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Monday, March 28, 2005

Comments

Alex Rowland

The PM revolution is indeed coming. An interesting issue remains whether providers of broadband services (DSL or cable) will continue to provide a free lunch to these disintermediaries. This is a clear threat to their business model (they won't earn anything from the content sent over their connections under current all-you-can-eat consumer agreements). The more prevalent this becomes the more likely we are to see some sort of reaction from the telcos and/or the cablecos. They don't want to be pipes and wires only. That's a path to low margins a far as the eye can see.

Michael Parekh

That is the critical question...not sure they'll be able to do much about it by then because hopefully they'll be in intense competition with each other for the incremental customer. This is not dissimilar to when the telcos wanted to be the portals on the "dial-up" web a few years ago, but gave it up after trying, failing, and realizing that it required an entirely different skill set to compete, and that it got in the way of their really acquiring customers through partnerships with portals. With folks like Yahoo! moving into content distribution, this is a scenario that'll likely play out again...we'll see...

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