Hi Pat. Here's another very indirect BCST/ASND link for late nite ASNDers
Bandwidth Is the Internet's Albatross Technology: Global network's challenge to television is slowed by its own limited capacity to carry video and audio data
latimes.com
Wednesday, July 22, 1998
By GREG MILLER, Times Staff Writer
The stunning stock market debut of Broadcast.com Inc. last week was
widely attributed to Wall Street's ongoing infatuation with anything
related to the Internet.
After all, Broadcast.com embodies one of the most tantalizing and
tenuous hopes for the Web: that someday it will rival, if not supplant,
television as a conduit of entertainment for the masses.
But if toppling television is the Internet's destiny, it remains a distant one,
analysts and industry executives said, because of technological, financial and
creative hurdles that stand in its way.
"For some time, people have looked at the Net as the next broadcast
paradigm," said Patrick Keane(), an analyst at Jupiter
Communications in New York. "But the Net is just not ready for that yet."
The main constraint is bandwidth, the capacity of the network to carry
data.
Most people are already impatient with how long it takes to download
static pictures and information from the Web. Video and sound strain that
capacity even more.
Which is why "video on the Internet is still like watching Soviet television," said Melinda Moore, vice president of marketing at Intertainment Inc. in Santa Monica.
Intertainment is developing systems for movies on demand and other
video services but is focusing its efforts on traditional cable networks until
bandwidth on the Net improves.
So far, much of Broadcast.com's popularity stems from its audio
offerings. The company, formerly known as AudioNet(), carries
hundreds of radio broadcasts, enabling displaced Baltimore Orioles fans, for
instance, to tune into hometown radio broadcasts of games.
But Broadcast.com's potential lies in its growing video services,
according to analysts. The Dallas-based company serves up everything from
cable news channels to John Wayne movies 24 hours a day to anyone with
a modem and a computer.
Broadcast.com says it is attracting 400,000 users a day, and its Web site
is ranked among the top 20 entertainment sites on the Net, according to
ratings firm Media Metrix.
Still, most people hadn't even heard of Broadcast.com until last week,
when it sold its first shares of stock to the public and shattered Wall Street
records.
The company's stock started out at $18 per share but raced to as high as
$74 per share before closing the day at $62.75 on Nasdaq. No other
company has ever had such an impressive debut.
The amazing run-up gave Broadcast.com a billion-dollar market value,
even though it has never posted a profit. Its founders, Mark Cuban and
Todd Wagner, became instant multimillionaires.
Broadcast.com describes itself as "the leading aggregator and
broadcaster of streaming media programming on the Web."
But it is by no means the only company doing so. Media giants, such as
NBC, are developing services similar to Broadcast.com's. And countless
smaller firms are trying to create their own fledgling online networks.
"We're going to do to cable what cable did to network television, and
what network television did to radio," said Joshua Harris, chief executive of
Pseudo Programs Inc., a New York company that creates original shows
for the Web.
That might sound like hollow hubris. But even cynics agree that the Net's
potential as an entertainment medium is vast.
Still, analysts caution that consumers won't be tossing their TV sets any
time soon because broadcasting video over the Net still faces significant
obstacles.
The bandwidth problem is being attacked from all sides. Software
companies are working on better ways to compress video signals.
Telephone companies are using new technologies that boost the capacity of
copper phone lines. Cable TV has introduced modems and set-top boxes
that can connect to the Net using high-bandwidth coaxial cables already in
place.
But none of these fixes is catching on quickly. Jupiter Communications
estimates that in 2002, 78% of all online households will still be connected to
the Net through plain old phone lines.
There are other problems, including the fact that even though computers
are getting simpler and cheaper, they remain more expensive and
complicated than TVs.
"I don't think the Net is going to be a mass medium the way TV is," said
Gary Arlen, a media analyst at Arlen Communications in Bethesda, Md.
"The reality is that 98% of households have a TV and 40% have a PC
because computers are too difficult and too expensive."
If streaming video technology improves as quickly as online audio
transmissions have during the last few years, analysts say Broadcast.com
could be poised to become an entertainment powerhouse.
But even Broadcast.com is hedging its bets. Aside from serving up video
and audio entertainment on its Web site--and collecting advertising fees--the
company is positioning itself as something of a Webcaster for hire.
Companies that want their shareholder meetings broadcast on the Net,
for instance, can hire Broadcast.com to do the job. If the entertainment side
fails to take off, this service business could become the company's bread
and butter, analysts said.
"I really don't see them as being the Yahoo of entertainment," said Mark
Hardie, an analyst with Forrester Research() in
Cambridge, Mass. "It's a service business."
Copyright 1998 Los Angeles Times. All Rights Reserved |
