible for the transmission of billions of bits in the shape of e-mails, photos, music, ondemand video and computer programs at incredibly small costs or even at no cost at all.

This radical change has been threatening the survival of traditional companies.

And the revolution goes on. Microelectronics can gather hundreds of millions of transistors in a silicon chip, allowing the creation of increasingly smaller, cheaper, and faster equipment and products. In the globalization scenario, digital convergence gains synergy, consolidates competition, opens the doors of traditionally closed markets and bridge distances.

Economically speaking, it is possible to make a brief analysis of the 1990s based on the article "Technological Revolutions, paradigms shifts and socio-institutional change" by Venezuelan economist Carlota Perez, professor of Cambridge University in England.

Carlota Perez is a neo-schumpeterian52 and a disciple of Christopher Freeman,

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Acessed 15 May 2009; available from http://en.wikipedia.org/wiki/Joseph_Schumpeter; internet

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with whom she works closely. Since the beginning of the 1980s, her articles have contributed to the current comprehension of relationships based on innovations, institutional change and economic development. Her recent book "Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages" has gained popularity amongst academic members and the world’s economic market.

According to Carlota, the world is going through the information era, which begun in 1971 when computer chips started being produced in series and its almost universalization in the three subsequent decades that she calls “installation phase”. During the following phase, which the world has just entered, and that might last twenty or thirty years, new technologies will promote an increasingly better quality of life for the majority of the world’s population. The author calls this new period “unfolding phase”.

The current period defines the transition of two different technological styles, i.e. the paradigms shifts related to technology and economy, widely known as “techno-economic paradigms”. This period implies the building of a totally new process, one that is deep, gradual and full of ideas by means of a series of attempts that alter the behaviour in organizations and institutions.

These long transition periods do not impact only economy. It is common sense that during a transition period there are economic manifestations, and the changes in the system alter the entire worldwide society. Currently, the instability period is related to a paradigm shift that had its roots in an economic problem.

In order for these changes to occur, there must be mechanisms that allow technology to spread, generating technological revolutions and shifting society’s paradigms, which generate cycles that can last months or even years. Great paradigms shifts in economy happen every fifty or sixty years; from the Industrial Revolution until the dot-com bubble burst in 2000 and until present times with the banks economic recession in 2008.

Forces intrinsic to human beings have made society highly resistant to changes and slow in adapting to new conditions, with the exception of cases when decision is made under pressure. This incompatibility is recurrent and it takes a few decades for the system to be re-established. However, once change is overcome, it is followed by an undeniable period of prosperity that guarantees society’s evolution for some time. At this point, it is necessary to examine the way with which technologies evolve and also observe the reasons that make technological revolutions gradually change the productive system.

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A basic premise for technology to be accepted by a certain society or industry is that it must have at least a knowledge basis and some level of foresight. If a certain technology is directed to a society without the slightest means of being used and understood, its chances of being assimilated are even smaller. A new technology cannot be regarded as a phenomenon that relates only to engineering, but also as part a complex process that entails technical, economic and social aspects.

A few rules must be respected for any technology to spread and be assimilated by people. One of the most well-known ones are described in Joseph Schumpeter’s53 theory when he talks about the differences between invention, innovation and diffusion.

In short, on one hand, invention is the creation of a new product, idea or process.

It is defined by author Carlota Perez as such: "The invention of a new product or process occurs within what could be called the techno-scientific sphere and it can remain there forever.54” On the other, innovation is the economic fact, i.e. the creation’s consequences when implemented in a process that produces an economic result. For instance, when the launch of a product flops, the process or product related to it tends to disappear after some time. In case it is successful, innovation can remain isolated as a fact or become economically profitable, depending on how well it is received by society and on its impact on competitors. Even so, massive approval is the most crucial point when it comes to its social and economic consequences.

Vast diffusion is what turns invention into a social-economic phenomenon.

In her book “Technological Revolutions, Paradigm Shifts and Socio-Institutional Change”, author Carlota Perez suggests and explains why diffusion is a selfreinforced process:

53

Accessed 25 May 2009; available from http://en.wikipedia.org/wiki/Joseph_Schumpeter#Business_cycles;

Internet.

54

Carlota Perez, "Technological Revolutions, Paradigm Shifts and Socio-Institutional Change" in Globalization,

Economic Development and Inequality: An alternative Perspective, ed. Erik Reinert (Elgar, Cheltenham, UK • Northampton, MA, USA, 2004), 217-242.

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“There are two main reasons why a set of truly new technologies is able to spread in a world still amply dominated by the old. First, the exclusion mechanisms have been weakened by the signs of exhaustion of the prevailing technologies and, second, there are obvious changes in the relative cost structure, which are seen to be permanent and act in favor of the new technologies. So, investment in search of better profits sees a good direction in which to plunge.

The process of switching over becomes self-reinforcing through several feedback loops. The greater the diffusion of its applications, the greater the demand for the ‘key factor’ which leads to economies of scale and lower costs, which widens the range of applications. The more the new technology spreads, the more profitable it is to set up as a supplier to it or as a distributor, which further facilitates propagation. The more investment tends to incorporate the new technologies and equipment, the more the product mix of equipment producers moves to respond to this new dynamic demand and the more difficult it becomes to find the old type of equipment in the market. (This occurs even in consumption, suffice it to imagine the difficulties experienced by someone in the 1990's insisting on buying or finding maintenance services for a traditional mechanical -or even electrical- typewriter). The more consumers learn about using the products associated with the new technologies, the easier it is for them to accept the next product or the next generation of the previous. The more the process of innovation leads to extraordinary profits and growth in new industries and firms, the more likely are the waves of imitation, and so on and so forth. “55 The author analyzes that resistance in most cases is found in large firms by top leaders of the firm. The tendency to do the tasks where the same is one of the causes in which a company is outdated and inefficient. In his work, Carlota Perez presents a series of rules to be broken, element by element, aspect by aspect.

Those who had vast experience in applying the old principles find themselves forced to learn a new way of thinking and behaving in order to get results.

55

Carlota Perez, "Technological Revolutions, Paradigm Shifts and Socio-Institutional Change" in Globalization, Economic Development and Inequality: An alternative Perspective, ed. Erik Reinert (Elgar, Cheltenham, UK • Northampton, MA, USA, 2004), 11

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Chapter III 3- Paradigms shifts inside the communication industry.

Nowadays, the communication industry is going through great changes as it has been previously described. These changes can be divided in ten groups, as follows: 3.1 - From physical to virtual The virtual world came into existence with the internet advent. In this new scenario, it has been possible to create ways of performing virtually the great majority of activities from the physical world, moreover, in many cases, these new ways have simplified the services to the end consumer. For instance, with respect to financial transactions, banks have made their services available in online platforms, making life easier for many people and avoiding loss of time queuing up. E-commerce services have changed the commerce. In 1994, Jeffrey Bezos presented Amazon (www.amazon.com) to the world for the first time, making it possible to purchase a real product through a virtual buying experience.

The paradigm shift from physical to virtual has been a fact not only in services but also in the entertainment platforms. In 2003, the world was presented to YouTube56, where users exchanged their experiences in videos that were in many cases recorded by them.

3.2 - Service consumption from fixed devices to mobile Paradigms shifts have brought technological advance. And this advance can be summarized in the word “mobility�. Nowadays it is possible to carry around all information and personal interests in latest generation telephones and even in video games. In many cases, the communication industry has followed this paradigm shift producing new formats for these new electronic devices. These formats go beyond advertising only. Lots of brands develop applications for iPhone and distribute them for free.

56

www.youtube.com

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3.3 - From collective to individual People’s behaviour has changed due to new technologies, mainly as a consequence of mobility and the use of mobile devices. Brands have focused their communication actions in individuals, different from the past, when they used to focus on the mass. Television is still a great mass vehicle, however, brands such as Facebook and MySpace work in a different way. Facebook, as well as MySpace, are currently the brands’ favourite platforms. In these platforms, brands such as Coca-Cola have made an effort to focus communication on individuals, having a greater understanding of the future client and surprising him or her at all times.

3.4 - From dedicated equipment to multi-functional From the desk radio to the portable radio. From the old analog record player to the Walkman to the Discman, and then to the iPod. From the fixed and collective desk telephone to the mobile phone (mobile and personal). From mainframe to PC to the laptop or palmtop. From television to the portable DVD player. From the old camera to the digital camera inbuilt in mobile phones.

3.5 - From wired communication to wireless Bluetooth, Wi-Fi, Wi-Max, Wi-Mesh, UWB (ultrawide band) are the broadband wireless networks that have been revolutionizing communication for the past few years.

Just imagine the changes that await us in the horizon when these

wireless networks join the cable or wired networks to form hybrid ones (IPM - IP Multimedia Subsystems).

Around 2015, it is expected for broadband networks (B-nets) to interconnect homes, schools, hotels, offices, banks, restaurants, airports, stadiums and shopping centres. Communication will flow in the planet in a seamless network, integrating the current metallic, optical and wireless ones.

According to a few specialists, including Ben Verwaayen, former CEO and Chairman of British Telecom (currently CEO of Alcatel-Lucent), broadband hybrid networks will interconnect the great majority of human beings in the next ten years. Bi-directional (IP standard) high-definition digital TV (HDTV), broadband internet and multiple services of data transmission at high speed will be available

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in the majority of households and offices in Brazil and around the world.

