Content counts in fixed wireless Internet

Dumb pipes or content-rich apps? Like mobile operators, operators of fixed-wireless systems must consider if they simply want to be a means of distribution or if they want some say in the content that they distribute.

Lincoln Millstein, New York Times Digital (www.nytimes.com) EVP, said he believes that eventually content will be the differentiator as fixed wireless, DSL and cable modem operators attempt to compete. Millstein was speaking as part of a panel at the Wireless Communications Association (www.wcai.com) annual conference, Broadband Now!

“We’ve learned as publishers that traditional view of media and publishing is that we push content out to you,” Millstein said. “You may pay a small fee, but ultimately we’ll derive most of our revenues from advertising.”

That concept needs to evolve to a model where understanding and capturing the subscriber is ultimately the killer app, something both AOL (www.aol.com) and Microsoft (www.aol.com) are trying to do online. Once you own the subscriber, the idea is to intersect and sell to him at every point of contact, Millstein continued.

He cited several lessons that he has learned:

Media habits die hard. It takes a long time for people to change.

Broadband is not synonymous with rich media. In other words, just because we have broadband, that doesn’t mean that the consumer will use the pipe to access rich media; he may be perfectly happy with simple text.

Somebody has to pay. Either the consumer, organizations or advertisers must pay for content.

Things always take longer than people predict.

“At the end of the day, advertising is the highest margin source of revenue,” Millstein said. But how will advertising work?

Millstein asked how many had seen the ubiquitous pop-under advertisement for a wireless camera on the Internet. Millions of dollars have been spent on Internet advertising to develop market share for that camera.

The problem?

“Our users hate this pop-under ad,” Millstein said. If users have a 56K modem, for example, it’s a terrible experience waiting for the ad to emerge.

Millstein went on to say that computer users feel a sense of entitlement that they don’t feel with television. People will watch seven minutes of television advertising and stay with it. They will listen to radio, which is 30% advertising.

“But when it comes to using this medium (the Internet), anything that’s intrusive, anything that gets in the way of the user’s experience is catastrophic for publishers,” Millstein said.

Hon. B. J. Panda, Ortel Communications (www.ortelcom.com) founder & president and a member of India’s Parliament, agreed with Millstein, noting that he uses a program to strip commercials from the Internet.

Panda recalled hearing an industrial psychologist describe watching television as a “lean-back” experience, while using a PC is a “lean-forward” experience.

“As we move toward true broadband (E1 or higher), I wonder if we will be migrating toward not having the (computer) screen 15 inches away, but more of the home-theater system,” Panda said. He questioned what the “lean-back” experience might do to Internet content.

The original killer app for broadband was supposed to be video streaming, Panda said. But currently there is no true broadband in enough places to make streaming video workable.

“Broadband at a few hundred kb/s is not really broadband,” Panda said. However, he cited a local news show from India that he can access via the Internet. It’s “painful at 56kb/s,” but he looks forward to the time a couple of years from now when he can sit back and watch it more comfortably.

Kenneth Bleakley, Fonemed (www.fonemed.com) president, also believes that content matters. He said that the health care industry, although a laggard in adapting technology, could be one of the biggest clients for broadband providers within the next 10 years. Fonemed deals in medical call centers and currently depends on voice service to direct people to health care. Wireless broadband can play a significant role in the delivery of reliable health information, he said.

Bleakley pointed out that the industry also must be able to demonstrate to governments and regulatory authorities that it has something that is socially valuable and deserves the allocation of spectrum.

“Telehealth has a short-term political payoff and over the long term will generate consistent traffic over the network,” he said.

Bleakley is chairing WCA’s newly established Tele-Health Task Force. Information is available from Jennifer Norberg (jnorberg@fonemed.com) Fonemed vice president, or WCA’s Mark Ratchford (mark@wcai.com).