What Moore’s Law Means for You

When a graduate student in my New Media Business class this week asked me, “When is all this change going to end?” I remembered a marketing VP for a metropolitan newspaper asked me that same question in 1994. Neither the VP nor the graduate student understood what has been causing the media industries to change so much. Each thought the period of change would be brief, like a passing storm that creates windfalls but doesn’t really change the landscape all that much.

I often ask media executives what they think is causing the changes in their industries. Almost every time, I’m told the cause is people going online. That’s a bit like being told the cause of people driving is roads. It’s not the cause but the effect.

What propels all these changes? What is the spring from which these rivers of change flow?

Moore’s Law.

This has been the basic cause of these changes for more than 40 years and likely will be the source of continuing change for at least another 10 years, and perhaps a lot longer.

Media executives tend to misunderstand Moore’s Law as something solely to do with the power and price of computer chips. They don’t realize that the power and price of those chips are only two of its effects.

Moore’s Law is actually an observation, named after the first person to notice it. Chemical engineer Gordon Moore was a cofounder of the Fairchild Semiconductor Company, one of the first companies to manufacture computer chips. In 1965, Moore noticed that his company and its competitors were constantly improving the manufacture of computer chips so that approximately every two years chips’ computing power doubled but their sale price dropped by half.

Moore’s Law means ever-more powerful personal computers for less and less money. A computer chip that contained 2,000 transistors and cost $1,000 in 1970, $500 in 1972, $250 in 1974, and $0.97 in 1990 costs less than $0.02 to manufacture today. Likewise, a personal computer that cost $3,000 in 1990, $1,500 in 1992, and $750 in 1994 would now cost about $5 (a reasonable price today for a computer that could run no more than an operating system five generations out of date). In practice, it means that today’s laptop priced at $1,000 is probably twice as powerful and has twice the hard disc capacity of one that cost $1,000 two years ago.

The doubling of power and halving of price that Moore noticed has continued apace for more than 40 years. There are theoretical limits to how long it can continue; estimates are 10 to 12 years (however, the same estimates were given 10 to 12 years ago). Moreover, the limits might be breached if quantum computing proves successful (as it’s beginning to).

All well and good if you’re purchasing a computer, but that doesn’t describe how Moore’s Law is changing the media landscape.

The answer is that Moore’s Law effectively means that approximately every two years personal computers and other electronic devices can do twice as many new, innovative, and unexpected things than before.

Ten years ago, how many people would have expected or believed that people today would carry around with them hundreds or thousands or tens of thousands of their favorite songs in portable devices smaller than a cigarette pack? How many would have believed the cost of the software and hardware needed to publish or broadcast their own writings or videos online would drop so low and become so easy to use that anyone could do it? Or that online shopping would become a significant percentage of retail commerce?

Six years ago, how many people would expect that people today would routinely use laptop computers or pocket-sized devices to watch videos without DVDs? Or that millions of their own videos would be online? Or that the Apple Computer would be a major distributor of music and mobile phones?

Four years ago, how many people would have expected that millions of people today would routinely make telephone or even videophone calls from their personal computers? Or that mobile phone would be used primarily for text messaging?

Three years ago, how many people would have expected that almost all new cars today would be equipped with screens that map exactly where on what road the vehicle is and what route to take anywhere the driver wanted to go? Etcetera.

The examples are becoming too numerous to mention. Indeed, they double in number approximately every two years due to Moore’s Law. Just as a few years ago we didn’t expect to be doing many of things we today do with our personal computers, mobile phones, and portable devices.

Moore’s Law makes it virtually certain that two or four or six or more years from now, we’ll be doing more things we didn’t expect to do with electronic devices. Some of those things will be absolutely new, without any traditional precedents. It also virtually ensures that some companies will morph into other businesses (e.g., Apple Computer’s music business or the former lumber-and-paper company Nokia’s mobile phone handset business). New things. New opportunities. New competitors. Old companies evolving or dying. New companies rising. A changing media landscape. If you think you’ve seen a lot change so far, you ain’t seen nothing yet!

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