3.6 - Rivalry between competitors affects the industry as a whole. From monopoly to omnipresent virtual competition.

In today’s world, big communication companies suffer increasingly higher pressure from new competitors, many of them driven by new technologies. Many entrepreneurs have been creating increasingly efficient solutions to suggest a new product, a new communication format or a new service that until now wasn’t available.

An analysis of Michael Porter’s Five Forces in the current communication industry, identify some paradigms shifts that point to fewer monopolies – more specifically of a company, product or service – and to new players that are bringing innovation to the industry.

Depending on the amount of companies competing with one another, the sector’s profitability can simply vanish. Fixed costs, however, do not disappear, forcing the company to hire more in an attempt to increase total volume sales and fight low profitability.

In highly competitive markets, products are very similar and consequently, so are their offers to the client, which makes buyers’ decisions based on the lower price.

If a company is positioned in this kind of market, fight for survival is a daily challenge. The best way to face competition is to understand how to take advantage of each “player” that hovers around that business. And needless to say, to build a strong brand that will make a difference to the client at the time of purchase.

Bombril is one of Brazil’s most important brands in the household cleaning sector and its main product is a kind of steel wool, which is used as a cleaning product especially for pans and pots. To fight Assolan, its direct competitor that was rapidly gaining market share, Bombril started a campaign using inimitable personalities, such as the footballer Pelé.

To gain market share from the competitor, Assolan didn’t risk direct combat, but worked with raw material suppliers until it was able to buy stocks and then establish the price in the market.

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3.6.1 - It takes more than entrepreneurism to become a newcomer The greater the competition the greater the entry barrier because profitability in that market is increasingly lower. There are no incentives for competitors to enter certain industry sectors. Another point to be considered is patents, companies with high fixed costs or incredibly well-built brands that make impossible for new products to be successful.

3.6.2 – Becoming a substitute can open doors in monopolized markets A potential strategy to be adopted is to position your product as a substitute instead of meeting competition head-on. It is of the utmost importance to be clear about the company’s position in relation to competitors. If competition enjoys a leading position – monopoly or oligopoly – it is not wise to confront them directly.

The ideal strategy is to look for opportunities in specific niches.

3.6.3 - The power of well-informed consumers The better informed consumers are, the greater will be the rationalization level at the time of purchase and, as a consequence, the more “aggressive” price negotiation will be. In the case of impulse shopping, even if the item is an “object of desire” or a “consumption dream”, the pressure on the buyer is not smaller.

The buyer will definitely end up making the purchase, the question is where!

Even in such cases, in which price is not the decisive factor at the time of purchasing, customer care, strong brands’ reputation and combined services, amongst others, are.

3.6.4 - The strength of suppliers: economy of scale and distribution channels Quantity of inputs used per product unit can mean high bargaining power when buying raw material. General cost reduction added to these companies’ capacity to distribute their goods makes it extremely hard for new players to enter the market. Another point to be considered is the distribution channels: the greater the control over distribution channels, the harder it is for a new player to conquer market space.

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When applying Michael Porter’s Five Forces to the communication industry, it becomes clear that there is strong competition and demand for new products (Power of Buyers) due to new technology. From the point of view of the threat of new entrants (Suppliers), it is strongly related to suppliers’ bargaining power (The Threat of New Potential Entrants). The use of new technology makes it easier to create and deliver new products and services; however, these will face aggressive competition that comes from the market’s varied available options. In other words, price war will also be fiercer.

3.7 - From unidirectional mediums to interactive ones The role of communication has changed immensely with respect to its focus and direction. Traditional media, such as radio, print vehicles like newspapers and magazines, and television itself were considered unidirectional because they had the mission of conveying the news or information to its target in an established format. The possibility of starting a conversation with people was something that was not considered by communication professionals in general. But with the advent of the internet, this paradigm began to be questioned, since it became possible to strike up a conversation in a bi-direction relationship with people.

Since then, it has been possible not only to convey the desired message but also to establish new premises right from the beginning. The first change was related to the fact that people could respond to information, replying to the emitter and modifying the message.

In his work, Marshall McLuhan57 states that the medium is the message; the author analyses how communication mediums are like extensions of human beings and show how they have taken us to the audio-visual, tactile, tribal, and cosmic world of the electronic era. But the Mcluhanian theory dates from the 1960s and many things have happened since then, as author Andrea Brazil Mugnaini wrote in an article for Sao Paulo Creative Club (CCSP): “Despite this author’s incredibly visionary and innovative intellectual work, I believe that, in face of many changes in the communication mediums, we can question if the medium is still the message.

McLuhan insisted that it was impossible to separate the message

57

Acessed 17 April 2009, available from http://en.wikipedia.org/wiki/Marshall_McLuhan ; internet

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from the medium, because for him the message is much more determined by the medium that conveys it than by the intentions of who created it. Therefore, instead of being two separate things, the medium is the message.

The communication mediums impact people’s lives. But what are they? In order to understand them, we need to take a look at the communication process conceived by the Russian linguist Roman Jakobson: an emitter sends a message to a receiver using a code via a channel. When we consider that the channel is the medium, we can say that the message is the medium’s content. The mediums, the messages modify the world we live in. The way these communication mediums are used is what counts. I consider that the medium is only a space that offers infinite possibilities to transmit or build a message.

Today, in 2008, we count on many more mediums than were available in the 1960s. Besides the traditional ones, such as newspapers and TV, we also have the internet, smartphones, iPods, Interactive TV, analog and digital mediums, all cohabiting together.

But the vehicle, medium or media are the most superficial part of the process in the sense that it is the first thing noticed by the receiver in the communication process.

The mediums would be technologies devoid of sense if there weren’t the messages that fulfil them. For this reason, the message is the most important part of the process, what is created to be conveyed in the mediums. The medium is not the message. We are no longer talking about analog and digital mediums cohabiting, we are talking about their convergence. New technologies will not perform the desired convergence between the mediums, on the contrary, the messages that creative professionals may create are the ones that will do the job58.

3.8 - From analog to digital medium. From 0 to 1.

Audio and video storage and transmission has been analog since the beginning

58

Andrea Brazil Mugnaini, O McLuhan que nos perdoe (Sorry, McLuhan, in English) [online article] (CCSP,

accessed 8 June 2009); available from http://www.ccsp.com.br/ultimas/noticia.php?id=35429; Internet.

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of radio and TV. An analog format means that physical waves (sound waves in case of audio and light waves in case of video) are copied onto a media (such as the tracks on an LP, the magnetic particles on a cassette tape or the electric signals that are transmitted in wires and cables) or sent in the air.

When information is stored and transmitted digitally, the original image or sound is broken into numbers that can be understood by computers: 0 and 1. The exact 0 and 1 sequence can be read by computers (or CD players) to reproduce that specific sound or image. Digital information can be copied over and over, stored forever and transmitted without ever deteriorating, as long as the digital information is not lost or corrupted in any way.

According to news that has been published on the AdNews59 site, digital communication mediums are already the most used ones worldwide. According to the International Telecommunication Union (ITU), more hours are spent weekly in digital mediums than in front of the television, listening to the radio, reading newspapers or going to the cinema.

It took humanity more than 125 years to have more than 1 billion fixed telephone lines, but it only took 21 years to have the same number of mobile phones. Fixed telephones are being substituted by mobile ones and the same change is going to be observed in other devices that rely on wire.

This is an irreversible growth and its popularity has shown its strength: in some places, there is an average of more than one mobile phone line per person: Luxembourg, Lithuania, Italy, Hong Kong, Israel, Portugal, Estonia, Singapore, Iceland, Norway, United Kingdom, Jamaica, Ireland, Arab Emirates, and Denmark.

Mobile telephony brings internet with it, and this can be an important digital inclusion facilitator, especially in countries of continental dimensions, that have huge social gaps, where broadband access will take some time to diffuse.

Companies that are part of the internet will need to adapt to mobile phone’s small and restricted displays or find solutions that can draw consumers’ attention with mobile devices, in real time. These consumers are keen on receiving information and making all sorts of transactions regardless of where they are.

59

Accessed 12 March 2009; available from http://www.adnews.com.au/; Internet.

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3.9 - Speed of light communication. From low to high speed Optical fibers have raised information transmissions to levels never seen before.

In theory, by 2015, when optical frequencies will be used to their maximum capacity, a single optical fiber will be able to transmit giant amounts of information, approximately 400 to 600 terabits per second.

At this speed, all the information stored in the U.S. Library of Congress, the world’s largest library, would be transmitted in 2.1 seconds. In the 1990s, photonics gave a giant technological leap with the Dense Wavelength Division Multiplex – DWDM, which multiplied by a thousand the speed of optical system transmissions, going from gigabits to terabits per second.

3.10 - From closed to open protocols Software is intelligence built in chips. Its importance exponentially grows day after day in all areas of human activity. Around 2025, search engine software is going to be the most common and popular kind. There is no IT without software.

