Content is Serf

Submitted by doc on Sat, 08/26/2006 - 20:09.

Andrew Odlyzko's Content is Not King is Required Reading for anybody (and that's most of us) who think the Net's main practical and economic virtues involve content distribution. A sample:

The main reason to question whether content will ever make giant contributions to network costs is that by the time convergence is likely to occur, at least a decade into the future, content transmission is likely to be a small fraction of total traffic. Further, most content will probably be distributed as ordinary file transfers, not in real-time mode.

Our preoccupation with real-time is supported by our experience with telephony and television, the primary carriers of which unfortunately provide last-mile service for approximately all of our homes. But this will, inevitably, change. Kevin Marks has been saying Live is Dead for some time. Of course it's not completely dead; but the case for its death has been made by TiVo for many years now.

Andrew's conclusion...

Whether content is king or not has direct relevance for the question of whether the Internet will continue to be an open network, or whether it will be balkanized. If content were to dominate, then the Internet would be primarily a broadcast network. With value proportional to the number of users, there would be few inherent advantages to an open network. The sum of the values of several completely or partially separate networks would be the same as of a unified network. On the other hand, if point-to-point communications were to dominate, and if Metcalfe's Law were to hold, there would be strong economic incentives to a unified network without barriers. This is considered more fully in Section 4 of [Odlyzko3]. The general conclusion there is that even though Metcalfe's Law is not fully valid, the incentives to maintain an open network are likely to be very strong. This will be largely because content is not king, and effective point-to-point communication will demand easy interconnection.

An extreme form of the "content is king" position, but one that is shared by many people, and not just in the content industry, was expressed recently by the head of a major music producer and distributor:

What would the Internet be without "content?" It would be a valueless collection of silent machines with gray screens. It would be the electronic equivalent of a marine desert - lovely elements, nice colors, no life. It would be nothing. [Bronfman]

The author of this claim is facing the possible collapse of his business model. Therefore it is natural for him to believe this claim, and to demand (in the rest of the speech [Bronfman]) that the Internet be designed to allow content producers to continue their current mode of operation. However, while one can admire the poetic language of this claim, all the evidence of this paper shows the claim itself is wrong. Content has never been king, it is not king now, and is unlikely to ever be king. The Internet has done quite well without content, and can continue to flourish without it. Content will have a place on the Internet, possibly a substantial place. However, its place will likely be subordinate to that of business and personal communication.

I would add a class of customer not currently supported by purposely crippled and asymmetrical last-mile carrier service: small and home-operated businesses. Entrepreneurs and established businesses until now (and the near future) have had to set up shop outside their home service. There is enormous potential, for the carriers, in supporting business activity on un-crippled symmetrical broadband to homes and small businesses. They can barely imagine that kind of business now (though I am told that certain European counterparts are already downstream in this direction). But they will have to, eventually.

Meanwhile, dig Andrew's piece.