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SkyBOX: The Hidden Hippopotamus
by Evie Haskell
Here are three items from Friday's Wall Street Journal, all pointing to the same hippo in hiding:
*After three years of restructuring, Sony Corp. unveiled a "new growth strategy centered on video downloading and electronic products that can be connected to each other and to the internet."
*The ICANN (Internet Corporation for Assigned Names and Numbers) approved a "proposal to created an unlimited number of so-called top level domains" meaning that designations such as .sports. .games or, say, .directv might become available.
*Chrysler announced that it will launch a wireless internet system specifically for Chrysler vehicles in the U.S.
Where's the hippo here? You've probably already guessed it: Demands on high-speed bandwidth ... whether via cable, fiber, wireless, satellite or angels dancing on the head of a pin ... are growing exponentially. Indeed, the Yankee Group notes that its research has recorded annual data growth volume in the range of 80 percent to 100 percent globally. In many ways this is excellent news for multiplatform businesses. Companies such as Hughes, WildBlue, Comcast, AT&T etc. can all benefit enormously from the explosion in bandwidth demand.
But can they keep up with it? Can they create business models to sustain it?
Maybe ... but then again, maybe not. Already some internet cognoscenti are muttering that demand may well outpace supply. And, on a global level, IT executives are warning that current business models, AKA the flat-rate monthly fee, cannot provide sufficient revenue to fuel the growth. Indeed, a recent Yankee Group study querying 150 global service providers found that 57 percent of all respondents "agreed that the flat-rate month fee approach is not a sustainable business model for broadband-based businesses." That view was especially prevalent in high-speed heavy Asian-Pacific nations where 70 percent of respondents agreed with the statement.
What does that tell us? Partly, that drawbacks can also become strengths as satellite internet providers already offer tiered services, thanks largely to the bandwidth constraints of their technology. But it also tells us that today's telco, cable and wireless players may eventually HAVE to move to tiered services, or else fall behind the demand curve. And when that hippo comes out of hiding, the screams from consumers, Congress and maybe even the Civil Liberties Union will be terrible to behold.
by Evie Haskell
Here are three items from Friday's Wall Street Journal, all pointing to the same hippo in hiding:
*After three years of restructuring, Sony Corp. unveiled a "new growth strategy centered on video downloading and electronic products that can be connected to each other and to the internet."
*The ICANN (Internet Corporation for Assigned Names and Numbers) approved a "proposal to created an unlimited number of so-called top level domains" meaning that designations such as .sports. .games or, say, .directv might become available.
*Chrysler announced that it will launch a wireless internet system specifically for Chrysler vehicles in the U.S.
Where's the hippo here? You've probably already guessed it: Demands on high-speed bandwidth ... whether via cable, fiber, wireless, satellite or angels dancing on the head of a pin ... are growing exponentially. Indeed, the Yankee Group notes that its research has recorded annual data growth volume in the range of 80 percent to 100 percent globally. In many ways this is excellent news for multiplatform businesses. Companies such as Hughes, WildBlue, Comcast, AT&T etc. can all benefit enormously from the explosion in bandwidth demand.
But can they keep up with it? Can they create business models to sustain it?
Maybe ... but then again, maybe not. Already some internet cognoscenti are muttering that demand may well outpace supply. And, on a global level, IT executives are warning that current business models, AKA the flat-rate monthly fee, cannot provide sufficient revenue to fuel the growth. Indeed, a recent Yankee Group study querying 150 global service providers found that 57 percent of all respondents "agreed that the flat-rate month fee approach is not a sustainable business model for broadband-based businesses." That view was especially prevalent in high-speed heavy Asian-Pacific nations where 70 percent of respondents agreed with the statement.
What does that tell us? Partly, that drawbacks can also become strengths as satellite internet providers already offer tiered services, thanks largely to the bandwidth constraints of their technology. But it also tells us that today's telco, cable and wireless players may eventually HAVE to move to tiered services, or else fall behind the demand curve. And when that hippo comes out of hiding, the screams from consumers, Congress and maybe even the Civil Liberties Union will be terrible to behold.