Trends & Developments
The Next Internet Revolution
There is an old joke that goes:
Who invented the telephone? Alexander Graham-Bell!
No, it was Leonardo da Vinci, but he had to wait 400 years for Alexander Graham-Bell to invent the other one
What has this got to do with the internet?
Well the lesson here is that a communication device is absolutely useless unless there is someone at the other end. Metcalfe's law puts this another way by stating that the usefulness of a network is equal to the square of the number of users. The internet is just another communication medium - like the telephone and the fax machine - whose usefulness is directly related to the number of people who have access to it.
Use of the internet at home continues to increase around the world.
In 1995, a report by the US-based National Science Foundation showed that only about one-fifth of users had access to the internet at home. Five years later, the first study by the Digital Future Project found that home access had increased to 46.9 percent of users. By the fourth year of the study home access had increased to nearly two-thirds of American households (65.1 percent).
Do you remember?
If you are older than, say, 35 you will remember a time before the internet. In fact you'll probably remember a time before PCs - my school proudly took delivery of a PC when I was in my final year... and I never got to touch it.
A whole generation growing up now has always had computers, video games and the internet and treats them all with down-to-earth familiarity.
The next generation of internet users
To this generation the internet is everything and anything they want it to be and the only limiting factor is access speed. And access speed is fast becoming a non-issue - a recent ACCC report puts the number of broadband accounts in Australia at 698,700 with broadband uptake growing at 14% over a three month period in 2003.
When the majority of users are on a broadband connection a whole range of other possibilities open up. High speed connections permit good quality viewing of video images - not just short clips but entire movie length films. Big players are not unaware of this - Telstra for example is poised to launch an internet-based video-on-demand service with Sony next month (March 2006).
So what does all this mean for business... and for life?
The answer is that we are really still at the beginning of the internet revolution. Like many revolutions in the past, the internet revolution had a false dawn - remember the "tech-wreck" in 2000/2001 when everybody got into the internet - and lost a lot of money?
A lot of people walked away from the internet at that point - those who have stayed in the game have quietly been watching their businesses grow and start to make some real money.
You know that something is happening when major media companies like News Ltd and PBL start buying internet businesses!
A combination of the steady increase in the number of internet connections in homes, and a generation growing up with the technology will mean that much more will be done with the internet over the next three years than has been done over the past ten.
Our 6 predictions for the internet over the next three years:
- most major entertainment companies will offer their films and videos via the internet
- providers of valuable information content will minimise free content and offer access to 'premium' content at an extra charge
- micropayment systems will evolve to allow internet users to spend small amounts at a time on internet-delivered products and services
- television will continue to suffer a drop in viewer numbers as people spend more time getting their entertainment and news from the web
- first usable devices to bring web content into the lounge via the TV will appear
- many other devices such as mobile phones and touch screen panels around the house will be connected to the internet
There will be no-one unaffected by this change and fortunes will be won and lost, not just in internet only businesses, but in 'normal' businesses as well.