Second Life

Capsule:  Will the media go bravely and opportunistically into an embedded internet access future that brings cyberspace into the real environments in which we work and play?  Future growth for both content and distribution may depend on new products that use authentication for more than extending cable programming from the TV to the PC.  Internet Everywhere should follow TV Everywhere into a new phase of technological development that blends wired and wireless communication into a single mobile infrastructure.

BBC
SUNY Stony Brook on Wireless Networks
Nomadix

 
This week, the BBC World Service and PRI, which includes its US WGBH-Boston partner, celebrated one of the Internet's 40th birthdays with a Leonard Kleinrock interview.  Kleinrock originated the Internet predecessor ARPANET, a first-of-its-kind packet-switched computer data-sharing system for which Kleinrock's UCLA-and-SRI based computers formed the first four-node network in 1969.  In addition to his substantial UCLA stewardship, Kleinrock went on in the most recent decade to chair Nomadix--a company focused on "providing solutions for the public access market to create multi-use, multi-revenue networks that require zero configuration for end user access"--now part of Japan's NTT DoCoMo.

In the BBC interview, Kleinrock is asked "what comes next?"  His enthusiastic response: the internet will change most dramatically in the next 40 years in how it appears to the user.  Kleinrock insists that the infrastructure for internet access and navigation will change dramatically, moving content--including data, voice and video--between embedded screens, physical sensors, microphones, speakers, applied nanotechnology and virtual imagery that will "release (personalized versions of) cyberspace into our physical space." 

One of the clearest hints that Kleinrock's vision is closer than some may think is the enveloping hush of virtual publishing moving hard physical books, textbooks, newspapers and magazines onto soft mobile Kindles, upcoming tablets and Google-aided search.  The originator of Amazon's Kindle "WhisperNet"--through which Kindle readers can buy and have a book, newspaper or magazine of their choice within a minute of ordering it--was Sprint.  The wireless contract has now moved to AT&T, where scale will support the seamless spreading of an application destined for the masses.

Kleinrock also sees improvements in store for personal authentication, necessary to provide authenticity and security within the increasingly global and mobile internet environment.  As the cable industry's TV Everywhere initiative increasingly is known by the informal shorthand of "authentication," it seems right that the industry develop a view of authentication's broader future applications in the home and workplace.

Cisco's John Chambers, an advanced media thinker as well as a major cable industry equipment supplier of both set-top boxes and modems, is an avid user of videoconferencing in his home and office.  Chambers is reputed to believe that top quality videoconferencing will replace some portion of our personal and professional travel in the near future.  Seeing embedded personalized communication as a benefit that derives some value from travel cost-and-convenience savings makes sense and may lead to pricing and offer logic inside the cyber-home/office.  Cisco is an infrastructure partner to NTT DoCoMo's Nomadix--which Kleinrock led until 2006--along with 3Com, Arrowspan, BelAir Networks, Sky Pilot, Trapeze, Tropos Networks and others.

Where might today's major US media distributors enter this new paradigm?  Aggressive partnerships with some of the wireless distributors moving content around the human experience will help.  Much of Kleinrock's inspiration for packet-switching as a means of moving content on the ARPANET was theoretical.  He developed problem-solving logic for mass connectivity away from his physical computing environment and demanded that the environment shape itself to his vision. 

Cable, telecom and satellite distribution might adopt a similar stance, envisioning the post-modern home, office and store all-in-one, shaped by multiple personalized interconnected content and distribution with many well-authenticated cash registers at the ready.  This would require cable and telecom to move off their traditional models of controlling every access point and output of their networks--even if only just a little bit. 

By assembling a physical and deal infrastructure that includes wireless internet access providers, media distribution might see its smart home plans materialize, blended profitably with smart commercial and in-home entertainment.  Media content might escape some of the confines of distribution collars for a new environment that moves its products around town and resells them through traditional and alternative retail distribution hybrids.  

A few examples of how the media's embedded personalized second life might take hold?  Traditional distributors could break down some of their one-dimensional walls between homes and businesses, acknowledging the massive portability of life and work.  Today, distribution and content use anachronistic place-based rules for defining the types of services they provide and their rates.  Everything is divided into Residential Service and Commercial Service. 

For video, the origin of the strict separation between homes and businesses originated with content companies who didn't want to see group viewings of pay TV content eclipse their ability to sell to alternative commercial distributors--including theatrical distributors at the head of the line--at very high prices.  For broadband, the rules are based on some combination of distribution's network management preferences, capital conservation requirements facing pricey line extensions and the drive to profit.

If it's true that the biggest near-term US job gains must come from small and mid-sized businesses, cable and telecom might take a worthwhile tour through the place-based realities of those businesses.  Many small businesses operate from homes.  Many large businesses rely heavily on the work that their employees do "after hours" at home.  If media distributors were able to reserve the distinction between home and business in only those cases where it actually benefited the customer, new profits through integration might logically follow.

Why shouldn't Bloomberg, Thomson Reuters, WSJ Interactive/Market Watch/Barron's, The New York Times and The FT/Pearson be encouraged to bring their business acumen, reporting and information loads into the home through cable and telecom distribution and disruptive marketing?  Bloomberg's business data and communications service purchased at home is a pretty pricey extravagance.  Given that the Bloomberg market has suffered a few down-sizing dents, can a less expensive more widely targeted wired and wireless business news service create value? 

What about the revenue that can be captured driving the in-home media business out-of-home?  Comcast, Time Warner, Verizon and AT&T might originate Enterprise/SMB products that integrate "home" content and services--like TV and search--with wireless networks serving offices and stores. 

Imagine the transformation of traditional home-based products--premised on two-screen internet-aided TV viewing--into a suite of business products tailored to the real work experience, enriched by multimedia out-of-home screens interconnected via wired and wireless hybrids with office and home PC's.  By integrating fixed and wireless distribution platforms with audience measurement triggered by mobile cards or device authentication, big distribution can enable communications and advertising systems that power large and small displays, stores and offices.  They can also sponsor the cost-effective replacement of some voice systems with multifunctional cell phones for home and work.

The integration of home, retail and office products might even result in widespread revenue streams based on the Kindle phenomenon.  The Kindle and its "Whispernet" have made the immediate physical gratification of our buying impulses contribute to the value of the products bought.  Maybe that's why Kindle users are reputed to purchase 40-50% more books after getting turned on.  Might businesses as well as stores, theaters, arenas and MDU's benefit from being a backbone for the on-premise sales of selected advertised products shown on integrated screens in common areas and on personalized mobile devices?  With a better integrated system for revenue development, we might even embrace the fact that we all shop at work as well as at home and on our "weekends."

If the complex products offered by traditional media content and distribution companies can't be made to fit into the backwards Second Life integration of cyberspace and physical space, new media content and distribution hybrids will likely lead the charge.  A personalized Google made for office and home that targets each individual's lifestyle and commercial avatar is likely.  Office parks, MDU's and stores can build and drive profit from their own wireless and wired distribution hybrids.  So can governments, if there is a will inspired by a need.  But progress will be faster and bigger if today's big media businesses stay opportunistically engaged.  To extend their own profitable revenue growth, they might turn their gaze from the last war that birthed their disruptive media businesses to the virtual and real victories to come.