WILL THEY NEVER LEARN?
I've been an ardent early adopter of technology for over a quarter of a century, and it continues to amaze me how history continues to repeat itself.
Every new evolution in technology at times is treated as "the next big thing" and a category unto itself.
Today's investor and media fascination with internet video as a separate category is a case in point.
Never mind that video is just an additional data type being made increasingly more mainstream by the on-going adoption of wired and wireless broadband access.
It was never a question IF video would be a mainstream eventuality on the web, just a matter of WHEN. A decade ago, when AOL ruled the world of narrow-band, dial-up, one could have predicted that broadband video would eventually be as inevitable as night following day.
Yet, entrepreneurs, investors and the media treated broadband as a separate category unto it self for over a decade. First as an access/ISP category (remember @Home?), and now with video as a "broadband content" category.
This is not a new state of affairs.
Some of you may be old enough to remember when "Multimedia" on CD-ROMS, was considered a separate technology category unto itself.
As an example, Ted Leonsis, an entrepreneur who focused on this category, successfully sold a company he co-founded called Redgate Communications to a little-known online company called America Online (AOL) in 1993, and ended up on a road to being a billionaire. Not unlike two young guys recently who managed to sell an "internet video" company to Google for over $1.6 billion.
The reason I'm getting into all this, is that this tendency causes all kinds of short-term warping of business models, with adverse short-term consequences for mainstream consumer adoption.
A case in point is the subject of yesterday's post: the YouTube/Verizon deal to distribute online video over cell phones.
Rob Pegoraro of the Washington Post points out the how companies like Verizon and Cingular are treating online video, against the interests of their customers:
"It has everything to do with the way carriers have chosen to serve up video on cellphones -- and how little that has in common with how they provide voice and data service.
Both regular calls and Web access are sold without any real limits on their use beyond quantity: If you talk or browse too much, you'll get dinged in next month's bill. Otherwise, you can chat or click away as you wish.
Cellphone video seems to be taking a different path. Even as the Internet is turning TV into an a la carte experience, in which you can get individual episodes or clips from your choice of sites, wireless carriers are sticking with programming packages taken from cable and satellite TV service.
In doing this, they seem to be giving in to two of their least-appealing instincts: a need to regulate every single aspect of the mobile-phone experience and an irresistible urge to nickel-and-dime the customer..."
Never mind that wireless data package customers on these services already pay north of $50 a month for "unlimited" data packages.
This state of affairs comes about precisely because we treat online video as a distinct, separate development from the "regular" web.
It ignores the inevitable fact that in a very short time, a user is not going to be able to hit a web page of any type with out some form of video on it, flash or otherwise. It won't just be content, but more than likely will be advertising in video form.
One will be hard-pressed to figure out when the regular web ends and the "video web" begins.
Why then, all the customers of wireless data packages will then of course be violating the terms of service of their providers.
And the cell phone carriers will have no choice but to back down from their strategies designed to retard the adoption of video as a wireless data type.
But in the meantime, incumbent businesses keep adopting the same myopic, warped business strategies that failed the last time around.
amen.
Posted by: avneron | Tuesday, November 28, 2006 at 03:21 PM