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world in broadband penetration, according to figures published by the OECD (Organization for Economic Cooperation and Development), or, stated another way, in last place among the leading economically developed nations. Even with intervention to meet the government s stated aims, broadband penetration will struggle to exceed 24 percent by 2005, but on current estimates, it is unlikely to reach more than 6%. Even at 24% penetration the UK would still lag behind the US and Germany. Yet the economic and social prosperity of any town depends as much on broadband connectivity as on the quality of its transport links, according to the South East England Development Agency. Connectivity is as vital as good roads. The $32 billion third-generation license auctions that took place in the UK in 2000 are being held partially to blame. The auctions are thought to have effectively robbed the UK of telecom company investment in broadband. Mainstream broadband connectivity continues to vary from country to country, but by 2004 more than 90 million households worldwide will be taking advantage of a high-speed connection, according to the Broadband Report from eMarketer. South Korea and Canada are leading the broadband charge, with about a 50% penetration in each country. Most other countries are hovering around 10%. Demand remains high in the US, and the research firm expects the country to reach 30% penetration in households by 2004. Accessing a broadband connection via cable will remain the access technology of choice through 2005, but DSL will continue to gain ground. In the United States alone, DSL subscribers will reach 13 million households by 2004, up from 1.5 million last year. The market for alternative broadband technologies fixed wireless, satellite, and fiber will top 32 million subscribers globally, up from 7 million in 2000. Widespread adoption of high-speed Internet access connections has been slow because the majority of mainstream Internet users still are not convinced of the value of upgrading to broadband, says Ben Macklin, a senior analyst at eMarketer. This is a chicken and egg scenario, of course. If the broadband connectivity is not there, it is difficult for applications that would convince consumers of the value of upgrading, such as streaming media, even to exist. Cost has been another deterrent to widespread adoption in some countries. In England, where penetration has been relatively low, the average cost of service is roughly $60 a month. In South Korea, by contrast, service fees are about $25 a month, and the adoption rate is about 50%.
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While all of this is seemingly gloomy reading, from the point of view of streaming media, it does nevertheless appear that a significant market for broadband streaming media will begin to be established around the year 2005. This is less than three years away.
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Until the squabbles between the owners of copyrights, represented by bodies such as the RIAA (Recording Industry Association of America) and the Internet file sharing and Internet radio companies reach some form of conclusion, streaming media will be prevented from reaching mainstream adoption. There are positive signs of early resolution, however. There was news of out-of-court agreements toward the end of 2001, along with several high-profile purchases of file sharing companies like Napster by established record labels like Bertelsmann. Hollywood was beginning to mobilize to make its content available online, if not streaming. Rights management solutions were being proposed by many companies, including streaming media heavyweights Microsoft and RealNetworks. It is likely that rights management will come of age during the latter part of 2002, or else in early 2003. What remains less clear is whether or not consumer acceptance of rights management will be forthcoming. Rights management solutions restrict freedoms currently enjoyed by consumers of digital media and may be abused by rights holders to milk their customer base for higher profits. Rights management may settle down to a form of shareware marketing, where consumers pay what they are able and according to what they think the media asset is worth to them. However, don t expect to see any such resolution between consumers and content owners before the end of 2003.
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