This story appeared on Network World Fusion at
http://www.nwfusion.com/columnists/2000/0703bradner.html

'Net Insider:

Content as pretender to a throne

By Scott Bradner
Network World, 07/03/00

One of the first topics I addressed in this series of columns in Network World seven years ago was the inability of phone companies to understand that the Internet is about connectivity - not killer applications.

A year later I went back to the same refrain and lamented that the phone companies could only think of data networking as a way to provide video on demand to countless couch potatoes.

For as long as I can remember, the phone companies - and many people in government - have assumed that this Internet thing was only a lead-in to a content-driven profitable global network. The National Informational Infrastructure and its global extension (GII) got a lot of press and attention from high-level politicians in the mid-1990s. These networks of the future were described in glowing terms, but boiled down to ways consumers could access content from a few very large content providers. E-mail between us peons was never mentioned (for example, what we see today as the Internet was never mentioned).

The feeling that content will drive the infrastructure has not gone away, and this feeling is not limited to the phone companies. Venture capitalists and technology pundits have joined the parade. It is a convenient dream. If it were true, there might be a way for ISPs to get out of the commodity transport business and make real money.

I've never thought the dream was going to come true. Now Andrew Odlyzko of AT&T Research has published a paper, titled "Content is not king" that backs up this view with real data.

The basic message of the paper (which is part of a much longer work on the history of communications and its implications for the Internet) points out that content is not all that big a business, at least not when compared with basic connectivity.

The annual phone business in the U.S. was about $256 billion in 1997 (the latest date for reliable data), while consumer spending on content was less than half of that at $133 billion. In other words, interpersonal communication is more valuable than watching video on demand.

It has always been puzzling to me why phone companies so deeply believe that selling content will be the revenue source of the future when their very existence is based in a content-irrelevant world. The "killer app" for phones, like automobiles, was individuals using them for general, unimportant things.

The importance of e-mail came as a surprise to the Internet pioneers; it was not even one of the first applications. E-mail and other person-toperson applications seem to be dismissed by too many pundits and vendors as they seek a dream that does not seem to be based in reality.

Disclaimer: Harvard used to do dream research and probably still does, but dreams on this scale would be a challenge to comprehend. So the above dismissal is my own.

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