Internet Video: Idea Whose Time Will Come . . . Slowly
As befits any entrepreneur, Asaf Mohr is an optimist. The youthful Israeli’s company, VDOnet, has developed software for broadcasting video over the Internet, and Mohr is convinced that big things are just around the corner.
Never mind that the VDO system hardly works at all over regular dial-up Internet connections. Pretty soon, Mohr avers, a lot of people will have high-speed connections, and by 1998 or ‘99, “video will be the most important application on the Internet.”
Sorry, Asaf, but that prediction is almost certainly wrong. And understanding why it’s wrong will help to clarify a lot of things about business on the Internet.
The fundamental problem is easy enough to grasp: Sending video over communications lines requires a lot of transmission capacity, far more than is required for words or numbers or even sounds. And sending “live” video, as opposed to video files that must first be transferred to a computer’s memory before they can be viewed, is especially difficult because of the way the Internet handles information.
For something like the VDO system to work effectively, then, two things have to happen. First, the slowest link in the Internet chain--normally the telephone line that connects a home or office to the Internet via modem at a speed of, say, 28.8 kilobits per second--has to be speeded up dramatically. Second, the whole complicated set of computers and communications links that make up the global Internet itself needs to be able to handle a big influx of capacity-hogging video.
And these are exactly the kinds of things that don’t happen fast.
Mohr and other optimists point to cable modems, which promise to provide high-speed access to the Internet by using big, fat cable television wires rather than skinny little telephone wires. Cable companies and their equipment suppliers just last week made a flurry of announcements indicating they’ll be rolling out cable modems by the millions beginning later this year.
Unfortunately, those announcements sounded awfully familiar. In fact, they were almost identical to the proclamations cable companies made in 1992 about how 500-channel interactive television systems were just around the corner.
The simple reality is that cable companies will have to spend several hundred dollars per subscriber to upgrade their networks for Internet access, and there are myriad unsolved technical problems. It will be closer to 10 years--not two years--before cable modems are widespread.
Meanwhile, the Internet--and especially the World Wide Web--is groaning under the weight of the relentless increases in traffic. More and more Net surfers find themselves waiting interminably for connections to be established, or discovering that for indiscernible reasons certain connections cannot be made at all.
The most apocalyptic observers, such as Robert Metcalf, the inventor of Ethernet and a columnist at Infoworld magazine, say these problems portend nothing less than the death of the Internet. The strange way the network is paid for means that no one has sufficient economic incentive to solve them. I think they’ll be solved--but s-l-o-w-l-y.
A fascinating set of comparisons put together by Richard Shaffer, head of New York-based Technologic Partners, helps illustrate what’s going on. Shaffer examined the pace at which major new consumer technologies were adopted by looking at how long it took them to reach 50% penetration.
It turns out that technologies that required a lot of infrastructure to be built were the ones that developed slowly. Telephones, for example, took 70 years to reach 50% penetration, electric lights took 44 years, and cable TV took 39 years. Radio, by contrast, which required relatively modest investments in broadcast facilities, took just 11 years, and the VCR only eight.
Even allowing for the faster pace of technological adoption in the digital age, the lesson seems clear. As Shaffer says, “Moore’s law [which holds that computer chip capacity doubles every 18 months] doesn’t apply to the laying of cable.”
So here’s a rule of thumb: Any great new Internet thing that requires big infrastructure improvements is likely to happen later rather than sooner.
And here’s an important corollary: For many purposes, how fast something happens is just as important as whether or not it happens. The Channel Tunnel between England and France, to use another infrastructure example, is up and running, but construction delays were so damaging to the giant project’s financial model that investors have been all but wiped out.
None of this necessarily means that Asaf Mohr’s VDO, or any other particular company, will fail. There’s a lot of money to be made in building infrastructure, for one thing. And a lot of Internet technologies have important and lucrative applications in the corporate computing arena, as companies build internal networks known as Intranets.
Just beware of any strategy that assumes great masses of individuals and businesses will quickly gain access to new technical capabilities they don’t already have. Video on the Internet, I’m sure, will eventually be very important. But in two or three years? Get real.
Cutting Edge editor Jonathan Weber can be reached via electronic mail at Jonathan.Weber@latimes.com.
