That's very likely. Armstrong needed to strong arm Case. There was a way to effectively do that but it's moot now. If AOL pursues the non-strategy you have suggested and that's what they have intimated, they're headed for disappearance. The world will leave them behind. They know that, but you're right, they're making a strategic error by sitting on their laurels. Eventually the run on the intermediate, DSL, market will play itself out. If they've bivouacked there, it's bye-bye time. That's the sense you get from the AOL thread.
Let's be clear on content. Content doesn't even start until you have a 3 mbps feed. 1.5 barely makes it. We are talking radio vs television, silents vs talkies; AOL can't exist by selling nostalgia at 33.6 or even 250. At 250 the Net is like using the yellow pages. It works but it's a bother. At 56 looking up the tv guide puts you to sleep. We can't begin a discussion about content with at least T-1. That's threshold and that's all.
Holding up the implementation of cable does AOL little good because the intermediate market doesn't have the added value yield that Armstrong is willing to pay so much to have. It is T's concept to remake themselves as a supplier of added value communications and downsize the low profit telephony business which is actually only an incidental adjunct like tv's closed captioning. AOL can't build a high yield model on Net ads, not at intermediate speeds. Ads must be full motion video, not the "Eat at Joe's" applets we are treated to daily. The ad aspect of the Net is way ahead of itself in big profit expectations, but it will be the realization of a small trickle of profit that comes down from them which will hasten the fall of 33.6 and anyone camped on that technology. Currently, no one believes that because they are hoodwinked into eyeball fetching. In any event AOL must seek to ride the cable and the cable has to be there to ride. If they think they have such a competitive content, then they had better make all effort to get it into the hands of their subscribers, and that means helping to get the cable net built. |
