New York -- Surging momentum behind digital subscriber line
and continued growth in the cable-modem base has pushed preparations for broadband to a
new level of intensity across the content, electronic-commerce and advertising sectors.
A glimpse of what's in store could be seen at a
conference here last week, making it clear that by the start of next year,
high-speed-access-line users will be exposed to a class of service altogether different
from what they've experienced before.
Repeatedly, speakers at an event produced by the ZD Studios
unit of Ziff-Davis Inc. stressed their belief that broadband connectivity would soon reach
the threshold that makes it worth their while to move from the long period of
experimentation in advanced applications to commercial rollout.
A big factor is their conviction that DSL technology is set
to take off in the mass market.
"If you look at the variety of content and
applications that will be affected by broadband, it's pretty clear that the producers
get it," said Ronald Whittier, senior vice president and general manager of the
content group at Intel Corp.
"They're looking for an early lead in market
share in their segments, because they know the market base is going to grow fast," he
Whittier noted that the approval of DSL standard
"G.Lite" by the International Telecommunications Union two weeks ago has already
had a profound impact on market expectations about the growth curve in broadband
Forrester Research Inc., for example, just raised its
DSL-line projections to 16 million by the end of 2001, which "is a hell of a lot
nicer number than a few million total broadband households in that time frame,"
"There's going to be a dramatic shift over the
next 12 months," agreed Caroline Beck, chief operating officer at Intertainer Inc., a
supplier of broadband content to the cable and DSL markets. "There's a
groundswell in feeling among providers of broadband content that there's a
competitive environment to work in that we haven't had before."
Intertainer is preparing to roll out services commercially
in about one-dozen DSL markets, Beck noted, even though the company's
video-on-demand, e-commerce, advertising and other applications are designed to work over
1.5-megabit-per-second links -- faster than consumer-level DSL services.
Next year, Intertainer will ride the G.Lite wave, where
rates can vary dynamically from hundreds of kilobits per second to 1.5 mbps, Beck said.
The achievement, through new compression and other
techniques, of a sub-1-mbps "sweet spot" for broadband content that captures
both the DSL and cable markets has been instrumental in driving content and applications
producers to prepare for broadband-service rollouts in the near term.
David Goldberg, CEO of Launch Media Inc., a provider of
CD-ROM music-oriented entertainment that is gearing up for broadband distribution, said,
"We thought we'd have to operate at higher bandwidth to do the things we're
planning, but that's turning out not to be the case."
In a dramatic display of what's in store, Launch has
teamed up with Arepa Inc. to create a 3-D interface environment that allows users to enter
into spaces devoted to a wide range of applications, from games to music videos to
full-length feature films.
Exploiting Arepa's "Brick" file-formatting
technology, the companies will deliver applications to users over pipes operating in the
500-kbps range, Goldberg said.
Arepa, which is now in a trial with Excite@Home that
reaches 5,000 cable-modem customers, plans to move to full commercial rollouts over cable
and DSL networks by year's end, said Vincent Grosso, the one-time AT&T Corp.
interactive-television guru recently hired as CEO at Arepa.
"I don't see any virtue in holding back the
availability of these services to customers today," Grosso added. " It's
very dangerous to do that in a competitive arena where DSL is emerging as a strong
By dividing CD-ROM and other stored media files into
smaller "bite-size" components, or "Bricks," Arepa's
patent-pending technology overcomes the problem of interacting with such files over
sub-1-mbps lines, Grosso said.
Without such file divisions -- done through software
manipulations of CD-ROMs that include "on-the-fly" encryption -- the files would
have to stream at multiples of 1.5 mbps, as they do when they sit on a CD-ROM player at
the PC. This would require significant volumes of caching to the hard drive, he added.
Advertisements are also going broadband. Whittier showed a
multilayered ad developed for Toys "R" Us Inc. that can run as a small,
video-streamed window within the screen space of a broadband-content application.
The viewer can take a virtual trip up and down the aisles
of a toy store, plucking items from the shelves for closer looks. Of course, the shopper
can also click to a commerce page that supports online purchases.
The underlying technology used in developing the Toys
"R" Us ad came from Veon Inc., which developed easy-to-use tools for agencies
The Veon tools also provide a means of setting up
comprehensive tracking of customer-use patterns, giving advertisers direct feedback not
only on the initial click-through, but on specific areas of product interest, noted vice
president of business development Gaurav Suri.
Tests of such advertising are now happening worldwide, said
Mark Thompson, technical director for Ogilvy & Mather's online-advertising group.
"All of the marketing forms from radio, TV, print and
direct mail converge on the Web, and we're trying to develop a baseline of metrics
that will be used to assess the value of the broadband experience to advertisers," he
O&M is working with IBM and Excite@Home in this effort,
with an expectation that the broadband market base in the United States will be at 10
million to 16 million households by 2002, Thompson said.
He made it clear that O&M is approaching broadband in
the context of the explosion in Internet usage generally, so it is currently working to
incrementally enhance advertising capabilities and returns as bandwidth increases, without
waiting for something clearly definable as "broadband."
The alteration of advertising with higher levels of
bandwidth and interactivity represents a shift that requires an altogether new approach to
the business, suggested Brigham Field, creative director for @Home's advertising
"The main thing we've learned is that broadband
gives us the capability to exchange things of real value to consumers, where they give up
money and time in exchange for information, convenience, products and even
entertainment," Field said.