In operating programs or applications, software make computers work, giving them practical applications. This also applies to thousands of machines and devices such as PDAs, mobile phones, digital cameras, iPods, satellite navigation systems, internet browsers, spreadsheets, word processors, and communication systems. Software creates new possibilities for commuting in bundles and or through digital compression – such as ADSL, HDSL, XDSL, VoIP, voice recognition and new digital formats and patterns, e.g. MP3, MPEG 2, 4, 8.

Or even the new internet protocol generation: IPv6. The great paradigm shift is related to copyright. Currently, more and more software, operating systems and services are built on an open source platform, i.e. built not by a single person, but by many people who add services to the job helping to develop these platforms known as Creative Commons.

Creative Commons is a non-profit project that makes flexible licenses for intellectual work available. Besides Creative Commons, there are several other similar works. In communication, many advertisers are taking advantage of the “co-creation” element of actions, best known as web 2.0. Web 2.0 was a term created in 2004 by the American company O’Reilly Media to describe a second generation of communities and services, having the “Web as a platform”, involving wikis, applications based on folksonomy, social networks and

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Information Technology in which the users themselves built and discuss platforms, keeping them self-sustainable, without the need of a centralized single management. Sites such as Wikipedia60, Google61, YouTube62 and Orkut63 can be considered the best examples of the 2.0 generation.

Many brands have taken advantage of the Web 2.0 to create advertising campaigns, such as the American brand Starbucks’ “My Starbucks Idea”64. In this project, the brand created an open channel with consumers where it was possible to send suggestions for new beverages, products and services. As a result of the project, the brand has already included lots of these suggestions in its menus and in the services offered in its stores.

3.11. – A new society is born As it is widely known, any profound technological innovation provokes all sorts of inevitable phobic effects. Even though human beings tend to be rational, they are also conservative, habitual and easily frightened. Until not long ago, only insignificant minorities lived in cities; very few people are directly related to technical and mechanical areas. The great majority of humanity, which is the case in the Third World, lives in remote areas, being inevitably influenced by these areas’ psychology.

In the history of evolution, humans have seen their everyday life change dramatically and have had to adapt to theses changes. They are used to working with established rules and patterns in their everyday life – also known as paradigms – and many doubt the need to change them.

In his book “Technology and Society”, Jan Harrington describes some of people’s reactions when confronted with the need to change: “Humans seem to have a natural resistance to change. We can come up with a wide variety of reasons why we don’t want to disrupt the

60

Acessed 13 March 2009, available from www.wikipedia.com

61

Acessed 13 March 2009, available from www.google.com

62

Acessed 13 March 2009, available from www.youtube.com

63

Acessed 13 March 2009, available from www.orkut.com

64

Acessed 10 February 2009, available from http://mystarbucksidea.force.com/home/home.jsp

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status quo: - I’m happy with the way things are now. (“If it ain’t broke, don’t fix it.”)

- I’ve put a lot of effort into getting where I am now and don’t see any reason to go through the same effort again.

- I’m too busy.

- The result of the change doesn’t seem to be an improvement. In fact, it seems likely to make things worse.

- The change doesn’t particularly interest me.

- I don’t know how to make change happen, even though the plans look good.

- It is too much trouble to go to through the change process.

The result isn’t worth the effort.

- I am able to stop the change, and I will because I can.65” Every time the word change needs to be applied by one reason or other, the word fear might accompany it; despite the optimism that may exist towards the final result, this result is not yet known. Technological changes are not different from any other kind of change: some people and groups will resist to them.

Every time a big technological change takes place – such as substituting an existing a coaxial cable network by an optical fiber cable network – the premise to bear in mind is that the project should be successful and promote better services than before. In other words, every change entails a certain level of risk.

The fear related to an unknown result and the risk related to any change is part of people’s everyday lives. There is high risk when brands need to update a product line or implement new services. Some people fear having to accept new professional proposals in face of the unknown. And why not say that that happens inside the communication industry?

Nowadays, there is a huge paradigm that needs revision in the communication industry. And the risks are many because big companies will need to change their business model. They need to envision ways with which to maintain its position relevant in the industry sector, as it has been previously described, they will have to face competition not only from other big companies but also from small ones, and also, at times, from companies that are part of totally different

65

Jan Harrington, Technology and Society (Sudbury: Jones & Bartlett Publishers, 2008), 73-74.

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sectors. In today’s scenario, big even companies might compete with people who are freelancers working from home. Regardless of the type of business model, the nature of the business remains the same, i.e. what really matters is the project idea that is offered to the client. What could be some of the reasons for resistance to change the business model?

The reasons might be many. The main ones must be related to lack of interest in changing. Changing would oblige a company to stop its business and learn to do it in a different way. In many cases, changing would oblige a company to review its business model. These are some of the reasons why some communication industry leaders do not see the need to recreate a new model, to think differently, and they do not see the point in re-learning how to do something that has been done successfully before. These groups resist to the current paradigms shifts in the communication industry and prefer not to disrupt the status quo, which ends up interrupting the sector’s intellectual advances. In many cases, their attitude interrupts some technological advances that in the short term might favour the technology savvy, but that in the long term could help solving old problems in consolidated models.

Let’s consider the transistor case as an example. The transistor is considered by many one of the greatest inventions of modern history, having been responsible for the revolution in computers and electronic equipment. Its key contribution to modern society is its ability of being produced in huge quantities using simple techniques at ludicrous prices.

Its low cost turned it into an almost universal component for non-mechanical tasks. For instance, an ordinary appliance, such as a refrigerator, would use a mechanical device to control its functions; however, nowadays it is much cheaper to use a microprocessor with millions of transistors and an appropriate computer program to perform the same task. Today’s transistors have substituted almost all electromechanical devices and control systems, being used in great quantities in almost everything that involves electronics, from computers to cars. Its cost has been crucial in the efforts to digitalize information. Computers with transistors can rapidly find and sort out digital information; so much effort is being made to make all information digital.

In other words, the invention of the transistor allowed small advances in the beginning but it has guaranteed enormous future development and it has become compulsory raw material in the manufacturing of modern devices.

The focus of the present research is not to describe the current economic and

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social problems faced by the communication industry, but to try and understand how it is possible to turn technology resistant people into adopters of new technology. What happens to people who work in communication but refuse to acknowledge these changes or face the risks?

Fierce resistance to technology goes back to the Industrial Revolution in England, when a movement of people against the technological advances that were being applied in the textile industry came into existence. The following chapter is dedicated to these people, also known as the Luddites.

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Chapter IV 4 – The Luddites Kirkpatrick Sale, considered nowadays one of the great names in the neoLuddism and author of important books on the subject, such as “Rebels against the future”, says that “The Luddites also established themselves as the symbol of those who resist the new technologies and demand a voice in how they are to be used”66.

The Luddites were a social movement of British textile artisans in the early 19th century who protested against the changes produced by the Industrial Revolution – often by destroying mechanized looms that they felt were leaving them without work. This social-economic movement came into existence after the economic crisis due to the Napoleonic Wars. At the time, the degrading working conditions in the new textile factories and the machinery that was substituting artisans work transformed the Luddism into one of the most violent movements from the beginning of the 19th century in England.

The Luddite movement effectively began in 1811 and 1812, in the city of Nottingham, when hundreds of unemployed workers burned mills and pieces of factory machinery that had stolen their jobs. Having the fictive Ned Ludd as their leader, the movement was so strong that it clashed in battles with the British Army. Drastic measures taken by the British government resulted in many executions and penal transportation of the movement’s main leaders.

However, the Luddites went beyond vandalism. It is true that in the beginning of the movement there were some spontaneous riots against machinery, such as the one that took place in March, 1811, in Arnold, a Nottingham village, where a group devastated 60 looms under the cheers of a crowd of unemployed people.

But later on, the riots that took place in Yorkshire, Leicestershire and Derbyshire and nearby places were no longer irrational, scattered or disordered. They began acting in small, disciplined and organized groups. Estimates say that these groups had between three to eight thousand members, depending on the district.

As it has been said, the Luddites’ main objection was against the introduction of automated work that made human labour much more expensive than the

66

Kirkpatrick Sale, Interview with the Luddite, (Wired Magazine, Issue 3.06, June 1995), accessed 29

September 2008_; avaliable from http://www.wired.com/wired/archive/3.06/saleskelly.html; internet

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automated machinery alternative. Aiming at quantity and not quality of products, factories no longer valued skilled labour and focused on immediate profit generated from low cost products that were produced by the machines.

One of the main historians on the subject, Steven E. Jones describes the destruction and sabotage strategies with respect to machinery and factories: “The Luddites of 1811 to 1812 smashed machines (...) they did not voluntarily give up technologies of convenience or status, as do many neo-Luddites today. (...) they marched through the darkness to sabotage the machines that promised increased productivity in their trades”67.

It is important to point out that the Luddites weren’t opposed to every kind of technology, only the kind that harmed artisans’ interests. In fact, they used some heavy technologies in their favour. As Steven Jones comments: “...we have to remember, the historical Luddites were themselves technologists – that is, they were skilled machinists and masters of certain specialized techniques (including the use of huge, heavy shears, complicated looms, or large, table-sized cropping or weaving machines), by which they made their living. That living and their right to their technology was what they found to protect, not some Romantic idyll in an imagined pre-technological nature”(JONES; 2006; p.9).

