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The broadband revolution hasn't reached the entire country yet. I recently moved from an area that had Optimum Online cable Internet, to a place where there is NO broadband available -- the local cable company said they expect to have Internet access by the end of the year. I'm stuck with dial-up for the time being. I'm also stuck with less crowding, less traffic, nicer people, lower cost of living, a bigger house, more land, and no mortgage. Sounds fair to me. :-D [EMAIL PROTECTED] Resignation May Help Ground a Visionary Medium January 14, 2003 By AMY HARMON Anyone checking e-mail on AOL these days will probably be confronted with multiple entreaties to try the company's broadband service, the keystone of America Online's new determination to charge a premium for online information and entertainment. If there is symbolic meaning to Stephen M. Case's decision to step down as chairman of the world's largest media company this week, it may lie in the message underscored by the insistent marketing: it is time for the online service to start pulling its own weight. Mr. Case, an archetypal Internet visionary, became famous for his grand notions of how the infant online medium would change the world. But even as many of those visions achieved degrees of reality over the last decade, the online industry is still struggling to turn them into a viable business. At AOL Time Warner and dozens of other media companies, tolerance for talk of digital revolutions and electronic frontiers has long since worn thin. And investors, no longer willing to coddle a not-so-new technology, are pressing for Internet companies and the online divisions of media conglomerates to be held to a grown-up standard of profitability. Analysts note that self-appointed Internet visionaries at other media companies, like Jean-Marie Messier at Vivendi Universal and Thomas Middelhoff at Bertelsmann, have already been ousted as their boards acted upon investor unrest. "We're at the point where media companies are realizing, `We can't subsidize our online operations ad infinitum; they have to start paying their way,' " said Jonathan Gaw, an Internet analyst at the market research firm IDC. "Steve Case clung to the vision and didn't pay enough attention to the practicalities." Most Internet companies, including AOL, became a lot more practical after the stock boom ended. In many ways, Mr. Case's departure is simply the culmination of a process that began when the AOL service began to drag down AOL Time Warner's share price nearly two years ago. In some ways, AOL's problems are a legacy of its own practice of giving away easy-to-use disks that provided Internet access to anyone with a computer, modem and telephone line. And for years, the online service benefited from the rapid acquisition of customers for its dial-up service, on which it had a healthy profit margin. But more recently, the migration of many subscribers to faster broadband services has meant that the company will make less money for each subscriber, unless it can persuade them to pay an additional fee for exclusive online access to its content - in many cases material from other AOL Time Warner properties, like Time magazine and Warner Music. But in some important respects, analysts say that AOL's problems are also emblematic of the Internet industry as a whole. As a social phenomenon, the Internet has been a big, big hit. An ever-growing number of users - in 103 million United States households, according to Odyssey Research - sign onto the Internet to e-mail one another and to find information on almost any conceivable subject. But few seem willing to pay for anything other than access to their e-mail. "The Internet transforms the way the world works, that is true," said Harold L. Vogel, a media analyst and author of "Entertainment Industry Economics." "The question," he said, "is how do you make money on it, and that is still unanswered." As in any industry after a period of rapid growth, companies like AOL are facing market saturation and slowing subscriber growth - although the online industry has reached a plateau in an unusually short period. The standard approach to coping with the maturation phase of a business life cycle, economists say, is to innovate by reducing costs and improving quality. But the economics of the Internet may leave little room for that. "With the Internet, the normal life-cycle problems are compounded," said Ari Ginsberg, a professor of entrepreneurship at New York University's Stern School of Business. "You've got a customer that's already not accepting very much cost. How do you improve quality and charge a decent price?" Moreover, some industry analysts argue that while people may well pay cable television companies for on-demand movies, the Internet has never been about mainstream media, and perhaps never will be. In other words, one of the main rationales for the merger of AOL and Time Warner might have been a fallacy. "Most people don't go online to see Warner movies or read Time Life magazines or watch CNN," said Vin Crosbie, managing partner of Digital Deliverance, a consulting firm. "They go online to communicate with one another and find information and content of interest to them that they can't get from mass media." And yet, there are signs that Mr. Case's long-held dreams of digital convergence may ultimately be borne out - whether or not on America Online's terms. Innovation, some analysts argue, is already taking place with high-speed Internet access and entertainment increasingly being delivered in digital form. Consumers spent $43 billion in online retail sales last year, according to comScore Networks, an Internet research firm. Nearly 20 million homes have broadband connections to the Internet. And online advertising, while still small, is growing at a much faster rate than cable television advertising did in its first few years, noted Michael Zimbalist, executive director of the Online Publisher's Association, a consortium of companies that includes Tribune Interactive and New York Times Digital. "The if-you-build-it-they-will-come mentality has certainly been completely tempered by a pragmatic business approach to investment," Mr. Zimbalist said. "But look at this unbelievable shift in consumer behavior. If the Internet had only been treated as an interesting sidelight for the past seven years, that never would have happened." http://www.nytimes.com/2003/01/14/business/media/14ONLI.html?ex=1043549547&ei=1&en=7f370b58c5702bbc HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact [EMAIL PROTECTED] or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to [EMAIL PROTECTED] Copyright 2002 The New York Times Company <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance�not soap-boxing�please! 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