Uncommon Wisdom

Mar 23 2009   3:41PM GMT

Internet free ride wins “unrealistic” prize

Tom Nolle Tom Nolle Profile: Tom Nolle

The Economist is sounding a warning that we’re resonating with (because we’ve sounded it too). The most recent issue points out that Internet companies and consumers have been vying for the crown of “most unrealistic.” Consumers want free services; Internet companies want a free ride on infrastructure, and nobody wants to acknowledge that advertising budgets worldwide for all ad forms wouldn’t pay the capex bill of network operators.

The tragedy of the current situation is multi-faceted. Silicon Valley is threatened with an unnecessary recession because it wants to pursue vacuous flips instead of more useful and thus eventually more sustainable models. The Internet companies are likely doomed to 50% or more attrition. The telcos are increasingly likely to throw in the towel on monetization and hunker down with bandwidth caps and tiered pricing that will stifle new applications and also stifle investment in equipment.

There is still time (through the end of this year, says our model) for radical action to save the industry from a drudge future. Media outlets are predicting a subscription model for content, and if over-the-top (OTT) players finally realize someone has to pay for stuff, the future for all will be rosier. But with all of this, there’s still a new study that says cloud computing needs open non-discriminatory access to universal communications. Sure, and we all need to win the lottery.

 Comment on this Post

There was an error processing your information. Please try again later.
Thanks. We'll let you know when a new response is added.
Send me notifications when other members comment.

Forgot Password

No problem! Submit your e-mail address below. We'll send you an e-mail containing your password.

Your password has been sent to:

Share this item with your network: