NOT SO FAST, BUDDY...
There's been some enthusiasm on this site and others like Roger McNamee's TheNewNormal, about the opportunities and challenges with video over the Internet. The underlying presumption has been the WIRED Internet. The WIRELESS Internet still lags in speed and ubiquity, at least if you don't live in South Korea or Japan. Even audio, or to be clearer, music over the air (OTA) is problematic, even though the handsets themselves are bounding ahead with capabilities like 7 megapixel cameras, MP3 Players, and miniature hard drives from in the latest announcement from Samsung.
Our hopes in the good ol' USA, the former leader of consumer Internet access worldwide, have been far more humble for the next 12 to 18 months. Please sir, may we have some iTunes access through our cell phones please, sir?
No, says Motorola, who, along with Apple, had with some fanfare primed the market last July to anticipate an iTunes/iPod enabled cell phone. According to the Register, Motorola blames the wireless carriers, who of course would like to negotiate their slice of heaven for their walled gardens.
Which again, just serves as a reminder, that the next ten years of the Internet is going to be unlike the last ten years...where each new application and content service will have to painfully slowly bore through the walled gardens of multiple vertical industry silos to reach the consumer. Whereas the last ten years, due to the wonderfully horizontal nature of the PC hardware and software industries, seeing companies launching new applications or content service was like watching dolphins race each other across the waters.
Generally, the forces of technology, along with eventual consumer demand, win out with the verticalized industries becoming more horizontal. However, the cost in terms of time, fewer start ups, lost opportunities and jobs, and national wealth creation is painful to contemplate. And these verticalized silos are not just across industries, but also in terms of legal and regulatory silos (FCC etc.) within and across countries and different types of intellectual property.
The silver lining to all this might be that while these vertical industries (cable, telcos, wireless carriers, traditional media, etc.) are playing a defensive game as long as they can, hoping that their customers get "used to" paying high prices, they are creating a high pricing umbrella for newly emerging horizontally oriented startups that are exploiting emerging technologies and standards as soon as they can be nailed down.
In my view the inevitable result of these technological and content creator forces will be the decreasing verticalization of the media industry, and the increasing creation of horizontal layers that allow each layer to do its thing best.
We saw how the forces that drove the horizontal PC industry into record global user adoption, followed by a similar trend in the narrow-band Internet.
This next drove the on-going defensive consolidation in the phone and wireless
industries, which will be followed by the steps outlined above. Verticalized companies will go through the stages of going from defensive to offensive, with Sony's recent management moves being the most recent example.
It’s a slow process, and it’s kind of like watching the trickle turning into a flood from the blown dam, and ultimately bringing down the German bridge in one of my favorite WWII movies "Force Ten from Navarone". You just have to be patient, as Harrison Ford finds out.
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