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work within their corporate IT environments. You can t just wheel it in and turn it on. For this reason, it is difficult to make money with streaming media in corporate environments, though this is changing rapidly. The following sections examine key obstacles that prevent streaming media from making money.
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When Will the Audience Reach Critical Mass
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The short answer to this question is that it will happen when the technology works as well as television does, when the content becomes more compelling than the television experience and when the costs are comparable to those of television. To make the experience comparable to television, technically, pictures must look as good at full-screen resolution, they must play back without glitches, continuity must be preserved between program items, the players must be simple to install and maintain, and the receivers must be easy to operate, turn on and off instantly, and disguise their computer origins. Content cannot just be as good as television (or be repurposed television programming), it must be better than television. If it is not, why is there any reason to adopt streaming media Finally, the costs cannot be out of line with consumer expectations of what it costs them to access digital media today. As a point of reference, Figure 4.2 shows the number of US households with computers and Internet access. This is the basis for the streaming media audience.
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The consumer electronics industry has much to learn about streaming media and about interactive design in general. Every year, it seems, home audio and video gadgets provide ever more functions that nobody can use without a manual, since all the function keys are overloaded, sometimes several times over, and displays are often limited to a few lines of glowing characters. Until grandma can use a streaming media receiver, streaming will remain an unprofitable medium appealing to gadget and fashion lovers only. Careful receiver design can be achieved. Techniques for product design can ensure that the product is usable by the majority of consumers. Consumer electronics companies are focused on cost reduction, but they ought to shift their attention to the usability of their products. Tech-
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Figure 4.2 US households with computers and Internet access.
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December 1998 August 2000 November 2002 (Projected)
Source: Employment Policy Foundation
niques like quality function deployment have been successfully applied to the design of both high-ticket consumer durable goods and other industrial products, to produce elegant products that work simply. There is an opportunity here for a consumer electronics company to start making media receivers that combine media types. At present, the average home consists of a veritable forest of equipment for receiving television, satellite, cable, playing DVDs, VHS videos, CDs, and so on. I can count no less than nine boxes in my living room, with six remote control handsets. There must be at least 24 separate cables connecting them all. Unfortunately, I can see no sign that the established consumer electronics industry will devise practical and inexpensive streaming media receivers anytime soon, even though these are absolutely required to bring streaming media into the mainstream.
When Will Bandwidth Be Cheap
Technical progress is bringing the cost of bandwidth down at a rapid rate. However, the price of bandwidth is not determined solely by the
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characteristics of the underlying technology. Bandwidth price decreases depend on policy decisions and on the ability to deliver higher productivity from every employee of the bandwidth provision companies. Dramatic productivity improvements require capital investment. Bandwidth will only become cheap when the bandwidth providers make the investments necessary to make it so. Before they come to that point, they will need to be convinced of the riches awaiting them should they enable bandwidth-hungry applications such as streaming media. The stock market, in turn, needs to be convinced of the returns on their investments to be made. There is hope, however. Fiber optical communications systems can require far less maintenance than copper switched-circuit technology. Once the capital equipment costs have been amortized, it should be possible to provide flat-rate, unmetered access to consumers, at prices between $25 and $40 a month.
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