| |
For
some time now, we have been hearing about the pending onslaught
of multimedia Internet services for the home consumer and the resulting
need for broadband infrastructure to deliver the multimedia content.
Yet, at this point infrastructure is not the major bottleneck to
the growth of multimedia over the Internet. The real issue is lack
of demand. The "dead coms" created such a buildup in infrastructure
that there is now an oversupply network hardware. That’s why Cisco,
Nortel, Lucent and others have been losing revenue.
The
main driver of Internet multimedia growth is going to be demand
from the end consumer. Currently, there is insufficient demand for
multimedia content from the home consumer to drive profitable broadband
business. It seems that there are still not enough people out there
who are convinced that there is enough valuable Internet content
and/or services to justify paying $50 per month and over for cable
or DSL in their home.
There
is definitely an abundance of impressive multimedia technology available
and in use on the Internet, such as Flash . But does it actually
sell anything yet? Probably not. Is it so compelling that it makes
consumers demand broadband in their homes so they can "experience"
this advertising medium and the subsequent privilege of purchasing
the product that the fancy, novel technology is pushing? Is Joe
Homeowner really going to say, "You know, I really want to spend
more money each month on fast Internet access so I can watch cool
advertisements, or watch grainy television feeds in a 4 inch window
via my computer instead of on my 32in Trinitron?" Not likely. As
we seem to have learned from round one of the dot com experience,
all the great ideas (and there were a hell of a lot of them) aren’t
worth jack unless they’re profitable.
If
customers — that is, end-user retail buyers- are going to use
the Internet as a medium for commerce, they will use it primarily
as an efficient channel for information regarding their prospective
purchase. As of yet, the most valuable information I get from the
Internet has been text based. I have not yet found fancy Web multimedia
presentations to be effective sources of information that compel
me to purchase products. Many are very cool for sure, but to this
point, it is arguable as to whether they actually transmit substantial
information, or at least whether it’s enough to profitably
sell a product.
In
short, an onslaught of demand for multimedia services over the Internet
might be a ways off. Unless, of course, free, high-quality streaming
porn becomes widely available, but that’s another story. It’s
still a bottom-line equation; until someone can figure out how to
make multimedia profitable as an advertising or entertainment device
for the mainstream, I don’t expect to see it as a huge driver of
demand for broadband. I don’t have any ideas right now, but
I’ll stream them to you when I do.
|
|
