The Content Revolution

Why do we need broadband? Isn’t the Internet made merely of two dimensional websites with basic communication services (e-mail etc.)? That was the old view, but today things are very different. True, there was a time when applications and games were small and could fit on a single floppy disk (FD), but no longer.

The ever increasing horsepower of personal computing has allowed software and content to become increasingly complex, thus taking up more space. Gone are the days of small fuzzy quality movie trailers and games of no more than a few megabytes (MB) in size. Now everything is bigger, MUCH BIGGER!

The impact has been far from linear too, with all manor of new services popping up (file sharing, social sites etc.) to fill the gaps in a once monotone Internet experience. Through this the online word has managed to become socially acceptable, no longer the sole residence of boffins and network specialists.

Going forward this trend is set to continue, with ever more detailed and rich entertainment services coming online. Most major operators, especially broadcasters, already have plans for Internet TV services. Some, such as Apple, have also launched online video services that allow for the commercial downloading of the latest TV shows.

Perhaps one negative aspect of this has been price and the inability of some operators to make it fair. Two examples are AOL UK’s online Film service and Valve’s Steam (downloadable game distribution) platform. At its launch in February’06, AOL offered customers the ability to download movies (old and semi-recent titles) from £2.99 upwards, which could then only be watched for a week (news). By contrast some of the titles could still be purchased on DVD for £1 extra (shop dependant) and viewed for years to come, not to mention the extras and higher quality.

Similarly Valve has used its ‘Steam’ platform to deliver new and old PC games to consumers, yet far from making things cheaper, it’s actually become more expensive, not to mention the conflict with ISP’s and bandwidth limits. For example, you can buy Half-Life2 in some shops for roughly £14.99 (we've seen it for £9.99 in sales), yet via Stream it’s still several pounds more (after tax).

Future content clearly has many hurdles to overcome, both in terms of quality, cost and the implication for customers plus their ISP’s ability to cope. Closing the competitive gap between physical and virtual media will not be easy.

Consumption (Data Usage)

We’d like to say that broadband has been keeping pace with evolving online content, yet most of the markets price and speed improvements are born more out of direct competition than anything else. Regardless that hasn’t stopped the growth in higher quality online videos, music, games, applications and websites. In tune with this has been the ever increasing rate of downloads, putting pressure on ISP’s as their networks strain through activity. Unfortunately this has caused providers to react with increasingly restrictive data usage policies and caps.

[Next Page (4)]>>