Another important point is that Luddism was against “consumerism”. They wanted to secure the economic, social and political benefits that they had acquired until then. They were against disrupting the status quo, so they wanted to secure whatever had already been established to ensure profits and paradigms. Machinery was considered an unwanted innovation by the group, who had a kind of monopoly over work and production methods. There was no competition and only one way of production. Machinery made artisans’ daily lives different, and called for changes in their habits and work routine. The advent of

67

E. Steven Jones, Against Technology. From the Luddites to Neo-Luddism (New York, NY: Routledge,

2006), 47.

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machinery changed the controlled pace of consumerism. And maybe this was of the Luddites’ greatest objection because before them they used to have a stable demand, which the machinery increased exponentially, as Steven Jones states: “The Luddites were not concerned about “consumerism” per se or the degradation of the environment, but were deeply concerned about protecting their rights and their trade against the encroachment of economic and political powers from outside and above”68.

They were not resistant to the future. The Luddites were resistant to the changes that were happening at that specific historical context. In another book, Steven Jones mentions an author who has been herein previously quoted, Kirkpatrick Sale: “The Luddites were not rebels against some nebulous “future” (as Sale has it), but were resisting specific changes in their present historical moment” (JONES; 2006; p.67).

4.1 - Back to Romanticism’s old times An interesting side of Luddites and their leader Ned Ludd, was the way the message and acts of the movement were conveyed in the region. Rumour and secret messages were the tools used to set up date and time for the upcoming manifestations. Anonymous letters were used to tell of General Ludd’s odysseys and victories and to threaten factory owners, stimulating people’s imagination to create a charismatic figure without knowing it he existed.

Many authors of those days were followers of Luddism, such as in the novel “Frankenstein”, as the author Steven Jones comments: “Frankenstein has become – has been made into – the first Luddite novel. The story of Victor Frankenstein and his creature has become the fundamental literary myth of neo-Luddism, a tale about the dangers of technology. (...) Written in 1816 (...) the novel never directly represents Luddism, but generations of readers have

68

E. Steven Jones, Against Technology. From the Luddites to Neo-Luddism (New York, NY: Routledge,

2006), 90.

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assumed that such a volatile political conflict over “machinery” must have influenced its author. (JONES; 2006; p.106)” The movement advocated in favour of old times, of rejecting the future, of nostalgia and simplicity. The idea that people shouldn’t change their habits, that they should enjoy life and not worry too much about the future bears similarities with the expression Carpe diem, and with the artistic, political and philosophical movement known as Romanticism.

Initially an attitude and a state of mind, Romanticism later became a movement and a way of thinking, designating a vision of the world centred on the individual.

If 18th century had been characterized by objectivity, Enlightenment and reason, the 19th century was characterized by lyricism, subjectivity, emotion and the self, values that were impregnated in Luddism. “...Luddism is just another form of Romanticism, a version of the transcendental philosophy that would rise above its own times and reject “the future”, projecting an alternative, utopian possibility that, paradoxically, involves a nostalgic return to an older way of life, one reconciling humanity and nature in voluntary simplicity.69” The Luddites also used other ways to convey their victories and conquests, such as songs and short stories. An example follows: General Ludd's Triumph Chant no more your old rhymes about bold Robin Hood, His feats I but little admire I will sing the Atchievements of General Ludd Now the Hero of Nottinghamshire Brave Ludd was to measures of violence unused Till his sufferings became so severe That at last to defend his own Interest he rous'd And for the great work did prepare

69

E. Steven Jones, Against Technology. From the Luddites to Neo-Luddism (New York, NY: Routledge, 2006),

7.

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Now by force unsubdued, and by threats undismay'd Death itself can't his ardour repress The presence of Armies can't make him afraid Nor impede his career of success Whilst the news of his conquests is spread far and near How his Enemies take the alarm His courage, his fortitude, strikes them with fear For they dread his Omnipotent Arm! The guilty may fear, but no vengeance he aims At [the] honest man's life or Estate His wrath is entirely confined to wide frames And to those that old prices abate These Engines of mischief were sentenced to die By unanimous vote of the Trade And Ludd who can all opposition defy Was the grand Executioner made And when in the work of destruction employed He himself to no method confines By fire and by water he gets them destroyed For the Elements aid his designs Whether guarded by Soldiers along the Highway Or closely secured in the room He shivers them up both by night and by day And nothing can soften their doom He may censure great Ludd's disrespect for the Laws Who ne'er for a moment reflects That foul Imposition alone was the cause Which produced these unhappy effects Let the haughty no longer the humble oppress Then shall Ludd sheath his conquering Sword His grievances instantly meet with redress Then peace will be quickly restored

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Let the wise and the great lend their aid and advice Nor e'er their assistance withdraw Till full fashioned work at the old fashioned price Is established by Custom and Law Then the Trade when this arduous contest is o'er Shall raise in full splendour its head And colting and cutting and squaring no more Shall deprive honest workmen of bread.

4.2. – Luddites and Neo-Luddites Ned Ludd, also known as King Ludd, was probably the leader of the Luddites’ movement. His acts stirred up revolutionaries in those days. He was also known as Captain Ludd and Steve Jones, in his book “Against Technology. From Luddites to Neo-Luddism”, talks about the role General Ludd played in the movement: “Ned Ludd, too, was a figure of mythic history, an outlaw anti-hero aiming to right the wrongs committed against the textile trades and its impoverished workers.70” The figure of a martyr that didn’t exist was a great strategic solution for the movement because the leader would never be arrested and the movement wouldn’t end as a consequence of his detention. That also made it easy for Luddism members to exercise pressure on factory owners by means of anonymous letters, signed by Ned Ludd: “We’ve been informed that you are the owner of one these detestable mechanical looms and my men have asked me to write and give you a warning to get rid of them (…) if they are not dispatched by the end of next week I will send one of my lieutenants and 300 men to destroy them; besides that, please be aware that if you cause us any problems we will increase your losses by burning down your building, reducing it to ashes; if you dare to shoot any of my men, they

70

E. Steven Jones, Against Technology. From the Luddites to Neo-Luddism (New York, NY: Routledge, 2006),

65.

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have orders to murder you and burn your house down. So you should advise your neighbours to expect the same if your mechanical artisans are not put to rest at once…

Signed: General Ludd, March 1812”71.

Led by the so-called “men of bad intentions”, using masks or painting their faces to make them darker, the Luddites squad, armed with axes, spears and pistols, moving during the night, went from town to town demolishing everything they encountered, frightening factory owners. Their commander called himself “General Ludd” and he had power over his companions’ lives and deaths. In Nottingham, he took the shape of a huge man called Enoch Taylor, who carried on the shoulder a big iron bar by the same name: Enoch. All it took was one blow with that thing for an establishment’s door to be destroyed, and a stronger one applied to a machine to reduce it to pile of useless metal.

4.3 - Differences between Luddites and Neo-Luddites Neo-Luddism is a movement of the late 1990s that evoked much of the values that had been professed by the original Luddites. The author Steven Jones describes it as follows: “Neo-Luddism came to life in the late 1990s, the collective creation of a group of activists, writers, and journalists. Its focus was on a particular version of the past, on an elegiac gesture of solidarity with long-dead workers (who were after treated as noble historical losers), a lost way of life, and their quixotic, imaginary leader. Modern NeoLuddism was born in anticipatory regret and resentment, with a doomed sense of championing a lost cause. To some degree it was (literally) an antitechnology philosophy in search of a political movement to which it could be attached.72” If on one hand the Luddites were clever in preserving the anonymity and omnipresence of their leader and were considered as extremely aggressive,

71

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Accessed 13 April 2009; available from http://educaterra.terra.com.br/voltaire/artigos/ludismo.htm; Internet.

E. Steven Jones, Against Technology. From the Luddites to Neo-Luddism (New York, NY: Routledge, 2006),

28.

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having used violence in almost all of their acts, on the other, Neo-Luddism has been characterized by a much more intellectual and political action. The author Steven Jones does an excellent job at pointing out the differences and similarities between the two groups: “On the one hand, I want to avoid collapsing Luddism and neoLuddism,

to

avoid

assuming

a

simple

“inheritance”

of

the

antitechnology philosophy from 1811 to the twenty-first century. The shifting contexts are surely too complicated to support such simple linear continuities. But on the other hand, recognizing these historical differences does not mean we should therefore assume that the Luddites were all about material acts and neo-Luddites is all about ideology and symbolism (“culture”). The point of this chapter is to argue just the opposite: that historical Luddism was already a symbolic, cultural – even subcultural – phenomenon.

On the contrary, as I have been trying to show, the original Luddites were already engaged in their own vital forms of storytelling, were even to some extent engaged in an early form of what we think today as a “media campaign” to support their direct action. They were actively engaged in representing their affiliations, goals, and values in symbolic ways, through the media of letters and ballads and direct actions, and the journalistic and word-of-mouth reportage (and spying) all this provoked and inspired. In defiance of stereotypes, this highly symbolic subculture was the product of the hands-on-labors who are famous for their physical acts. The truth is that at the very heart of the most direct kind of physical action one can imagine – a worker’s sledgehammer coming down on a hated frame – there was already present, from the very beginning, a sophisticated set of symbols, myths, and intertextual allusions, a language of signs that are also more than signs”. 73 Luddism’s main objection was related to new technologies that changed their established and stable habits. They rebelled against having to adapt to an

73

E. Steven Jones, Against Technology. From the Luddites to Neo-Luddism (New York, NY: Routledge, 2006),

74-75.

