Gilder has long been a vocal advocate of the Korean model of 75% broadband Internet penetration.
“I live in rural Massachusetts. The only broadband available is between my hard drive in my computer and my Samsung screen,” he quipped, adding that the United States is far behind at just 18%.
“Koreans will kill TV!” he said, pointing to the “massive dinosaurs” of influential American TV networks proactively stifling U.S. broadband to levels that cannot support full motion video in order to hold their market share.
I am not sure if I can believe anyone’s numbers any more. Mr. Gilder clams the US has an 18% broadband penetration rate while the FCC claims a significantly higher rate – even though the FCC’s claims have been pretty thoroughly debunked by Alex Goldman in this article.
The underlying fact that seems to be getting ignored is that broadband will change the way many things get done in this country and more importantly these changes will happen relatively quickly. Think, for a moment, about the effect that advertising has on our economy. Radio, television, newsprint and magazines all depend on the advertising dollar to stay alive. After the dot com bust there was a significant drop in the gross amount of money spent on Internet advertising. However, this is now starting to swing back the other way with sites like this one starting to see a surge in advertising revenue. Advertisers are now finding they can target exactly the audience they want by honing in on web sites that cater specifically to the interests of their subscribers.
If the trends we are seeing here (and as also mentioned in the article with Korea’s broadband vs, television time) continue we will see more and more people spending more time on the net and less in front of the TV set. I have noticed this in our household as many of you have. So, what happens to the business model Television thrives on if the viewing audience drops in large numbers favoring spending their time on the net instead? I’m guessing the advertising revenue will follow their audience. What does this mean to television as we know it? I hope it means they will start providing more interesting programming to increase viewer interest but I’m afraid this won’t be the case.
What does this mean for the net? More money and a need for more bandwidth as the advertisers will be willing to pay more for more effective advertising. This will mean more bandwidth will be needed for the average viewer to view this animated or full-motion content. But if we as a nation only have 18% of our entire population capable of accessing this technology we will not see this shift happen as quickly as countries that do have the infrastructure in place.
This is the crux of what I am trying to say here. It’s not just about broadband, it’s about the complete shift we will see as a society when we have this infrastructure in place.
Change is coming – we will either adapt or be replaced. This timeless wisdom is just as true now as when Charles Darwin phrased the concept over a century ago.