DAVID KIRKPATRICK |
Is Internet Video Ready for Primetime? People talk about the IT industry being mature, but I never heard of a faster-paced mature business. This past week we saw HP combine its PC division with its printer division, Intel reorganize around customer segments rather than technologies, and Apple introduce a stripped-down Macintosh—the Mac mini (as well as other cool innovations). Yahoo, meanwhile, linked up with Verizon on a co-marketing deal. Now it's partnered with the two largest U.S. telcos, since it already had a deal with SBC. One lesson I take from all this gamesmanship and reorganizing is that we are finally entering the age of Internet video. Prompted in part by a column yesterday [requires registration to view] on CBS MarketWatch by the insightful Bambi Francisco, I've been musing about how many other signs are pointing in the same direction. First of all, just look at how our behavior is changing. After the tsunami hit Southeast Asia , as I wrote recently wrote in The Tsunami and the Net, I was more enthralled by video I saw online than on CNN. Speaking of CNN, after Jon Stewart's on-air rant against "Crossfire" last fall, an estimated two million viewers saw that show online—far more than the roughly 200,000 who watched the original broadcast. This is despite the fact that video transmitted over the Net is often viewed in jerky, tiny windows, takes too much time to download, and sometimes doesn't play properly at all. But this is the age of “I want what I want when I want it,” and the Internet is obviously the right carriage mechanism for video. It's just a matter of getting the parts all working together. And we're seeing real progress. Software like BitTorrent makes distributing video increasingly easier. BitTorrent is a clever peer-to-peer application that enables users to send lengthy videos around the Internet without overtaxing the originating server. And the nation's biggest broadband ISPs are broadening the pipe further. For its highest-paying customers Comcast Tuesday announced it now will offer six megabits per second, up from a previous maximum of four. That's a huge bump up from the two megabits per second or so, at the most, that I've been getting on Time Warner's Roadrunner. And Verizon is advertising that it has doubled the speed of its DSL. These changes are important for all kinds of reasons. Not only does more bandwidth make it easier to watch video online, it helps keep the U.S. economy competitive with many other nations where faster Internet speeds are more common. (Given the Internet's wide-ranging impact on almost every industry these days, many economists and businesspeople worry that if other countries are more wired than the U.S. , our ability to innovate will be hampered.) As bandwidth grows, there will be more and more content online from both conventional and unconventional “broadcasters.” So what about all this week's deals and announcements? Well, one reason HP is aligning all its consumer products into one group is to make a more concerted effort to dominate the digital home, particularly the living room. See Chris Shipley's latest DemoLetter f or more on that. Just a week or so earlier, at the Consumer Electronics Show, HP CEO Carly Fiorina announced that this year the company would release a high-definition TV media hub and 17 new TVs and projectors. As all information and entertainment becomes digital, the distinction between “consumer electronics” and “home computing” slowly disappears. That's why one of Intel's five new business groups will be focused exclusively on the home. It will build the guts of the computers that HP and others will sell to deliver, store, and distribute the incipient outpouring of video around the house. As for Apple, it's already selling the Airport Express wireless transmitter, designed to send music from your Mac to your stereo. It certainly won't be long before Jobs & Co. produce a similar device for video. Ideally, it would send Internet video to your TV, and broadcast video from your cable box to your Mac or PC. If the cable companies allow it, that is. The Mac mini could morph into a wicked cable set-top box on steroids. The Apple-related portion of my online video epiphany was also jolted when I recently for the first time watched my 7th-grade daughter instant messaging in video using Apple's iSight camera. And Yahoo could very well end up as the online equivalent of a broadcast TV network. It's set up as a guide, it has a huge user base, and it now has growing partnerships with broadband providers. Because it's such a savvy company run by Terry Semel, a marketing genius and movie veteran, I could easily see it solving the financial equation that gets large quantities of quality video online. It's just a matter of figuring out how to pair advertisers with expensive content. That way Yahoo can pay for the content and make money. We've seen Internet video coming, since the web's inception. Now it's finally starting, however fitfully, to fulfill its promise. This evolution will continue creating all kinds of new opportunities for the “mature” IT industry. |