POST OF THE DAY
AOL-Time Warner
In Reply To:
Wired piece on AOL Spin-Off/Broadband

Format for Printing

Format for printing

Request Reprints

Reuse/Reprint

By Goofyhoofy
September 19, 2002

Posts selected for this feature rarely stand alone. They are usually a part of an ongoing thread, and are out of context when presented here. The material should be read in that light. How are these posts selected? Click here to find out and nominate a post yourself!

What I don't get, however... is some tech proponents unrelenting assertion that broadband is the cure-all for our economy or the tech sector

I don't know anybody who thinks it is a "cure-all". It is, however, another large step forward, which promises to encourage another upgrade cycle - of processors, computers, delivery infrastructure, software, media content and advertising. That is a multiplication in many fields, which spells g-r-o-w-t-h. It's not going to save the union, or even rescue the economy, but it couldn't hoit.

The main use quoted for broadband, is movies on demand.

Well I don't see it "quoted" that way. The main use for broadband already exists, and it's "music". Millions of people are pulling down songs over their broadband connections right now, today. The fact that the music industry hasn't figured out how to monetize it for their own benefit is not surprising. Time Magazine didn't know how to charge for the use of its content over the Internet a decade ago, arguably it still doesn't. It will eventually.

The Motley Fool is trying different business models, in case you haven't noticed. So are a lot of other businesses. Eventually somebody will figure it out. (It took "radio" a decade to evolve to an advertising supported service back in the early 20th century. Back in the early, early days it was supported by the sales of radio sets.)

Porn is another one that is making money now. Movies will probably be a fair business someday, but I note that there are far more gas stations and grocery stores than Blockbuster locations, so I don't expect "movies" to be the be-all and end-all.

Video-on-demand and pay-per-video (as opposed to "movies") is another segment which will happen, given another decade or so - (which presupposes a critical mass of technological potential users, as well as societal comfort with the new uses of the medium.) "Instructional" will be one segment ("how do I repair my thermostat?"), as will "passionate enthusiast" (yoga, Britney Spears, etc.)

Broadband also encourages - no, "allows" - the use of the net for catalog shopping. It is all but impossible for a user to page flip through a Sharper Image, Brookstone, whatever catalog, not to mention pull up page after page of Home Depot inventory across a dial-up connection. It is possible across broadband, although it will take some cultural conditioning to get people used to doing it.

In the same way, I note that research shows the Weather Channel losing viewers to Weather.com (which they own) because it is faster for people to bring up the website and get the forecast than wait a mere 10 minutes for the local insert to come up on their televisions. Imagine when you had to wait 30 or 60 minutes on your local radio station, or wait for the 11 o'clock TV news, back when it was the only thing available.

People's habits change. Nothing will be the same forever, and small increments sometimes make for astonishing differences. Everybody thought Ted Turner was a goof when he bought Channel 17 in Atlanta, and most people thought Steve Jobs just a showoff kid. Broadband is a change; it is impossible to say "how big" or "how much" ahead of time. It always is.

However, my main concern regarding broadband is that instead of serving me, by making me more productive, it allows for more superfluous programming that eats up all that speed. Pop-up adds, silly animations and graphics will surely dumb down this medium.

The superfluous programming you talk about is yeast in the advertisers' eyes. They will surely use - and abuse - the bandwidth in their attempt to make online advertising more productive. At the moment it is little more than static magazine ads, just smaller. Loading a simple banner ad and graphics headers across a dial-up probably eats 75% of the bandwidth of a Fool page. A broadband connection will allow them to do more tricks at proportionally less bandwidth cost. I'm sure many will be distressed at advertisers' attempts to garner attention, but that is the name of the game, and they pay a fair portion of the bills. (100% for broadcast TV, 75% for cable TV programming, 100% for radio, 60% for magazines, 40% for newspapers - 70% if you include "classified advertising.)

But having more graphics and eye candy doesn't improve my productivity. I work online. I'm online 10-12 hours a day sometimes. Sure, I need it. However, the average consumer... do they need it?

Well, let's follow the logic. Do they need 56k? Why not just drop down to 33.6k? But wait, do they need 33.6? Why not be happy with 19.2?

You can make a buck by giving people what they need. In many cases you will do better by giving them what they want. More speed is better, inarguably. At what price? Now that's worth an argument. As Steve Case said, the market will segment here; some people (a fair enough portion) will pay up for broadband. Some people will not. Heck, some people won't pay to be online at all!

They don't "need" it, you see. But some folks have made a ton of money finding out that people "want" to have e-mail, even if a few years ago they couldn't imagine such a thing even existed. I note, somewhat pointedly, that e-mail has gone from "want" to "need" for a significant portion of the population in less than a decade. My surmise is that "broadband" will follow a similar trajectory.


Become a Complete Fool
Join the best community on the web! Becoming a full member of the Fool Community is easy, takes just a minute, and is very inexpensive.