Broadband Shift

From WSJ:

Many of the still-standing Web developers are beginning to view broadband as more than hype. Media companies and online services are rolling out a wide range of new music, videos, movies, games and other features suited for high-speed Internet hookups but too cumbersome for most people using slower dial-up connections.

In doing so, they’re setting the stage for what could be a major transformation of the Internet. Much of the new content being developed for broadband users is premised on the unproved assumption that people will be willing to pay for a wide range of entertainment on the Web. If they are, get ready for a two-tiered Internet, with the hottest content sites charging subscription fees. Cable companies, online services and phone companies already are beginning to explore the idea of offering subscriptions to packages of premium content, in the same way cable companies today sell premium channels such as HBO and Showtime.

Cable companies clearly recognize that content is the key to maintaining strong broadband sales. Up to now, millions have been signing up for broadband primarily for its speed and the convenience of a connection that’s always activated without a lengthy dial-up procedure. But for many others, those advantages are not enough to justify the cost. So cable companies are scrambling to figure out ways to use music, videos, graphics and other jazzy broadband content to keep the cash register ringing.

The story talks about the US situation, but what is also happening is that many emerging markets are also going to be getting broadband quite soon. In fact, many countries like India will bypass the narrowband step. Already many cybercafes in India and South Korea have high-speed connections. Providers like Reliance Infocomm are planning Ethernet into homes via fibre in the coming years.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.