The London Bombings Prove that Delivery of Video Via Broadband Is A Powerful Reason to Visit Internet News Sites

Philip Stone July 13, 2005

CNN.com last month made video available for free on the advertising model, reversing its $4.95 monthly subscription model. Three weeks later it had its first really big international breaking news story -- the London bombings -- and CNN said it served more than 3.8 million videos on the first day.
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And that is just the tip of the revolution affecting the Internet —the rise of video as broadband expands.  Within just the past few days announcements have been made that CBS News is building a 24-hour Internet news network, the BBC says it is going to stream a comedy series starting a week before they have their terrestrial debut, and a $100 million investment is being made by a Google-led consortium to develop broadband delivery over power lines (BPL).

Broadband penetration around the world continues its double digit percentage annual increases, but in terms of broadband subscribers per 100 inhabitants, the US is in only 16th place, according to the International Telecommunications Union (ITU) That in spite of the fact that the FCC says US broadband penetration in 2004 grew by one-third and the number of ADSL lines (as opposed to cable and other delivery vehicles) grew by 45%.  .

South Korea owns the broadband penetration crown with 24.9 subscribers per 100 inhabitants, and the Netherlands is Europe’s leading country with 19.4. The US has only 11.4 subscribers per 100 inhabitants putting it just ahead of France (11.2) and the UK at 10.3.  So, obviously a lot of room to grow, but with penetration already at a level to make video commercially interesting.

The monthly broadband subscription cost is the biggest hindrance to broadband take-up, with research suggesting that when the cost gets down to around $1 a day then the take-up increases significantly.

In the US, that type of commercial divide based on cost  is very evident. Half of all households with incomes of $75,000 or more have broadband at home whereas half of all households of annual incomes of less than $30,000 don’t have any Internet access at all. And while the sociologists and politicians argue over whether society should permit such a social divide, for the advertiser it is a dream audience come true. Those who have broadband tend to use it regularly and have lots of money to spend!

That may be one of the reasons why CBS News is trumpeting its decision to become a multi-platform 24-hour on-demand news network, bypassing cable (why try to compete with CNN, Fox, MSNBC et al) and instead concentrate solely on the Internet as the main delivery vehicle.

For CBS, which still has not recovered from the tarnish of the Dan Rather episode during the US Presidential election, and with its nightly news ratings still secure in last place, there is a real need to try and jump-start its news division again.

According to Andrew Heyward, CBS News President, “We’re adding more people and technology to make sure that CBS News is the immediate first choice of Internet users who are looking for independent, trustworthy news reporting and comment.”  CBS did not say when the site will launch, but when it does the big question will be if it does things really differently to draw viewers away from cnn.com, the current television web leader, that seems to offer already much of what CBS says it will do..

But the CBS announcement is important  because it shows a major US news organization is putting not just its money, but its entire news strategy, on broadband Internet delivery, including heavy emphasis on streaming video. Larry Kramer, president of CBS’ digital media division, makes no secret that this is all part of a “cable bypasss” strategy. He says CBS believes the number of homes in the US connected to broadband by 2010 will exceed the number of homes hooked up to cable.

And CBS will no doubt be paying very close attention to the Google investment with Goldman Sachs in power line broadband delivery. For some 50 years there has been much talk about using power lines for communications and that talk had turned to whether the future of Internet delivery would be just plugging into your nearest electricity socket. Three power companies in the US are already starting small trials

But now with such an investment by the world’s largest capitalized media company and a leading Wall Street institution, ISPs around the world may be wondering if their world could come to an end within a few years.  Even if there is a technical success, however,  it will be marketing that will win or lose the day depending on what services can be bundled and at what price.

Back in Europe, the BBC, already flush with success over 1 million free downloads of nine Beethoven symphonies is now looking to do some video experimentation.

The BBC says it will take a comedy series from its channel 3 and start broadcasting episodes, beginning July 19, on the Internet a week before their terrestrial television release.

The streaming will be available until a week after the series’ terrestrial broadcasts end, but users will not be able to download the episodes.

The importance of all this should not be lost on local media. As it turns to multi-platform delivery, video should become a major part of the local offering. Whether locally produced, or from the public – as we saw in the London bombings – the Internet has become the perfect vehicle for on-demand video news and information, and the public has shown a big interest and demand for such products..

And who better to deliver than the local brand in town!

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Australian Broadcasting Company Fears Broadcasting over Power Lines Could Disturb Normal Broadcast Transmissions - July 16, 2005

In one of the first shots across the bow of those promoting broadcast over power lines (BPL), The Australian Broadcasting Company (ABC) has warned that such transmissions carry all sorts of problems ranging from causing a possible loss of terrestrial transmission in rural areas to possibly disturbing emergency information broadcasts.

It also believes BPL could disrupt Digital Radio Mondiale (DRM) services that are being considered as the solution to delivering digital radio to rural Australia.

And in an even more ominous opinion it says that BPL emissions could propagate via the ionosphere and could therefore interfere with receivers across the world.

No doubt some of the $100 million that Google and its consortium partners are spending will examine exactly such issues to determine if there is any validity or such concerns are just sour grapes over a transmission protocol that would allow a lot more product competition.