It's The Connection, Not The Content

Say That Again

from the why-telecom-should-buy-the-music-industry dept

Andrew Odlyzko got quite a bit of attention a few years back for being the first person to point out that Worldcom’s (and others’) claims that the internet was doubling every three months wasn’t even close to true. Now he’s causing more trouble debunking some internet myths. He points out that network utilization is incredibly low, and those building capacity are going to face problems. When you look at the home user, it turns out they use an average of $2 worth of bandwidth per month – despite paying $40 or $50 for their connection. He also suggests that those who believe there’s a business model in content are sadly mistaken. Connectivity is the real issue (which goes along with my claims that people need to sell services – not goods – online). In fact, he half-jokingly suggests that the telecom industry should just buy up all the music and movie licenses in the world, and let people trade these freely online. He suggests this would benefit the telecom firms immensely. The revenue from such content is 5% of the total revenue of the telecom industry, and the increased bandwidth use would more than make up for the difference. Of course, he admits that this is impossible “for a variety of political, economic and legal reasons.” Still, it’s an excellent point that puts a lot of the current debate over file sharing into perspective.