Can Music Save Broadband
New research from Ipsos-Insight, the U.S. marketing research division of Ipsos, would indicate that broadband services are relatively price insensitive, painting a worrisome picture for everyone whose fate is tied to a growing base of bandwidth hungry consumers from device manufacturers to online companies.
The stakes for entire industries as well as the overall economy are enormous. Continued demand for faster processors not only drove PC sales, but the entire software industry and devices from printers to scanners, as well as computerizing corporate and middle America. But demand for more speed was not primarily a function of the price of the next generation processor, but rather driven by continued demand for better performing, feature-rich software. Software, whether in gaming, office or multimedia application, was the hook to catch the consumer and justify the PC upgrade. Cheaper & faster processors simply acted as the enabler.
Now it's the turn of broadband to take the relay from the processor, except that consumers can't seem to find the hook. Ipsos-Insight recent survey found that while two-thirds of Americans are connected to the Net, most are still using that trusted old narrowband modem, with a third "not convinced they need broadband-at all." A couple of years ago, you might have followed telco executives' lead in blaming the music industry for chocking off any truly sought-after content that might drive surfers to make the switch. But that doesn't hold as much water today as the recording industry has been more aggressively working with various online providers, from webcasters to music retailers to music readily available to surfers. And in any case, file sharing systems like Kazaa has made an astounding amount of free content available at consumers' fingertips.
So what gives? The problem is that we are still not giving consumers what they truly want. Not a ¢99 download or subscription-based radio, but a compelling entertainment experience. This is the key to the success of the DVD. The DVD is not simply a technical upgrade to video home viewing but a transformation of the way consumers relate to movies in a way that was just not possible with the old VCR. Remove this factor and most of us would still be renting those VHS tapes at our local Blockbuster.
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