Broadband is coming to the local loop. Do I hear you say ’so
what?’. Well, who’s to blame you for wanting to sidestep this latest
piece of jargon?
But stay with me, broadband really is set to change everything. Even
that scared rabbit BT is gearing itself up to offer 550 kilobits per
second, against the 56 kbps with which we have had to make do for the
past five years or so. Over the next few months, BT and the cable
companies will be fighting to roll out their pipes. They know that if
they don’t do the business soon, this month’s gerzillion-pound bidders
for UMTS licences will use the spectrum to steal the relationship with
24 million British households.
What’s coming is enough for full-frame, full-motion, real-time video for
the PC and the new pipe will go both ways, laying the foundation for
truly interactive TV.
Broadband is rattling cages. Not so long ago, we were hearing plans to
support TV shopping channels with e-commerce. Broadband undermines such
schemes by combining the functionality of both and making them a
This leads to a host of questions. How are narrowcasts to earn their
keep? For example, will ’sit-up’ users have enough of an appetite for
video-on-demand to pay for it? It’s got to be a possibility; after all,
they’re paying for pornographic stills right now. If a PC-based roll-out
takes off, will it pre-empt TV-based video-on-demand or near
video-on-demand? We find this hard to call, but multiple platforms
certainly complicate the landscape.
What about advertising? Users are used to ads during TV programming, so
they ought to be willing to tolerate the internet’s equivalent; the
But what about the premium ratecards once expected for ’profound’
advertising which uses databases for close targeting? This is looking a
bit wobbly at present. In Europe there remain data protection
No matter how the revenues come, broadband is set to goose up the cost
line. If indiatea.com is providing a TV-like web page, then chinatea.com
must do the same or fall behind.
And users demand new material every day. This threatens to demolish the
economics of e-commerce, which is set to become more like running a TV
station with new programming at dollars 20,000 to dollars 2 million per
It may not be quite as bad as that, but no matter how you cut it,
broadband is set to add to the cost of web content. This introduces
serious economic barriers to e-entry for the first time since the
internet got off the military reservation in the early 90s. Incumbency
could begin to matter. Could this be the saving of Amazon?