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undesired reality. Changing the way profit was made and business was conducted was unthinkable at the time. Their concern was to supply local demand and not expand to new demands and different regions. However, NeoLuddism is much more related to the environmental implications that technology has brought to the world. Interference of technology in the way food is produced and cultivated; the way that automated factories produce cars that increasingly pollute the planet.

Many of the groups that are resistant to technology are so because of its environmental impact. Greenpeace is one of the most famous of these groups.

Their mission is to identify and criticize damages to the environment that are caused by industries and technology. For instance, the group is against the fishing commerce because “industrial fishing” has greatly reduced the oceans’ varied species of fishes. A typical Greenpeace action in such a case would be to block access to the areas where the boats deliver fishes at the harbour.

Greenpeace is one of the non-governmental institutions that worry most about global warming and climatic changes in the planet, emission of toxic gases by industries, and nuclear energy, amongst others.

Greenpeace is not against every kind of technology. At its core, Greenpeace is against climatic changes and technologies that negatively affect the planet. It has recently published “Guide to Greener Electronics” 74, which contains a ranking of companies that use clean technology in their products. Clean energy can be defined as: 1. Low level of toxic elements in the production of products; 2. Responsibility in recycling obsolete products; 3. Products that reduce the environmental impact during operation and production.

Nowadays, companies such as Nokia and Samsung are at the top of the ranking of clean technology because they have eliminated polyvinyl chloride (PVC) in the production of their products. Companies like Apple have jumped to the 10 th position after the company’s CEO Steve Jobs promised to remove polyvinyl from its entire line of products. Apple’s decision was made after a campaign promoted

by Greenpeace that was called “Green my apple”. The campaign gained

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Accessed 14 April 2009; available from

http://www.greenpeace.org/international/campaigns/toxics/electronics/how-the-companies-line-up; Internet.

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worldwide visibility and exercised pressure on the company’s Board to make the changes in their equipment. Neo-Luddites want to regulate and keep new technologies under control, warning people against their potential destructive consequences on society, humans and nature.

Another point to be considered is that Neo-Luddites believe that humans don’t get anything positive from technology and point out that they are increasingly dependant on technological tools. Analysing this idea, author André Lemos quotes Neo-Luddite Kirkpatrick Sale saying that technology will never be neutral: “A great misunderstanding of our times is the notion that technologies are completely free of influences – because they are inanimate artefacts, they do not promote certain behaviours in detriment of others. In truth, technologies follow intentionally or unintentionally the social, political and economic inclinations. Every tool promotes in its user a particular way of seeing the world and specific ways of interacting with others. It’s important that each one of us consider the influences of various technologies and look for those that respect our values and aspirations”75.

Sale believes that humanity has little time, approximately 25 years more and that even if people try to live longer, humans will realize that technology has brought negative influences to everyday life without benefits for the future. He believes that humans are ready for the “technological Armageddon”.

Other famous Neo-Luddites such as Jerry Mander and Steve Talvbott believe that technology interferes with education and that it has a negative impact on the environment. Neo-Luddites also believe that the existence of computers cannibalize other languages and cultures.

Neo-Luddites are far less “violent”. They write books and articles, give lectures and make presentations to small groups. They believe that by influencing others they can popularize the non-use of technological tools.

“The Luddites of 1811 to 1812 smashed machines.(...) They did not

75

André Lemos - SALE, Kirkpatrick Sale, Rebels against the Future: The Luddites and Their War on the

Industrial Revolution: Lessons for the Machine Age (Jackson, TN: Perseus Books Group, 19960), 785 - 788.

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voluntarily give up technologies of convenience or status, as do many neo-Luddites today. (...) marched through the darkness to sabotage the machines that promised increased productivity in their trades”76.

Another thing much criticized by Neo-Luddites is the “increase of free”. They believe that the exchange of information and free products goes beyond spreading technology in the world. Commerce helps corporations while destroying workers’ means of subsistence in developed and underdeveloped countries, ending job positions in the industry.

4.4 - Distribution channels in those days The historical scenario in which Luddism emerged was marked by the difficulties suffered by British exportation, due to a continental siege imposed by Napoleon Bonaparte in 1806, followed by problems faced obtaining cotton for the textile industry, since in 1812 Britain was fighting the United States in war (its main supplier at the time). In that same year, on May 11, something rare in Britain’s politic history took place: its Prime Minister Perceval was murdered inside the House of Commons. The rebellious atmosphere could be felt all over England, and as one of the greatest historians on Britain’s working class – E. P. Thompson – believes, the Luddites’ movement extrapolated its original objectives aiming at “bringing down the entire government system and starting a revolution”77. This was the reason why the British Parliament approved in 1812 the death penalty for anyone who destroyed machinery, despite Lord Byron vehement opposition.

Another thing to be considered is the Luddites’ naivety in wanting to destroy the machines. They believed machinery was their biggest problem in the factories because they had no means of competing with production in series. However, they missed the fact that machines could be found everywhere. At the time, great discoveries due to automation and production in series were happening and technology was being used in transportation, especially in steam boats, a technological landmark of those days. Carriages, horses and boats were being substituted by steam trains and steam boats. The developments in transportation

76

E. Steven Jones, Against Technology. From the Luddites to Neo-Luddism (New York, NY: Routledge,

2006), 47.

77

Accessed 27 April 2009; available from http://en.wikipedia.org/wiki/E._P._Thompson; internet

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meant that products distribution channels were changing, regardless of if they were made by a machine or an artisan. Greater technology applied to transportation allowed greater production demand that could only be met by the automated factories.

New distribution channels helped local markets, for instance, factories in Nottingham could extend their production to other parts of England. Automation was the only way to incorporate the new market demand, which makes one infer that the Luddites didn’t understand people’s new demands at the time. In those days, a family centralized its needs on its local production. They produced enough to make their lives comfortable and work gravitated around it and not the other way around. This was the reality before the Industrial Revolution and maybe the Luddites’ greatest objection.

Analyzing the period in history proposed by this research, i.e. since Industrial Revolution until now, Cambridge professor and writer Carlota Perez makes a very interesting analogy between 18th and 19th century distribution channels and today’s ones: “When one talks about the Industrial Revolution at the end of the 18th century in England, one always has in mind the textile machinery and the great leap in productivity promoted by it; however, very seldom one mentions the distribution channels that allowed transporting cotton, coal and other products throughout the country, crossing rivers and reaching the sea. This was those years’ internet. The following technological revolution, the steam machine from the 19th century created railroads, telegraph and standard postal system. In the 1920s trains, horse and steam carriages began to be substituted by cars and airplanes because times.

These new technologies, as well as the radio, were object of intense speculation and also contributed to the collapse in 1929. The distribution networks of the first Industrial Revolution, the 19th century railways and the 20th century highways are examples of infrastructure networks that were only built because there were big investors disposed to spend their money in something that took a long time to result in operational profits”78.

78

Carlota Perez, “O melhor está por vir,” Veja magazine, Ed. 2114, 27 May 2009, 8-14.

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4.5 - The consequences of Luddism’s failure Before identifying the consequences of Luddism decadence in 1812, it is useful to make a small historical retrospective of what was happening in worldwide trade at that time.

In the beginning of the 19th century, great part of Europe was under the power of Napoleon Bonaparte, who had become French Emperor in 1804. England was the only obstacle to his empire in Europe, a country that enjoyed a privileged geographical position, economic power and naval hegemony.

Hoping to weaken the English economy, Napoleon declared that no European harbour should be open to commerce with the English. The decree’s success, dated November 21, 1806, depended on all European countries agreeing to Napoleon’s idea, and that included harbours located in the extremities of the continent, i.e. the Russian Empire, the Iberian Peninsula and especially Portugal.

The Treaty of Tilsit with Russia’s Czar Alexander I on July, 1807, guaranteed the harbours in Europe’s Far East. In order to complete his plan, Napoleon needed the same results at the harbours of Lisbon and Porto, either by means of a similar treaty or by military intervention.

A sore point in Napoleon’s expansion plans was the ambiguous position of Portugal’s government, which refused to adhere to the Continental Blockade due to its alliance with England, of which it was extremely dependant. Prince D. Joao, who had come to the Portuguese throne in 1792 because of its mother’s illness, Queen Maria I, couldn’t make up his mind about which option would bring less damage to the Portuguese Monarchy.

Since Portugal was a decadent reign, whose richness came from its colonies, mainly Brazil, it didn’t have means of confronting Napoleon. Remaining in Europe meant being under the power of the French. The alternative suggested by England, that of transferring the Portuguese Court to Brazil, seemed the best solution. This was supported by part of the Portuguese nobility and it also seemed very attractive to the English.

Many people in Portugal recognized that its importance in the international scene was related to its rich Brazilian colony, regarding it as the reign’s only possible salvation. For these people, the course of action to take was to establish in Brazil a Portuguese-Brazilian Empire.

