Subject: Re: Internet economics From: Richard Layman Date: Mon, 7 Aug 1995 01:25:57 -0700 (PDT)
How the Web Was Won
Subject: Re: Internet economics From: Richard Layman Date: Mon, 7 Aug 1995 01:25:57 -0700 (PDT)

As cool as Yahoo (etc.) is, and being able to jump to sites of interest,
don't forget that during the first run season, about 20 some million
people will watch the highest rated prime time television program each
week.  And remember that network TV doesn't get the ratings that it used
to because of cable, other over-the-air networks (Fox, UPN, WB), video
rental, etc.  We're awhile away from these numbers for the Internet.

I'm not sure that "passive" vs. "active" is a reasonable definition for 
Internet users.  We're all active to some extent in that "we are our own 
programmers."  For example, I have to subscribe to lists like this one, 
and I must make a decision to read or delete or respond to the mail I 
get.  I decide where to go on the Web, etc.  

But we are mostly passive users when we use the Web, public access
catalogs, and other resources primarily created by others.  (WRT 
listservs I consider myself an active user.)

Donovan is right that fundamentally, most of the Web-site "programming"
(like traditional media) is passive.  You choose where to go, but other
than doing searches, content is relatively fixed.  Although there are 
sites, like the interactive U.S. budget site at Berkeley, that aren't. 

As interesting and dystopic as William Gibson's cyberspace vision was 
in Neuromancer, we have to admit that ever since Warner Cable's QUBE 
experiment in the 1970s in Columbus, OH, that people haven't been 
clamoring to be active information-entertainment consumers.

This discussion has been interesting too, when comparing to some of George
Gilder's writings.  Basically, George argues that because the cost of
technology and the tools for creating "programming" are dropping
significantly, making the technology much more widely available -- that
"1,000 flowers will bloom" be it either information or entertainment based
(apologies to Mao).  

I've argued with George and in listservs that despite the cheap
technology, the marketing-distribution challenge is also significant. 
Plus the fact that his vision requires people to be active
learner/creators and most people aren't.  Well I think Donovan White
argues pretty persuasively that non-media connected people won't be
producing a lot of great programming.  But Gilder's writings are
provocative nonetheless. 

Nonetheless, the Internet infrastructure, as it takes over or allows 
competing delivery of say radio (RealAudio, Xing) or video (Xing, others), 
will allow for more programming options.  

For example, the physics of radio waves influences the availability of
radio formats.  In other words, waves can only propagate so far, so
formats within a region tend to be somewhat lowest common denominator and
repetitive, because the station owner wants to maximize station income
given the range of the signal.  Well, Internet-delivered radio is governed
by different rules of physics and can reach the nation (or world), maybe
on a subscription basis, and reach enough people, even with the most
narrow formats, to be profitable or at least supportable on a nonprofit
basis. 

It will still be expensive in time, equipment, and personnel to create 
quality programming that people will watch, listen to, hyperlink to, 
etc.  (Even though the equipment costs are cheaper than before, the 
"amount" and "quality" of the creative talent required to use the new 
equipment and software isn't.) 

When I worked in publishing at a consumer group, it occured to me that we 
produced three kinds of materials, and there were actually four 
categories of importance:

1.  Self-help
2.  Policy/Professional
3.  Teaching
4.  Entertainment

Granted in the first three categories there was overlap.  But the lesson
for me was in a report called "Tainted Booze," which reported on the
existence of a possible carcinogen in alcohol products (beer, wine,
liquor).  I thought the report was interesting because it covered the
problem, how the Canadian government was taking the lead in acting, and
how the U.S. government was willing to accept namby-pamby "voluntary
agreements" with producers.  We sold about 10,000 copies -- because we
also listed the test results for a few hundred products.  People bought
the report because they wanted to be sure that their favorite rum wasn't
"tainted," not because they cared about the policy prescriptions.  What I
thought of as a policy tome, was really "self-help."  (As an advocacy
group it was our job to then twist the sales results and say ....
"thousands of people are so concerned about the U.S.'s failure to act that
they bought our report...)

Well I think there are similar lessons here.  All 260 million U.S. 
residents aren't going to get connected.  But so what, we're not reaching 
all of them now anyway.  

But I use variations of that typology of audiences, or create other ones, 
WRT our own work from both a marketing and an editorial development 
standpoint.  I hope you're doing the same, because there isn't a 
monolithic market here.

Bob Metcalfe, creator of the Ethernet networking system, and now a 
columnist for Infoworld magazine posits "six converging conceptions of 
the Inforamtion Superhighway: video telephone, interactive television, 
corporate networks, bulletin board systems, on-line services, and the 
Internet."  (Infoworld, 7/24/95, p. 59; earlier column on same subject 
3/6/95, p. 51)

Business will drive the information delivery aspects of the Internet. 
(Regular consumers go out of their way to show us that they don't want to
pay for information.)  Consumers will maybe get the video-on-demand and
radio-on-demand from the Internet, and other entertainment programming,
including interactive games.  This will drive consumer interest more than
all the sites on the Web. 

E-mail, chat rooms, Internet Phone will be "killer apps" for some time.  
They are true interactivity.  (To me chat rooms/IRC seem pretty 
aimless.)  Then there are MOOs/MUDs.

WRT "populist" issues, e-mail and connectivity makes a tremendous 
difference from being able to organize world-wide, to the ability to 
bring interest and "light" on issues -- from Beijing to Moscow to the 
south Pacific -- making a little harder for people to be oppressed.

But it could be that e-newsletters (the "'zine" review Factsheet Five 
recently ran a few articles about creating Web and other e-zine 
personally published products), listservs, and Newsgroups will be the 
center of organized personal/political activity.  Although homepages will 
always be good places for interested people to find out about the ACLU or 
other organizations.

Unlike some of the other media (radio, television), I don't think that
increased "corporatizing" of the Internet is going to take e-newsletters,
listservs, and Newsgroups away.  They will co-exist with the slick media. 
And unlike community access cable, it will be easier and cheaper to
produce "content" as well as to distribute it, plus the audience can be
wider and larger. 

But not everyone is going to become an "active, informed, participating 
member of society" just because they have the potential to be connected.  
(...Did you ever see George Lucas' first film, THX-1138?  There are all 
kinds of possible futures 'cause of technology.)

Richard Layman, Mgr., Business Development, and Research Producer
Computer Television Network, 825 6th St. NE, Washington, DC 20002-4325
- ---- 202-544-5722 ---- 202-543-6730 (fax) ---- rllayman@netcom.com
http://www.phoenix.net/~ctn


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