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The Network Observer -
Making Content Pay

David Doering

June 2001 | Digital content today is typically produced with one of two purposes in mind: to generate a profit or to justify a department's media budget. Either way, content must pay. The debacle of the dot coms and the nagging Napster controversy demonstrate the difficulty of achieving this goal. The Internet world devours content ravenously–the more multimedia, the better. But it never wants to pay.

Now, I truly believe that there are many users who would be glad to pay for content. Consider just one group: the embedded systems developers. One of their own pleaded for this recently, calling for more "interactive Webcasts" and "interactive online training" as essential for his profession to deliver. This latter I thought interesting, since traditional stand-up training seems alive and well. But it is the very latency of that type of training–scheduling time, travel time, and instructional time–that predicates its downfall in many markets. Development times can seldom be extended to include two or more months in preparation before training; an on-demand, customized approach is essential.

With the ordered desisting of Napster and the closing of various free content sites (for example, winmag.com), traditional content distribution methods seem to have won the first round. Books, magazines, CDs, video tapes, and DVDs all continue to do well. Live commercial or pay-per-view broadcasts also have a deep market. All of these have had online counterparts, but few have been successes.

Don't make the mistake of thinking that the problem is the Internet medium; it is not. We've already overcome poor-quality audio content with MP3 and poor video quality with Real's and Microsoft's latest codecs. The real problem is in the infrastructure currently in place. There are two key ingredients still missing from the Internet that would make selling digital content worthwhile: the first is always-on access; the second, carrier-class content management tools.

It is sometimes difficult to remember that for the vast majority of Internet users–80% or more–the experience is an intermittent one. Dialup, log on, log off, hang up. This is because the last mile/first mile (depending on how you want to look at your connection to your ISP) is over a telephone line. This causes users to see the Internet as an extra-effort event, not as an integrated part of their lives.

For anyone with DSL, cable modem, or broadband wireless access, the story differs considerably. Looking for and leveraging digital content is a near-continuous experience. As a DSL user, I often find myself looking up phone numbers online, rather than walking a few feet to get a directory. This attitude change makes me frustrated when I cannot obtain the content that I want and need without first using my credit card to pay a $1 or $2 fee, or worse, a large subscription price.

Which brings us to point number two–the lack of carrier-class distribution tools. Despite a rather obvious need, content distribution over the Web has, to date, been primarily passive. If the user asks for it, the site will send it. But this is more like selling your digital content via catalog mail order. Yes, there are users who will do that, but most don't.

A major reason why traditional content distribution methods work, and online methods have thus far largely failed, is that the infrastructure to sell books, tapes, and CDs, is well understood–including the pricing model. Traditional methods of shipping, handling, displays, point-of-sale, and all the rest of retail have been honed and refined over hundreds of years, resulting in the most efficient, cost-effective process.

With online distribution, we've hardly even seen billing done correctly. It is quite surprising to me that, up till now, there has been no cost-effective way to micro-bill for content–à la long distance service. I'd much rather pay my usage bill for content at the end of the month, rather than have to cough up my credit card for every fifty-cent transaction. Online training makes us jump the same hurdle. Why can't we charge for only the content we use?

Television broadcasters understand their audiences and how their stations reach those audiences. Yet online services have little, if any, information about viewership and how their content is used. This is sad, since, of all the traditional forms of media–print, TV, radio–only the Internet could do real-time monitoring of activity.

Carrier-class service implies a 99.999% uptime with low- or no-latency for accessing the service. Today's systems too often provide 99.9% uptime, which means almost nine hours of unexpected downtime in a year. Customers expect more. Think dial tone. I can't even remember the last time I didn't get a dial tone on my phone.

Carrier-class implies scalability. Could we find a package that would go beyond the Victoria's Secret disaster and, not just handle, but, anticipate the increasing demand?

Finally, carrier-class implies complete control of content, from source to user. The content developer needs to know that security of content is maintained end-to-end; that the content is staged correctly at caching points out at the edge of the Net, as close to the last mile as possible.

The Internet can provide a solid revenue stream to digital content developers. It just needs two more pieces. Beyond that hurdle, content can–and will–pay.

THE NETWORK OBSERVER columnist David Doering (dave@techvoice.com), an EMedia Magazine contributing editor, is also senior analyst with TechVoice Inc., an Orem, Utah-based consultancy.

Comments? Email us at letters@onlineinc.com.

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