Napoleon sent his ultimatum on August, 1807, obliging Prince D. Joao to interrupt any relations with England and arrest English people that lived in

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Portugal, confiscating all their belongings. In case Portugal did not obey, it would be invaded by French troops commanded by General Junot. The English tried to protect its subjects in Portugal from the French threat taking them back to England. At the same time, they tried to make D. Joao go to Brazil.

On November 1807, Portugal was invaded for the first time by a French army commanded by Junot, which included Spanish soldiers who entered Portugal via Beira Baixa. A much weakened Portuguese army couldn’t confront such a mighty and invincible opponent, and this was the reason why D. Joao decided to transfer the Portuguese Court to Brazil. He left behind in Portugal a Council of two members and two secretaries presided by the Marquis Abrantes.

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4.6 - Britain’s reaction to the Continental Blockade The United Kingdom reaction was quick: on January 1807, a few orders were given to the British Royal Navy with respect to ships that had French harbours as their destination. Ships that were found and captured in high seas were sold in auctions and had their cargo confiscated. British Navy’s power was much more efficient than Napoleon’s blockade. As a result, colonial merchandise simply disappeared from the markets of countries that took part in the Continental Blockade against England. Britain’s actions made the United States, one of the neutral countries, approve the Embargo Act of 1807 against the British that would end up leading to the War of 1812.

The Continental Blockade backfired against Napoleon. The blockade was criticized by the nations that were French “allies” and it contributed greatly in reducing Napoleon’s prestige in the territories he had conquered. Non compliance to the Blockade made France take harsh measures against the populations under its control, which involved military actions that were costly both in terms of economy and casualties, proving to be inefficient in the end.

Intervention against Spain and Portugal between 1807 and 1809 tried to make both nations adhere to the Blockade; the Russian Campaign from 1812 that would later on lead Napoleon to his demise was the Russian Czar Alexander I answer to Napoleon on April 27, 1812, demanding the latter to give up the Blockade in the country.

When we look at the Continental Blockade from different perspectives, not only from the economic one, we see that the United Kingdom was much better at dealing with its negative consequences than France, which ended up losing the battle.

In theory, Napoleon Bonaparte’s plan might have been perfect if it weren’t for the fact that the countries that did commerce with England depended on it for their development. In trying to suffocate England’s economy, the Blockade was also suffocating these countries’ economy. The plan would only work if Napoleon took over the commercial role England played, which was really unfeasible at times when France was still recovering from the French Revolution. Strangled by the Continental Blockade, the regions dominated by Napoleon watched their economies deteriorate and it was up to Russia on 1812 to finally defy the French emperor’s order and resume commerce with England. And thus begun the collapse of the Continental Blockade and Napoleon’s empire.

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4.7 - England’s prosperous times: the urgent need for automation in the production line In 1812, the French-Russian alliance was broken by the Czar Alexander I who had disobeyed the blockade against the English. To retaliate, Napoleon then started a campaign against Russia. Without much choice, Russia decided to use a war tactics called Devastated Land, which meant destroying entire cities to create favourable grounds for the defendant. Helped by the harsh winter, Russia managed to win the Napoleonic Army with only 10,000 men.

With freedom to use the main commerce routes, England began a period of search for new technology to be able to built ships and means of transportation that could make exporting to other countries quicker. In 1807, North-American Robert Fulton built Claremont, the first steam boat. Around the same period, the English Patrick Bell built a similar boat. In the beginning, steam transportation was considered useful for travelling on the channels and then for transatlantic trips. Their great advantage is that they did not have to adjust to the wind, which meant flexibility of time and destination. The steam boat technological invention was crucial in the development of international trade, mainly in England and the United States, which had envisioned the project.

The steam boat meant great opportunities for England. It could expand its activities and take English products to other regions and countries and this was only possible because of the automation in the manufacturing of products. The country, which was watching the Industrial Revolution come to life before its eyes, gathered all of its efforts to become the leader of worldwide trade.

Ironically, the Luddites came into existence during this promising and inspiring period for England. They probably didn’t have a clue of how far the whole thing reached and ignored automation’s true intentions. The expansion process and quest for new technologies were obviously going to alter English people’s routines, but once set in motion, there was no turning back without having to face losses.

From a macroeconomic point of view, in the worldwide scenario, England’s intention of becoming the leader of world trade was much greater than the Luddites’ importance. And perhaps this was the Luddites’ main problem. Their eyesight didn’t go beyond their local surroundings and could not see or weren’t interested in the worldwide scenario. The need to supply local demand with a family business was no longer feasible. And besides the local demand, there was

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the need to produce for other markets. In many cases, this was much greater and could bring more profit.

Production automation had serious consequences for the business model of those days. The process that used to be totally handcrafted gained a production line that substituted the labour of several men by a single machine, which meant less final costs. Consequently, products became cheaper and as such more accessible to a broader range of people, which created greater automation needed to supply greater demand and so on.

The consequence of automation was the formation of two big groups that were naturally selected by the new production demand. Many embraced technology and began to adapt to it, changing their work routine. Slowly, they kept their business going, having in mind that technology delivered innovation in the shape of products for people’s consumption. Those were the beginnings of capitalism in the world and some took it as an opportunity to improve business with the sale of products and services. Factories that used to produce handmade clothing for the upper class of those days, could sell more clothes not only for their former customers but also for the lower classes because products became cheaper. The advent of technology created new demands for factories and new markets, having outlived the Industrial Evolution.

As it has been herein explained, the Luddites were resistant to all these changes and didn’t see the need to review their model, having considered technology as a fad, giving no support to it because they were happy with the way things were.

They didn’t want to lose what they had already conquered. Perhaps their biggest mistake was not considering the possibility of losing everything if something went wrong in their local scenario. They simply didn’t have a different plan up their sleeves.

Another mistake made by the Luddites was the fact that they didn’t see the need to establish goals for their business model. They only wanted to reinforce the status quo and the benefits that came with it. As Kirkpatrick Sale is used to saying, “technology is not neutral”. That’s absolutely true. But what some people fail to see is that technology may have positive consequences, opening new job positions, creating new demands, opening new markets and giving more profit for companies as well as for society in general. People who understand this saw the need to setting business goals. In those days, much more than setting goals, the factories that saw the need to imagine what was around the corner were the ones that survived the period successfully. So it is crucial to associate the use of new

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technology to the need of knowing how the future might be by using these very tools. Trying to foresee and imagine new scenarios in an attempt to get ready for the future.

In face of this, it is not much wonder that the Luddites used violence against the new business model brought by the Industrial Revolution. They strongly objected to the sudden dismissal of skilled workers substituted by automated machines and to the changes it produced in people’s everyday lives, which meant socialeconomic paradigm shifts. One thing is clear: the Luddites did not want to see the present. They wanted to perpetuate habits from the past and not see the future.

4.8. – Luddism in today’s communication industry In order to find the similarities between the Luddites and some groups found nowadays in the communication industry, it is useful to make a brief review of advertising’s history. One needs to understand how companies and advertising agencies set up their business model to provide services to their clients, helping to solve marketing problems and sell products by using a broad range of media formats, such as TV commercials, newspaper and magazine ads, radio spots and more recently digital and mobile media.

The business model found in advertising agencies until today obeys a relatively simple way of thinking. When clients have a problem or challenge, for instance, increasing the sales of a certain product, they contact advertising agencies for a kind of consulting service. It is up to agencies to provide solutions that use the most relevant media formats to that specific target that the client wants to reach.

From the point of view of traditional agencies, they try to offer a solution to the client that uses the services of the agency’s partners: commercials in their partner TV channels, print ads in magazines and newspapers and so on. The business model varies from country to country. In some, profits come not only from consulting and ideas but also from the commission paid by media vehicles.

Therefore, when an agency presents a media plan to the client that includes a commercial on TV, for instance, the TV channel involved pays a commission for the advertising agency. For this reason, in countries where this is common practice, there is great interest in associating ideas for the client to specific media vehicles that can provide a good source of additional profit to the agencies.

But in the majority of countries, the most common practice is only consulting, either in strategic planning or advertising and creative execution. This guarantees

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less profit than the commission model.

With the advent of new technologies, today’s scenario is different than the one seen by traditional agencies. Since the World Wide Web came into existence in 1990, there has been an enormous technological demand. On the internet, people and companies have been able to exchange experiences, creating new communication formats and changing the way the target allows brands to communicate to them. In the traditional model, brands simply conveyed messages and informed the target. This was done in a unidirectional way without interaction. But in digital vehicles, communication is multidirectional and people impacted by advertising began to answer, suggest and interfere with products and services, sometimes in real time.

It is undeniable that technology has caused many paradigm shifts in communication, creating the need for agencies to review the way they do business. Technology has allowed new mediums that in many cases are controlled and created by users. Social networks such as Facebook79 and Twitter80 are far from becoming advertising vehicles because there are no business models that generate profits to agencies and clients. Commission is not stimulated and agencies need to find new formats and acknowledge people’s new demand. Without question of a doubt, the use of these new formats by users is common practice; however, are traditional agencies interested in reviewing their economic business model?

