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Does Broadband Have a Future?"
It is remarked, from ages past, that a picture says a thousand words. Sometimes, personal experience says a lot more.
I had the opportunity this past weekend to witness the promise of the broadband Internet-not in some intriguing but ultimately sterile trade show or conference room setting, which I had done countless times before, but amid the day-to-day comforts of my own family room. It was one of those rare moments in which one is granted a vivid, even immersive glimpse of the future. And I must say, it worked-startlingly well.
I don't pretend that this brief foray was unique or exceptional in any particular way. Surely, many others will have had similar or even more profound experiences. What struck me, however, was the very ordinariness of the situation, how easily such programming integrated into the familiar fabric of an otherwise routine day. The experience also stirred some convictions about how the broadband Internet can-and must-evolve if it is to gain as pervasive a presence in people's daily lives as television and cell phones and email occupy today.
First, the context. Two weekends every year, my family and I watch a nationally broadcast conference in which a number of speakers discuss important family and social issues. For most of the past decade, those Americans who wished to view the conference had two options-they could drive to a distant conference center, where the program was broadcast via satellite, or they could watch it at home on the local public access cable station. A little over a year ago, however, California cable stations decided to discontinue coverage of the conference, leaving families wishing to view the event from their homes the choice of purchasing an expensive satellite system or watching the proceedings over the Internet.
Twice, our family chose the latter option, placing a laptop computer in the center of our family room, attending to the tiny device as if it were some great oracle of wisdom. We dutifully plugged the computer's modem into the household telephone line, logged on to America Online, and watched. Or, I should say, listened. What Internet user has not had this experience? The video, when it was visible, was barely larger than a watch face. The sound was intermittent at best, and we repeatedly had to log off and then back on again in the hopes of securing a better connection. At times, in fact, we devoted more attention to the technical tasks of tuning in than we did to what the speakers had to say. It was hardly the uplifting time it was intended to be.
Welcome to Broadband
Last year, we had the brilliant idea of viewing the conference over one of the popular Internet-on-television services. I had written about such services for years, touting them as the "breakout" future of the Internet, convinced that this was the technology that, at last, was going to bring the Internet and e-commerce to the masses. But my interaction with these services to that point had been confined to those sterile trade show and conference room environments already mentioned. So I was eager to test the service first-hand in this "mission-critical" situation, and accepted a special America Online offer to subscribe to AOL-TV.
The set-top box proved relatively easy to install, and a quick call to a helpful AOL customer support representative enabled us to log on to AOL-TV in plenty of time to view the conference. We used the intervening moments to explore the AOL-TV channel guide, and found it (like similar channel guides on TiVo and many satellite services) to be an extremely useful tool. That, however, was the most satisfying part of the experience. For when we made our way to the conference Web site and attempted to tune in to the proceedings, we discovered that AOL-TV at the time supported neither RealPlayer nor Windows Media, the two most popular streaming media formats. We were left with no option but to return to an ordinary computer modem and the staccato broadcasts we had become painfully accustomed to.
This past weekend, though, was different. In the intervening months we had moved, and in our new home had secured cable-modem access via Excite@Home (yes, the company that, at the end of September, declared its long-anticipated bankruptcy). This past weekend, we gathered, not around a squinty-eyed laptop, but around a 850 MHz desktop computer with a large, high-resolution monitor. Our previous experiences with Internet-based broadcasts had taught us not to expect much, and when we logged on, it was with some trepidation that I enlarged the Windows Media window to its full 6-inch diagonal size. The window burst to life, and we saw the image of a speaker. His lips were actually moving in sync with his words. And did so, for speaker after speaker, throughout the full length of the conference. The experience was truly amazing, little different (aside from the smaller screen) than if we had been watching broadcast television. At times, in fact, we even forgot we were "watching the Internet."
I was reminded afterward of the evenings that our generation's grandparents and great-grandparents must have spent sitting around the radio listening to programs like "The Shadow" and "The War of the Worlds"-the first draft of what was to become the great age of television that so dominated and transformed Americans' day-to-day lives in the last half of the 20th century. I was convinced, as we sat around our family room that Saturday morning, that we were living through the quaint preview of an equally transformational age, one that our own grandchildren fifty years from now would look back upon with no small amount of wonder and reflection. It was, in this respect, as much an experience of traveling to the past as it was to the future.
