Be on the wave or under it
The News – 07/16/02
Content is Not King
Professor Andrew Odlyzko, director of the
Digital Technology Center at the University of Minnesota, is not
a fan of all the hype about content on the Internet or on any
other network. In a reply to Nick Stanley’s guest column last
SNS, Prof. Odlyzko refers to his keynote talk the 11th IST Mobile
& Wireless Telecommunications Summit 2002 in Thessaloniki,
Greece, which is available online.
(I’ve quoted Prof. Odlyzko before
in SNS.) He argues that connectivity is way more important than
content, and points to examples such as the success of Short Messaging
Service (SMS) and the failure of Wireless Application Protocol
(WAP) services in Europe. In his presentation, Prof. Odlyzko quotes
from Janet Abbate’s book, Inventing
of email was not foreseen by the ARPANET's planners. [ARPANET
designer Larry] Roberts had not included electronic mail in the
original blueprint for the network. In fact, in 1967 he had called
the ability to send messages between users “not an important motivation
for a network of scientific computers” . . . Why then was the
popularity of email such a surprise? One answer is that it represented
a radical shift in the ARPANET's identity and purpose. The rationale
for building the network had focused on providing access to computers
rather than to people.
Prof. Odlyzko thinks that many telecom analysts
who focus on content services as the saviors or the killer apps
are forgetting something: Voice is the killer app of telephone
networks. Getting more revenue from voice will be much simpler
to do for telephone operators than creating new information services.
Here are Prof. Odlyzko’s recommendations for growing telecom revenues:
I think we need to untangle some semantics,
though, regarding the claim of kingship for content. If by content
you mean things like music, video, news, and entertainment, it’s
obvious that no one has yet built a viable content business model
on the Internet or on wireless networks. Yet, equally obviously,
people do pay for this type of content in other media, both directly
(cable/satellite subscriptions) and indirectly (advertising).
This type of content is desirable, and has
value. The reluctance of people who think nothing of subscribing
to the Wall Street Journal or the local paper to pay for content
online has more to do with the competition of free content and
user expectations than it does with the desirability of online
content. Similarly, the lack of interest of wireless users in
this type of content on their cell phones has more to do with
the awkward form factor and user interface than with the value
of the content itself.
If, however, by content you mean person-to-person
digital communications, it’s obvious that content is king. Email
was a great driver of Internet growth in the past, as Instant
Messaging and Voice over IP (VoIP) are today. That voice has been
the great driver of cell networks up to now is obvious. That voice
will remain the primary driver of wireless network usage for the
foreseeable future is less certain. However, person-to-person
connectivity will be a major factor. One of Professor Odlyzko’s
tables demonstrates this point eloquently:
SMS (Short Messaging Service), which is
all the rage in Europe, costs an astonishing $3,000 a megabyte!
Imagine if it were sold that way, instead of by charging 10 cents
a message. This table demonstrates the value we put on various
types of communications. Yet there’s an important communications
type missing: email.
How much do you pay for email? Unless you’re
on AOL or a similar email metering system, your email usage is
too cheap to meter. Does this mean you don’t value email? On the
contrary, email may be the last digital communications service
you would give up. So the calculation of price per megabyte may
be somewhat misleading.
As I’ve previously argued, what
really counts is yacking. People love to yack, on the phone, on
the cell, or using their fingers on SMS, Instant Messaging, and
email. They love to tell each other stories. The true winners
will be those businesses that figure out new ways to facilitate,
and charge for, person-to-person communications. My money’s on
Also, check out the article I wrote for the
Taylor Harkins newsletter entitled, Do you hate your customers?
It continues the theme from my earlier article, analyzing
the media industry’s response to file sharing.
Steganography doesn’t have anything to do with dinosaurs.
Rather it’s the science of concealing messages in outwardly
normal pictures or messages. Some overly paranoid government
agencies have speculated that terrorists used steganography
to conceal messages planning the September 11th
attacks. Frankly I don’t think they needed to go quite to
that extreme, since coded or encrypted emails would suffice.
Now there’s a new steganographic technique that avoids the
suspicion that might accompany the sending or receipt of an
encrypted file: Disguise the message as spam. The Spam Mimic
Web site lets you sample the technique. First, go to this
page, which contains a spam message I’ve encoded with a secret
phrase. Then decode it
at Spam Mimic. The
technique makes use of the usually horrible spelling, grammar,
and punctuation often found in spam emails.
- Pretty Good Text to Speech: Most text
to speech converters sound robotic and idiotic, often trying
to pronounce things that should be spelled out, and vice versa.
Loquendo, on the other hand, sounds pretty doggone good. Check out the
way their system speaks the paragraph you’re now reading. Not
- Ends Justifying Means: At least three
major record labels are spoofing popular music file sharing
services like Morpheus, Kazaa and Grokster with thousands of
decoy music files. The files look identical to a particular
song, but are filled with minutes of silence or 30-second loops
of a song's chorus. The labels are hoping that file sharing
users will get so frustrated they’ll stop stealing the music
and purchase the CDs instead. Good luck with all of that! One
anonymous executive said, “We're not using any of this with
any kind of promotion or marketing in mind. We're doing this
simply because we believe people are stealing our stuff and
we want to stymie the stealing.”