This is where one can find the similarities between Luddism and traditional advertising agencies. There is a kind of “Continental Blockade” imposed by agencies. In order to try and preserve their relationship with media vehicles that pay commission (TV channels, newspapers, magazines), advertising agencies continue to use great part of their clients’ budgets in that direction. Agencies have a distorted vision of the results. As it happened to the Luddites, they see good results when this means results similar to past results. They believe they can continue profiting in the same way, ignoring that the scenario has changed and that the future is just around the corner. For “Luddites” professionals in the communication industry, technology brings more stress and problems to an agency. In many cases, the need for change in the business model is harmed by

79

www.facebook.com

80

www.twitter.com

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the fact that everything that is new involves difficulties and low profits at the beginning.

Traditional advertising agencies bear another similarity to the Luddites. They are prepared to readily use the technological tools that present advantages to their interests. For instance, they invest lots of money in measuring result technologies for TV channels, radio and print media. Perpetuation of the same business model guarantees profits to agencies and companies, delaying advances in the way people can consume products. But times are changing. More and more people are using new technologies to modify their lives, seeing products and services with different eyes and forcing companies to review their strategies. Companies will need to review the way they manufacture their products and maybe create new demands in people. As a consequence, communication agencies will also need to work differently with their clients.

But how is it possible to turn a traditional advertising agency that behaves like a Luddite into a communication company relevant to its clients, creating for them new means of communication to reach today’s target? How is it possible to turn companies that practice “Continental Blockade” into agencies that have a broader vision of the business? Probably this is where traditional advertising agencies are most similar to Luddites. They insist on having an outdated perception of the business, failing to recognize that there is a different offer demand from a certain group of people. It is no longer possible to recommend only mass media vehicles (i.e. TV, newspapers, radio, magazines) to solve today’s clients’ problems.

More than new machinery, nowadays there are new distribution channels for products, messages and services. If we compare this scenario to the one of the Industrial Revolution, nowadays there is more than one England that hoped to lead worldwide commerce. Due to new technologies, there are several companies prospering in the cyberspace 81, which provides an even bigger challenge to advertising agencies. If compared to the tasks Napoleon Bonaparte had to face, today’s advertising agencies’ tasks are much bigger because their clients’ competitors might enjoy omnipresence in many digital platforms. Blogs, social networking and projects made by brand consumers question the very role of advertising agencies.

81

Accessed 7 April 2009; available from http://en.wikipedia.org/wiki/Cyberspace; Internet.

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Chapter V 5. – MadProject MAD PROJECT aim’s was to obtain the opinion from advertising professionals in relation to important issues in today’s communication industry such as: confrontation between different generations, professionals’ different cultural references, where and when it is important to absorb new technologies in communication and to what extent technology may influence the idea and the final result that is presented to the client. Also, the research hoped to answer the following question: how would it be possible to convince a Luddite that works in communication of the need to “review” the business model?

In order to avoid using traditional research formats that entail old-fashioned questionnaires and interviews, MAD PROJECT made use of a new interactive research format called entertainment research. The entire research was adapted to an interactive story presented in the site www.madproject.orgfree.com between June 01 and July 06, 2009, asking users to answer questions made in a video. To draw people’s attention and make them participate, the interactive video was a parody of HBO’s TV series called “Madmen” (2007)82.

In the HBO TV series, the main character is Donald Draper, creative director of an advertising agency from the 1940s in the United States. At the time, big advertisers such as Lucky Strike, Coca-Cola and Volkswagen had just discovered the need to make use of communication actions, and the series shows the agency’s everyday life, its team and the relationship with the clients.

As previously mentioned, a parody was created, which was unauthorized and non-profit, solely with the intention of stimulating adherence to the research by means of an interactive questionnaire.

The questionnaire focused on and was valid only to communication professionals from around the world. 720 people answered it, people between the ages of 18 and 56, from 35 different countries. Results measuring happened in real time in the site and results were also measured by Google Analytics83. The issues contained in the research were divided in 6 questions. Since the research used Google Analytics, it was possible to obtain a result report provided by this tool.

82

Accessed 12 March 2009; available from www.hbo.com; Internet.

83

www.google.com/analytics

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Figure 09 Madproject: introduction of the website.

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Figure 10 Madproject: Entretainment interactive questions.

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Figure 11 Madproject: Interactive Videos

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5.1 – Research conclusions and recommendations After the results of the MADPROJECT research were analysed, it is possible to say that the great majority of participants believes that it is necessary to add technology to an idea, not necessarily in this order. They believe that nowadays, the creative idea cannot be disseminated to its full extent if it is not related or promoted through some kind of technology. However, needless to say that these paradigms shift in communication needs the “acceptance” of new technologies.

In order to enrich the quantitative results obtained with advertising professionals in general, the present work also made use of the qualitative results gathered by Arne Stach in his paper “AHEAD – inside the world’s most creative agencies”84 because they reveal the opinion of some of the greatest names and leaders in today’s

advertising

world.

People

such

as:

Tony

Granger

(CCO,

Saatchi&Saatchi, New York), Paul E. Sewards (Managing Director, Big Spaceship, New York), Rich Silverstein (Creative Director, Co-Chairman, Goodby Silverstein & Partners, San Francisco), Alex Bogusky (CEO, Crispin Porter + Bogusky, Boulder), Mark Waites (Creative Partner, Mother, London), John Hegarty (Worldwide Creative Director, BBH, London), Jeremy Craigen, (Executive Creative Director, DDB, London), Simon Waterfall (Executive Creative Director, POKE, London), Sean Thompson (Creative Director, 180 Amsterdam, London) and Erik Kessels (Executive Creative Director, KesselsKramer, Amsterdam).

The crossing of information between MADPROJECT and Arne Stach’s work made it possible to arrive at some interesting conclusions and recommendations on how it would be possible to convert a communication Luddite into an “adopter” of new technologies.

84

Arne Stach, AHEAD – inside the world’s most creative agencies (final paper presented at University of

Duesseldorf – Kommunikationsdesign), 2007.

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5.1.1 – Seamless transition and a subliminal change 54% of users believe the best solution is digital strategy

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It is necessary to understand that a digital strategy is not a completely different discipline from the other disciplines or fields within communication, such as the use of traditional media such as newspaper, magazine and TV films. There actually is a great need to understand the technologies involved; nonetheless, for a great communication action to happen and reach the largest amount of people, it is necessary to have a creative idea or solution for the message to be transmitted to the people. The innovation is broadly related to the combination of a great idea with an execution. Another aspect that should be understood is the diffusion, as Carlota Perez suggests in her article entitled “Technological Revolutions, paradigm Shifts and Socio-Institutional Change” mentioned in previous chapters within this project. It is a fact that people’s behavior is increasingly differentiated, transforming people into not only receptors, but broadcasters and receptors of a message. That means that some people start having the role of a medium, which is, spreading the information or message.

The medium is definitely no longer the message.

This feeling of transition achieved without the need of a great change can be exemplified by Rich Silverstein, Co-Chairman at the American agency Goodby Silverstein & Partners in San Francisco, described in the interview done by the author Arne Stach: " …And then when we started understanding the internet that it was just a technology platform, that we could still put our storytelling to it just exploded. And so now art directors and writers and internet people – in fact we don’t have an internet department. We do have specialists but its’ one big department. Art directors, writers, internet people they’re all one people85."

Thus, it is necessary to use all the knowledge generated until then in the history of communication and continue following the evolution of the mediums, parallel to technological development. Performing a slight transcription in regards to the incorporation of a new communication platform.

85

Arne Stach, AHEAD – inside the world’s most creative agencies (final paper presented at University of

Duesseldorf – Kommunikationsdesign, 2007), 107.

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5.1.2 – Old school meets Generation Next 57% of users believe the best solution is to mix Baby Boomers and members of the generation next in the same team to create fresh ideas

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It is believed that many of these Luddites that work in the communication market are segmented within the Baby Boomers, in other words, people that were born between 1946 and 1964. One of the factors that back this statement up is the distance between this generation and new technologies. Making a fast summary of this generation, Baby Boom was a time when the birth coefficient grew sharply.

The dramatic increase in newborns during the baby boom period helped exponentially increase the search for consumer products, houses, cars and several services, not only creating the worldwide middle-class phenomenon86 but generating a small demand for technological innovations as a form of consumption as well.

In face of this landscape, the writer Don Tapscott made an interesting discovery in his book Growing Up “Don. Grown Up Digital: how the net generation is changing your world” crossing Baby Boomers with the newest generation, Generation Next within the professional environment through the following passage: “That firewall will stop older people, who know the business, from absorbing the Net Gen way of collaborating, and especially their techniques of using collaborative tools, such as wikis, which allow many users to create and edit documents. It also prevents Net Geners from learning from the experience of old employees. Breaking down the firewall can separate the winners from the losers.87” It becomes clear that the only way the Baby Boomer generation can survive presently

is

understanding

their

importance

in

the

work

environment.

Understanding how the youngsters want and need to listen to past experiences, lived by the Baby Boomers to design the near future. One of the main characteristics of Generation Next is the fact of being able to get solutions within complete democracy, not only expressing their opinion, but especially listening and spreading something they find interesting. The Baby Boomer in question must be certain of the importance and not be afraid to become irrelevant for the present days. Without the presence of the baby boomers, it will not be possible to see the future in the communication market.