What added still more weight and meaning to the moment was the fact that members of my family the night before had spent some time watching QVC on our regular television set, ordering early Christmas presents. This was commerce in action, sales offers being presented not by some static, slow-loading Web site, but by attractive and engaging human beings. The program hosts spoke as if individually to each viewer, demonstrating the details and functions of each must-have product with more depth and dedication than one would have received even at a physical retail store. Of course, viewers were constrained to follow the linear nature of the network's presentation, forced to sit through ten minutes of slice 'em, dice 'em kitchenware in order to hear about the really cool collectibles, but no matter. This was commerce that worked. And after watching the Saturday morning conference broadcast over our broadband Internet connection, I found myself inescapably wondering, what if...
The Content Challenge
It's a vision that nearly every other thoughtful observer of the Internet-from Bill Gates on down-has had during the past five or ten years, and its outlines need not be redrawn here. Unfortunately, the notion of interactive broadcasting over the Internet is one that, to date, has failed almost every time it has been tried, and so remains in a perpetual state of infancy. I have had the chance over the years to consult with a number of entrepreneurs bearing detailed, well-financed plans for creating broadband Internet broadcasting networks, and each of them stumbled on the same critical points: capturing and retaining an audience, and covering the inevitably immense costs to be incurred in the mean time. But greater luminaries than these have tried and declared defeat. Digital Entertainment Network (DEN), headed by some of Hollywood's most successful TV and movie producers. Ron Howard and Steven Spielberg's Pop.com. Michael Ovitz's Checkout.com. Quokka.com's best-in-class sports broadcasting site. And, of course, the numerous interactive television experiments of the 1980s and 1990s.
Now, even Excite@Home must join the list of failures. With more than three million subscribers-more than AOL-TV and WebTV and TiVo combined-it has become the nation's leading broadband Internet service provider. While cable-modem service is not without its glitches, at least one can manage to have it installed and operational before reaching retirement age. Innumerable are the stories of customers waiting literally for months to have the competing DSL (digital subscriber line) service installed-although DSL, too, once in place, does deliver equally high-quality streaming video images. But Excite@Home struggled during its short life with a number of strategic and managerial issues unrelated to its technology, not the least of which was whether to be an infrastructure or a content provider. Its executives seemed to prefer the latter, while AT&T, the lead investor, desired the former-an enduring conflict that was a major factor in the venture's financial demise.
Now that AT&T has completely taken over the Excite@Home operation, one can expect the broadband Internet service to mature into a stable and eventually thriving telecommunications network. But all of this leaves open the question of content-a question that Excite@Home was never able to answer with much persuasiveness. The portal's content was fine for a Web site, but not much to compare with regular television programming. And Excite@Home was hardly alone in this respect. I recall the celebrated launch of a competing cable-modem service-Time Warner's Roadrunner-in San Diego in the mid-1990s. At the service's unveiling, Roadrunner executives boasted of the magnificent potential that broadband would offer to Internet users and, to prove this point, they displayed a number of the city's most popular local Web sites-all of which were very text-heavy, and none of which performed much better than they did over a conventional 28.8 modem. So much for the advantages of broadband.
Indeed, the lack of adequate content was one of the most illuminating results of my brief flirtation with AOL-TV. Compared to the ordinary, PC-based Internet, the Internet-on-television experience was, to put it politely, positively horrible. Television sets were simply not made for reading text. And people sitting in front of TV sets generally do not want to read. They want to see faces, movement, action-all of which television delivers, and virtually none of which the Internet provides. People who wonder why Internet entertainment, for instance, has never taken off need look no further than Atom Films (now Atom Shockwave), arguably the most successful of its genre. Surviving while its competitors have long since disappeared, now reportedly on the verge of reaching profitability, Atom's repertoire consists largely of the quirky and original fare one would find at a good indie film festival. An intriguing afternoon's visit, perhaps, but it is not entertainment for the masses.
There is a lesson for Corporate America in all of this. The technology-the infrastructure-for broadband Internet delivery is here. Added technical maturity is needed, to be sure, but the model has been proven. What has been lacking is content and commerce. And it is to this issue, not the feasibility of broadband delivery or similar technical issues, that e-businesses must turn if they are ever to make the broadband Internet work for more than an occasional Saturday morning conference or afternoon indie film.
The question is: what will it take to get there?
The Broadband Ideal
The first answer is: maybe it doesn't matter. The two most widely praised e-commerce sites-Amazon and eBay-are the antithesis of broadband content. While containing scattered images that are oftentimes essential to portraying the products being sold, both sites are filled mostly with text, and are not very pretty from an artistic point of view (they both come across poorly on AOL-TV, by the way). And yet they serve their own purposes extremely well, conveying information efficiently and in an easily digestible format and, what is most important, helping people to quickly find not only what they are looking for, but many other interesting items that they did not even know existed.
