Entertainment: The Broadband Killer App

America Needs Broadband in the Home

Broadband in the American home represents an advance in technology that is sorely needed to keep pace with the technological advances across the developed world, and to help to bring the status and images of the developing world to everyone’s living room and desktop, absent the filters of the mainstream media – or anyone else.

It is time to ensure America’s technological prowess and our continued advancement in the standard of living Americans enjoy – the highest in the world. Given the power of images to shape our ideas and policies, broadband will help open the eyes of many to the status of others in less-developed locales. Once eyes are opened and communication channels established, economic growth will accelerate in developing countries, advancing the standard of living for all, likely at an ever- increasing rate.

But first, America needs a broadband-capable infrastructure to the home.

Building the Infrastructure

Putting broadband into the American home requires a significant investment in communications infrastructure. Having already been an advanced economy with advanced communications when the communications and Internet revolutions began, we had a copper-based wiring infrastructure already in place. Replacing these local copper connections is required to provide entertainment-quality broadband to the home (fiber or wireless.)1 Our long-haul communications already were on microwave or fiber, both broadband technologies.

Given our size, diversity and economic model (a government inclined to simply let market forces rule), a killer app2 must be identified that will cause people to invest their own money into these broadband implementations, free providers from some levels of regulation and/or taxes, or cause the local communications infrastructure providers, be they cable, telco3 or satellite, to begin replacing the copper wire local loop with fiber.

What is this killer app? Entertainment.

What is Broadband?

Broadband is a way for you to connect to information sources like the web and the Internet. Using a big broadband connection will allow you access to the state-of-the-art entertainment, education and e-medicine — stuff you can’t do over today’s typical dial-up, DSL or cable connections.

Big broadband means instant gratification – getting the information you need, now. When we talk about big broadband, we are referring to a variety of broadband connection characteristics that allow great strides in the types of applications used. These include both fiber and wireless, size of the bandwidth , latency (bottlenecks) as well symmetry (same speed both up and downstream). Most experts agree that we need at least 100 megabits of broadband bandwidth to provide instant gratification for the kind of applications we expect in the next five years.

Americans $upport Entertainment

Entertainment is inarguably of economic primacy to Americans. Americans are more than willing to support advertisers and sports stadiums – where sponsors are providing multimillion dollar salaries to those playing games to entertain us. We are more than willing to lavish $20M salaries on A- list film celebrities for their three months of work making a movie to entertain us. We are more than willing to support multiple magazine publications devoted to celebrities to the tune of over $1B annually. We are willing to make gambling on entertainment, both legal and illegal, a multibillion- dollar business. Contrast this with our unwillingness to pay higher taxes to provide better education for our children (a different discussion.)

Broadband can provide consumers with more entertainment, in a more convenient way. With appropriate business model changes, entertainment is the killer app that will drive broadband forward and increase the standard of living of Americans still further.

Changing the Entertainment Business Model

So – how to approach this app? How to get the content (movies, television, live concerts, sporting events, etc.) available to be delivered into the home? Broadband is the technology, but it is the business model changes that make the implementation of the technology a profitable reality.4

The Current Media Content Business Model

The current model of media content being pursued in America by our studios and content providers is to:

  • create a piece of content with costs ranging from $20M to $200M,
  • distribute it very narrowly to reach all 280M people (think 200 theatres for an independent film to 3,000 theaters for for blockbusters)
  • control its play for a specific period of time,
  • and then slowly broaden the distribution window to pay-per-view, cable, airline, rental and finally DVD sales to consumers,
  • and never to distribute via current distribution technology: the Internet.

From an international standpoint the window model has yet another step. If you can think of buying a book in London, but not being allowed to read it in America, you have an understanding of the international region codes on DVDs limiting the expansion of content viewing across the globe.

While it is truly difficult to understand why consumers are willing to put up with this limitation on their freedom, and why those creating content want to limit the access of those who want to watch it (especially paying access, which more than likely will prove to be a historic anomaly; more on that below) – this indeed is the case.

Add in the current business model of the MPAA5 – sue their best customers, the ones who really really want their product to the point they are willing to break the law to get it – and you have an understanding of the business reality of the industry that happens to be the number one US economic export by dollar volume: filmed entertainment.

Intellectual Property Protection is a Business not a Technology Issue

Protecting intellectual property is a business issue being dealt with as a technology issue, when it
is anything but.

Napster, Kazaa, Grokster and all their brethren exist because consumers want entertainment – and
because the owners of this entertainment don’t want them to have it in any business model other
than the current, decades-old one. It doesn’t matter that file-sharing services are being shut down by
American courts; they are regrowing, Medusa-like, every single day.

So consumers are getting their entertainment content elsewhere at a cost they are willing to pay in
dollars and convenience. And this leads the discussion in a different direction.

For all of Hollywood’s talk of multiculturalism, it is a decidedly Western enterprise. The concept
of intellectual property itself is a Western one; it simply doesn’t exist in the minds or cultures of the
majority of the world’s inhabitants. Why does so much piracy happen in non-Western countries?
Because the idea of intellectual property, and hence of stealing it, is a very Western, and very recent
historical concept. Who is to say it will survive the digital revolution? Who is to say it must?

While it is entertaining to listen to the most voluble of celebrity “multiculturalists” complain
about digital piracy of their IP, it is difficult to take it particularly seriously. It is, after all, a multicultural world, right?

The greatest flowering of art, music, writing, of what is termed “high culture” itself, occurred
without the protection of what has come to be known as “Intellectual Property, ” during the Renaissance, and the flowering of the arts occurred under patrons, not under IP protection.

Who is to say that this will not again occur? Some celebrity? Why will a concert not become the
primary money-making venue for musical artists? Because they won’t be able to command zillion-
dollar deals with music studios that cause those studios to not seek out new talent? Please.

1 One could posit that DSL-type technologies will continue to advance, providing broader-and broader bandwidths to the home on the current wired technology. This incremental approach, however, will squander time and capital for short-term solutions. The long-term solution, and the only one worthy of massive investment, is fiber to the home.
2 A killer application (commonly shortened to killer app) is a computer program that is so useful that people will buy particular computer hardware, a gaming console, and/or an operating system simply to run that program. From http://en.wikipedia.org/wiki/Killer_app.
3 Telco is short for telephone companies.
4 As digital music files are so small that broadband really isn’t required, and as the distribution of these files is a fast-maturing market, where video content (movies, TV shows) means both very large files and a nascent market, this article deals primarily with visual entertainment.
5 MPAA stands for the Motion Picture Association of America which was founded in 1922 as the trade association of the American film industry. Today the association advocates for strong protection of the creative works produced and distributed by the industry, fights copyright theft around the world, and provides leadership in meeting new and emerging industry challenges.