86

Accessed 11 February 2009; available from http://en.wikipedia.org/wiki/Middle_class ; Internet.

87

Don Tapscott, Grown Up Digital: how the net generation is changing your world (Columbus, McGraw-Hill

Books, 2009), 169-170.

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5.1.3 – Technology is idea driven 73% of users believe that an outstanding idea comes first, and then, if it proves to be the case, add technology to it.

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In a world packed with technological tools and solutions, nothing works if people do not have an insight, an idea before the execution. There are very few cases in which a technological discovery brought about an innovation alone. Nonetheless, in the great majority of cases, a great idea has always originated technological innovations, as stated by Jonh Regarty: "I think the digital revolution is sort of another example of how technology one, you know gives us a broader audience. And allows us to create more interesting and distinctive advertising. I mean it’s having a profound impact on the industry just because it’s opened up so many more avenues with which we can talk to people. Which is fantastic. After all that’s what we’re trying to do isn’t it?88" In the light of this fact, it is important to note that Generation Next must be aware of the importance of not only focusing on future innovations in the technological field. Otherwise, this generation will be known just as an inventor and not an innovator.

88

Arne Stach, AHEAD – inside the world’s most creative agencies (final paper presented at University of

Duesseldorf – Kommunikationsdesign, 2007), 243.

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5.1.4 – The dawn of a new way of doing business 53% of users believe digital is the most innovative media.

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This point is directly related to the first conclusion called Seamless transition and a subliminal change. The great difference should be associated with the actual existence of a change, not a transition. Still on the first point, it is clear that the teams should face the digital discipline and platform as being one more form of communication, wilts in this case there is a great change related to the business model origin. The need for a change will be crucial and imposed through the opinion formers and company directors so that the employees understand the severity and the need for the change, as described by Paul E. Sewards, from the American digital agency Big Spaceship: "There’s a big impact on the culture because what are we all here for, are we here for the work, for the sense of creativity, for each other, or for the bottom line? Unfortunately, some agencies have been really driven by that bottom line priority, shareholder value89" The natural change of the business as a whole is related to this point. People started buying the products in a different manner, comparing and many times questioning the purchase, for example. On the other hand, the companies started offering products and services they had never thought about before. The great catalyst for this change was the advent of new technologies, and as mentioned previously, they change at an increasingly accelerated pace.

As a premise for this topic to be effective, it should be tied to and executed in the short term, the great difference between a change and a transition pertains to the way it is done, tied in with the timing in which it is done, as described by Mark Waites from the English agency Mother: "Digital is like a tsunami. It’s like this big wave, that you cannot stop, you can’t fight. You’ve gotta go; you’ve gotta go with it, but understand

it’s

changing

everything

in

its

wake.

(STACH;

2007;p.211)"

89

Arne Stach, AHEAD – inside the world’s most creative agencies (final paper presented at University of

Duesseldorf – Kommunikationsdesign, 2007), 72.

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5.1.5 – Consumer-oriented content 58% of users believe the best communication strategy is to use various mediums to reach a specific target. The consumers select the media and not the other way around.

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“…I think this is a very good time because the last few years our consumer – you know they have much more power. If you compare this to 15 years ago. The advertisers, they had the power and they also pushed things towards consumers. You can’t do that anymore now. Which is nice because then you can be more realistic. And it’s not like a paradise anymore. That you present to people.90” As Erik Kessels from the Dutch agency KesselKramer describes, the paradigm shift in communication was the result of an even greater paradigm shift. In the impact of new technologies in people’s lives. As previously mentioned in the body of the research, the technologies could reinvent the way people use services, the possibility of exchanging experiences and knowledge with other people in a question of seconds and especially in the way each one is capable of customizing his/her needs. There are numerous improvements and new opportunities technology can bring to people’s lives. In the capitalist and consumer world in which we presently live, the brands are not distant and increasingly seek identifying future innovations even before the people do. The issue is that these technological changes are increasingly faster and difficult to follow. As a suggestion for the brands, maybe the best way to try keeping up would be brands very clearly having the desirable platforms and formats for future actions. Otherwise, it would be practically impossible for a brand to be able to keep up with all future points of contact of the desired target audience. Thus, one of the safest ways to try to follow these trends would be in the attempt to produce content and products pertinent to people within the chosen channels and points of contact. The brands would generate new demands for products and create new opportunities for the consumers, as mentioned by the CEO at Crispin Porter + Bogusky, Alex Bogusky: "…our goal with most of the people we work with is to create marketing without advertising, right, and, again, that’s why our push towards the product. If you get the product just right you don’t need advertising, and if you do need it you’re just sort of telling that product story. (STACH; 2007;p.176-177) "

90

Arne Stach, AHEAD – inside the world’s most creative agencies (final paper presented at University of

Duesseldorf – Kommunikationsdesign, 2007), 357.

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In this case, the main change would come from the clients and companies that have to manage the communication strategies, since they would do the communication not only of the communication mediums, but bring new products and contents to people as well. It is understood that this second form becomes more and more efficient and causes the brands to follow people’s lives in a more passive way instead of intrusive, creating more of a long-term relationship with the future consumers.

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5.1.6 – Open source of ideas 64% of users believe that creative work should be ensemble, an open source of ideas brought together by the concept and not by execution. The idea determines the media and not the other way around.

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Presently, the world lives in a much more participative society. Enthused with acquiring more and more information and consequently more knowledge, people are sharing information and ideas. This reality causes everyone to win. In an open platform, where everyone can collaborate, it is possible for other people to evolve the thought, transforming the idea into a much greater innovation.

Similarly, companies keep an eye on this movement and in a partnership with consumers try to find ideas and services that benefit people, as mentioned by Creative Director at the agency 180 Amsterdam, Sean Thompson: “Okay, here’s the pitch. We’re gonna start with the retail rather than normally starting with the advertising.” Especially with Adidas and Omega and BMW as well we’re finding that the opportunities are there and the clients are very eager to have product ideas. You can sort of put things within those ideas of the product that are connected to your campaign or your idea, your big idea.91" In this case, the brands assume the role of a catalyst and manager of these new innovations and many of these ideas are possible because of the new technologies.

5.1.7 - The importance of communication heritage All the considerations above are valid within the premise that all communications, more specifically the communication done by the brands, have always been built through the successive breaking of paradigms in communication. The role of advertising has always been intrinsically connected with product innovation, new experiences, as once again describes John Hegarty: "...just how it’s impacted on this agency is just that the number of other people that we have who are working here now who are you know engagement specialists and engagement planning. How they are website designers. How they are digital people who understand how to work in the digital area. Have technology skills. So it’s broadened our base enormously in the last two or three years. And

91

Arne Stach, AHEAD – inside the world’s most creative agencies (final paper presented at University of

Duesseldorf – Kommunikationsdesign, 2007), 331.

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will continue to do so. But I also think you know in doing all of that we must understand the power of broadcast media. And broadcast media is still fundamentally important.92" In sum, it is important to recall and use everything communication has built to date to continue surprising the consumers.

92

Arne Stach, AHEAD – inside the world’s most creative agencies (final paper presented at University of

Duesseldorf – Kommunikationsdesign, 2007), 245.

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Final considerations The historical retrospective presented by this research shows that it is not possible to remove technology from the history of communication. Since the radio was first introduced, communication has always used technology as a means of delivering its message. Moreover, throughout the history of communication, technology has always been responsible for materializing the ideas of visionary professionals who envisioned new ways of delivering messages that had never been thought before. And thanks to these professionals that dared to go against the status quo, the world has been witnessing surprising advances in communication. These geniuses have always foreseen opportunities in technology and not threats, and thus have changed rules and paradigms.

It seems that there always has been and there always will be some people who resist to new technologies. Nevertheless, a Luddite in the communication industry basically risks two things. First, he or she risks failing to take advantage of the richness technology can provide to communication at any given time, not noticing that a technological innovation has the potential of taking communication to new unimagined levels. Second, these professionals risk being left behind by those who do not ignore that times have changed and that take full advantage of everything technology has to offer to advertising and communication.

The consumer has changed and we can no longer ignore their suggestions, interpretations and opinions. Brands must evolve at the same pace of technology, if they want to remain fresh and surprising. Companies that wish to remain relevant to their consumers and ultimately have a close bond with them must deliver communication in efficient ways, being relevant, customized, allowing collaboration.

But there is something that has never changed regardless of technology or not, and that is the fact that a great idea remains the core and most important part of any and every great communication action. A great idea always occupies centre stage and when combined with new technologies, it can become even stronger, having the potential of becoming viral, of spreading like wildfire, of adapting itself to paradigm shifts in people’s behaviour.

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The best professionals in the communication industry have always been and always will be the ones who envision the future under a different light. Those who know how to use the strength of experience and acquired knowledge in the history of advertising to make new forms of communication even more efficient.

Innovating the present and foreseeing the future. “Because the people who are crazy enough to think they can change the world are the ones who do””93.

93

Think Different, Apple Inc. commercial. 1997. Made by Chiat/Day's Jennifer Golub and art directed along with Jessica Schulman and Yvonne Smith, with a voiceover narrated by Richard Dreyfuss.

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