UCG and distribution pipes: trouble ahead?

I attended a panel discussion this past week where half of the panel consisted of senior execs of giant tech companies (AOL, Microsoft) who discussed their plans for creating content that is to be monetized via advertising.

OK, here is the verdict in a nutshell: Expect ever changing forms of advertising to be plastered over two types of pages: User generated content and “premium” content.

Premium doesn’t necessarily mean you will pay for it, but rather that it is highly branded content that is more likely to be sent “at” you in something akin to a broadcast model as opposed to something that users can participate in creating.

To me, this is ongoing evidence of the Hollywood vs Silicon Valley models of finance – closed vs. egalitarian, with Madison Avenue sitting in the middle and playing the cards that are dealt hand by hand without making a long-term bet.

Is this a good idea?

Well it is what it is, but a TV advertisement I saw over the weekend seems oddly discordant in the way it both embraces and rejects the longterm possibilities of capturing the distribution of user-generated content in a way that illuminates the nature of of broadcast vs. packet networks (“IP over IP”).

Verizon has produced a slick, MTV/ESPN highlights style commercial featuring a “video game athlete”. Maybe if I played games more then I do, I would recognize the guy, I have to say the ad is unique for at least purporting to have someone endorse a DSL service.

More interesting to me is that the pitching the commercial is that the service is super high speed, something no gamer can live without.

Such a service would be really interesting – is there a market for it? I think there might be a set of gamers that would really want a content-distribution service such as DSL that was optimized for the game experience. There is certainly more then a small niche of gamers buying high end pcs and networking gear in order to enjoy games in the home. A look on the shelves of Fry’s will show that the broadband network is by far the biggest bottle neck in any serious gamer’s play experience. So the ad caught my eye indeed.

Something else about DSL (and other broadband services) has always bugged me. The fact that the speeds you can achieve uploading data are only a small fraction of what you can download are surely shaping the experience of the user-generated-content aficionado. Gamers don’t buy home networking gear that can send information out faster then it can receive information from other players – such an arrangement would destroy the experience of the game. So why would it be any different when the link is to remote players? Simple answer: it isn’t.

Verizon is not only misleading in its ads that top gamers would be interested in the service as opposed to settle for it, but it is missing a bigger opportunity. Given the increase in interest in user-generated content, and the changes in band-width usage patterns that is already engendering, is it really best to have asymmetrical speeds up and down, or to treat symmetrical speeds as a premium “business service”?

I am not talking about only high-end gamers, but Verizon and Comcast and all the rest are missing a big boat: photo-sharing, and soon video sharing are already facing limits on the enjoyment of end-user experiences because of uploading bandwidth. I recently came home for a trip with about 700 pictures on a 8MP camera. In order to share them with others so that they can make prints at the size they prefer I need to upload the original photos, averaging 2.4 MB each to a service such as Yahoo photos. To do so is going to take something like 16 hours even on my 6MB dsl line.

Why? Who gains from this, and who would gain if it were to change? UCG users gain if it changes, and that might include a few people who would extend the meaning of UCG to include running a web server. So what though? How is that different from the average person who could take pictures on a very ordinary faster then they could upload them, and hence already is maxing out the upload capacity?

The broadband distributors have always pleaded that the lines would be clogged with web servers, as though that is not a virtuous use of paid-for bandwidth, but they only dare implicitly to make the same argument to not the cutting-edge geek but to the average family sharing photos and videos. All the while misleading by implying that gamers benefit from this arrangement already when in fact they don’t.

Shame on Verizon for the misleading marketing campaign, but shame on the broadband distribution industry for not recognizing that the game is 60% changed towards UCG and away from broadcast and not seeking to fill the opportunity. I realize that the cable providers might upset their broadcast partners if they do so, but DSL players have little history in that space.

I think the time has come for the end of restrictions on upload speeds in the marketplace – from this day forward, the distribution channels appear to be colluding to prevent to creation of UCG content types that the market is asking for in order to protect historical revenue streams.

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