At the opposite extreme are Web sites that are taking broadband seriously, companies that dazzle the eye with spectacular animated graphics that are a match for anything that television broadcasters have to offer. Fashion and beauty Web sites, predictably, are among the most advanced in this area, but everything from technology sites to e-commerce startups to even a few association and government sites have joined in the game. The animators must be proud of these impressive additions to their portfolio. But from a commercial standpoint, these Flash-based graphics, as pretty as they are, turn out to be largely a waste of bandwidth. Rather than communicating information, they typically stand in its way, as welcome as an endless, empty foyer would be in the front of every Wal-Mart. No wonder the "Skip Intro" button is so prominently displayed on these beautiful but informationally intrusive "splash screens."
The broadband Internet proponents, it seems, still haven't got it right.
So, assuming that broadband content eventually is going to matter to e-commerce, what will it take for the broadband Internet to be commercially successfully and worthwhile? It may be best to begin with the intrinsic advantages of the Internet over television and printed catalogs-namely, the interactivity and anytime/anywhere access that allow people to view whatever they want to see when they want to see it, and to inspect the items essentially to whatever depth they might like. Both television shopping channels and Web sites like Amazon's offer the depth of information, but traditional e-commerce Web sites lack the visual richness and human connection that TV shopping channels provide, while the TV shopping channels fail to supply the interactivity and anytime/anywhere access of the Internet. And paper catalogs afford users the ease of browsing that permits random, nonlinear inspection of products, but the information they convey is typically limited to a single small image and a paragraph or less of description.
An ideal broadband commerce environment, it seems, would incorporate the best of all three media: the visual richness of television, the easy browsing of paper catalogs, and the interactivity and depth of information of the Internet. Imagine, if you will, an interactive online QVC in which customers can choose which products they wish to see and in what order, combined with recommended links to related products (a la Amazon) that, when selected, launch an equally video-rich program. This format would likely be attractive to many shoppers, appealing as it does to the "remote control" mindset that characterizes a large proportion of TV viewers. But it is not likely to be universally regarded as a fundamental improvement over linear programs like the existing QVC or other home shopping channels, since many TV watchers prefer the predictability of having their viewing programmed, and do not want the burden of having to make so many choices themselves.
The Winning Formula
And therein lies one of the least often voiced but potentially most serious flaws in the broadband Internet model: it offers people a capability that they do not necessarily want. Cable television, with its 100-plus channels, gives television viewers the most visually rich programming they could imagine, along with such a sufficient number of choices that only a small percentage have converted to satellite systems with as many as double the array of choices. Would such viewers really want the "million-channel television" that a broadband Internet network would provide?
There is also the matter of cost. Television works in part because the production values are so high-and also very expensive. Some television shows cost a million dollars or more per episode. Even talk shows, game shows, reality shows, and infomercials-among the least pricey TV programming-cost tens of thousands of dollars or more per half hour. By contrast, while sophisticated Web properties like Amazon, eBay, and Yahoo! can require several million dollars per year to build and operate, most high-end Web sites cost one or two orders of magnitude less, and a Yahoo! store or Amazon zShop costs only a few thousand dollars (plus a percentage of sales). The inescapable reality is that producing broadband Internet content-whether for entertainment or commercial purposes-that is as compelling as linear television programming is likely to require production budgets that rival those of sophisticated TV programs. It is a cost equation that has doomed such well-heeled ventures as DEN and Quokka, and is likely to claim many of the rest who would follow in their digital footsteps.
So does broadband Internet really have a future? Absolutely, at least in the limited sense of conferences and other specialized, highly targeted broadcasts like those that my family and I experienced over the weekend. The now infamous Victoria's Secret online fashion show of two years ago demonstrated that certain commercial events presented over the Internet can have widespread appeal (although the audience surely would been even larger had the fashion show been broadcast on television). But the Victoria's Secret show, which was neither archived nor repeated, was the proverbial exception that proves the rule. Indeed, it is almost universally recognized that one of the main reasons for the low uptake date of broadband Internet services so far is the widely perceived lack of value, particularly the lack of unique and compelling broadband content.
In the face of this experience, the challenge to content providers, especially e-commerce ventures seeking to deploy broadband programming to commercial ends, is to develop a value proposition that offers appreciable benefits beyond those already delivered by other marketing and sales media (including traditional Web sites) but that is nevertheless affordable. While a few e-commerce providers may be making progress in this area, the winning formula, it appears, is still a long way off.
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