The Content of the Pipe

Members of the ISP-Marketing list are eager to sell fatter bandwidth pipes to their broadband residential customers, but fear that there's nothing to put through the bigger pipes.

[October 17, 2002]

On the ISP-Marketing list in September, BH inquired,

"It's often said that one of the reasons DSL hasn't caught on is because consumers simply don't see a need for high-speed access when all they are interested in is checking e-mail. Perhaps now that need is about to appear: Warner Brothers recently announced it's going to be putting first-run movies on CinemaNow for download. Do you think movies will push customers onto the broadband bandwagon?"

A number of respondents suggested that this is just the kind of value added service ISPs need:

[PK enthused] "Gaming is only one of many possible killer apps: there's much more to come!"

[EA agreed] "ISPs need to understand what broadband is all about: providing value-added services, not selling access."

Others discussed the viability of this method of delivery for movies:

[WW warned] "I don't think this will be much of an incentive. The downloaded movies are only available on a pay-per-view basis. It's still cheaper and faster to rent the movie from the corner video store. I think it's great that they're exploring new methods of delivery, but I don't see this particular offering having much impact on people's desire for broadband."

[JG added] "Bigger explosions do not make a great transition to the smaller screen. Unless viewers have room-sized TVs, first run in the home is not a big deal. People would rather go out. I could be mistaken, but I don't really see this technology really grabbing hold for another 20 years or so—if then."

[JN countered] "For blockbusters, most people would rather take a trip to the theatre. But if you knew you could get a first run movie for five dollars online while it's still in the theatres, and download it to your PC with DVD quality (as with CinemaNow), I think you would. Heck, many do that already—just not legally."

Others contended that Warner Brothers' announcement is an important first step for online entertainment:

[BH pointed out] "Putting first run movies on the Internet is a big step for Warner Brothers, and may be the forerunner of a more attractive offering."

[RY added] "Last fall, I heard the president of Blockbuster speak at a DSL conference: they are also planning on distributing movies over the Internet. It's just a matter of time. They need to work out some of the chinks, but it is coming. Another prototype I've seen had a video server at the local ISP level. Movies were downloaded via satellite or via the Internet, whichever was the most efficient at the time, and stored for later retrieval. Most popular movies were to be stored somewhat permanently on the server. Others could be downloaded within a short time, perhaps five or ten minutes before streaming would begin. And it's all done with digital quality. The key is, both services need a broadband connection to work."

[JN agreed] "Let's face it: entertainment is the killer app that broadband so desperately needs. First-run movies are only the first step. Expect more multiplayer online games like EverQuest and Star Wars Galaxies, as well as mainstream music. Network television companies will begin broadcasting their television programming over the Internet, either on demand or live streaming. And sports organizations like the MLB and NFL will begin broadcasting out-of-market games over the Internet. We're only seeing the beginnings of the entertainment industry embracing broadband. Once they do, watch out."

—End