According to one statistic, more than 18.7 million users downloaded
illegal music in May. Spoofing won’t be the only tactic used
to stop piracy. Labels are apparently looking at ways to scramble
search queries or add file attachments to slow the download
of a compressed music file that would typically download quickly.
Particularly troublesome is a bill being prepared by Beverly Hills
democratic Congressman Howard Berman that would legalize high-tech
attacks against file swapping networks. One hopes that this
legislation won’t enable the kind of attack envisioned by one
record exec, who summarized the mindset of some of his peers
as, “Hey, if you don't mind stealing my career and livelihood,
I'm sure you don't mind if I destroy your hard drive.” Even
Week is concerned.
- Net Traffic Exceeds Voice Traffic: In
the US, Internet traffic has reached 100 petabytes per month,
which is apparently double the volume of the nation’s long distance
voice traffic. But the pace of growth in data is slackening,
to a poky 100 percent per year, down from 130 percent in 2000
and 160 percent in 1999. Meanwhile, telecom revenues fell 17
percent and revenues-per-bit fell 45 percent in 2001.
The European branch of MIT Media Lab has designed a tooth implant
that can silently transmit sound through the jaw and to your
ears. The implant is designed to work with an external device
such as a mobile telephone, which would transmit a local signal
to the tooth receiver. Reception can be switched on and off
at will with the aid of the external device. Multiple molars
can be implanted for – wait for it – surround sound. Others
have restrained themselves from offering this pun, but I’ve
no shame: Is this the ultimate Bluetooth device?
- Failed BizPlan Archive:
Alert SNS Reader Roger Hamm sends along a link to a research
project that seeks to archive for posterity the business plans
of failed dotcoms. The project is a joint effort between WebMergers,
which tracked the dotcom revolution, and the Robert H. Smith
School of Business at the University of Maryland. “If we do
not act now to document the dot-com happenings of the past several
years, many of the events and firms that helped define the period
will be forgotten,” said David Kirsch, assistant professor of
entrepreneurship and head of the research project. “We must
create a meaningful digital archive of this historic era of
entrepreneurship. The business plans of the 1990s are important
cultural products that represent the creative efforts of our
age.” Hmmmm. I’ve got a very creative business plan from a former
employer that might be interesting . . .
Wayback Machine – A Year Ago in SNS
lead article in the July 16, 2001 edition
of SNS was How Not to Be an Online Grocer, a consideration
of the fate of online grocers following the collapse of
WebVan. Today, even cautious and deliberate Simon
Delivers is having rough times.
in that edition was Wireless Stumble, about the demise
of Metrocom’s Ricochet 128Kb wireless service. Today, Aerie
Networks, a broadband services company based in Denver,
Colorado that bought Ricochet’s network, is still readying
it for rollout. Chances are good that Wi-Fi makes Ricochet
article, More Disposable Tech, was about a trend
toward disposable cell phones. We’re still waiting.
Thumb Envy, concerned Seiko’s new thumb keyboard
for the Palm V. Today, doctors are treating patients suffering
from Blackberry Thumb.
Just the Right Stuff™
If you subscribed to CTOMentor’s Just the Right Stuff™
newsletter, over the past few months, you’d have received
news nuggets like the following, along with expanded analysis.
Your personalized Information Needs Profile would determine
which of these items you’d receive. For more information,
check out CTOMentor.
- Military Scours Windows
for Back Doors: The US Army and Navy are inspecting Microsoft’s Windows
operating systems looking for unauthorized remote-control
program. An undisclosed number of copies of the program,
RemotelyAnywhere, were discovered on Department of Defense
computer systems in March.
- Movie Pirates Despoil
Precious Assets: Surveys say 350,000 films are being downloaded illegally every day,
many of them while still playing in theaters. The Motion
Picture Association of America filed suit March 5 against
file-sharing services, including Morpheus, Grokster and
Kazaa. An overwrought MPAA chief Jack Valenti said file-sharing
“is file-stealing--it's an outrageous despoilment of precious
assets.” Settle down. It’s only the end of the world as
you know it.
- Palm Drives Bluetooth:
Palm's drive to make Bluetooth wireless technology ubiquitous
shifted into high gear in March with the announcement of
a marketing partnership with Sony Ericsson and the release
of a Bluetooth add-on card for users of its handheld devices.
- Faster, Better, Cheaper
Wireless LANs: Actiontec brings the price of high-speed wireless networking down to
earth with its affordable ($149) 54Mbps wireless PC Card.
Unfortunately, Actiontec skimps on security features, and
its utility software offers only minimal network statistics.
- Gartner Predicts Wireless
and Mobile in 2002: Business planners have to accept that more than half
of all the mobile applications deployed at the start of
2002 will be obsolete by the end of the year, and they have
to put up with the lack of sufficiently useful and usable
- Wireless Gaming Market
to Grow to $2.8 Billion Worldwide by 2006: In-Stat/MDR believes wireless gaming offers an excellent
opportunity for network providers to create additional revenue
through increasing subscribers’ usage levels, reducing churn,
and enhancing the overall user experience for their extremely
fickle subscriber base. Cahners
Get this Stuff as it happens, not months later. Subscribe
to CTOMentor today. Charter subscription discounts
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Jane C. Ellsworth
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