One of the most interesting trends in personal computing has been the growth of storage. In 1992, I sold a used 1 GB external hard drive for $900. The enclosure had its own power supply and was the size of a shoe box. Fifteen years later, those 1992 dollars would buy me 4,000 times (4 Terra Bytes) more storage. In fact, $15 will buy me a 2GB postage stamp sized SD card on Amazon. No other component of the computing has exploded this way, not CPU performance, not Network connectivity, not even memory (DRAM). While CPU speeds have hit a speed bump near the 4 GHz point, there is no end in sight to continued explosive growth of personal storage. In April of 2006, I had this very conversation with Stephanie Mehta of Fortune magazine, and she wrote the article “Broadband’s pipe dream - Forget about the broadband wars. It’s about storage, stupid“. The fundamental thesis of this article is that the economies of storage are vastly superior to economies of the pipe.
What does all of this have to do with Downloadable media? How will media delivery and consumption evolve on the Internet? It is helpful to look back to understand a likely pattern to emerge in the future. Back in 1995, one of the hottest destination on the web was a site which hosted a lot of user generated content. Geocities was eventually bought by Yahoo for twice the price Google paid for Youtube. As the web matures with professionally produced content and applications, the Internet traffic patterns are consolidating with the top 50 or so destinations driving a majority of the traffic and audiences. As we look into the future of video (and audio) on the Internet, I see a trend where the audiences will “go to” a few (consolidating) major web destinations on a regular basis, and a super large majority of consumers will “visit” their own “personal storage” on a super regular basis. Let us call this exploding personal storage as “my site”. My site is where all of my media is delivered to me. There are two forms of download deliveries which will end up my in my site (a) RSS based subscription content delivery (ex. using an application like iTunes, or the soon to arrive Adobe Media Player) and (b) Direct Downloads (ex. using applications like BitTorrent, iTunes store purchases, ripping web video with Real Player, etc.)
So why ADM? Media companies have known for a long time that content needs to be delivered to be successful. For example, Fortune magazine would much prefer to sell you a subscription for a fifth the magazine retail price. Therefore it is a no-brainer to assume all content producers, large and small, will want to prep their content for automatic delivery to subscribers. As consumers continue to snap up large high def TV screens, their tolerance for low quality web video is going to wane in preference to higher quality HD downloads. The problem now, is who pays for all this high quality content on “my site”? Clearly I will pay for the stuff I purchase from a content store. The majority of the content on my site will be free. It is becoming obvious that advertisers have a major role to play in making content free on my site. But there are a lot of open questions. ADM can begin to help answer some of these questions. Questions like - What are the standard forms of acceptable advertising on “my site”? How much should advertisers pay for “my site” audiences? What personal information, if any, should I disclose for the privilege of free content on “my site”? How is all of this measured? Can much of this be standardized in a manner acceptable to consumers, publishers and advertisers? Can the grand bargain of free content for advertisements be well understood and largely acceptable to “my site” audiences?
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