Stick a fork in it, physical media is done. All hail digital apps!
GigaOm’s Om Malik just penned a post stating the obvious. Streaming has replaced music CDs and DVDs, books are increasingly purveyed as e-books, and mailed catalogs and product ads are giving way to branded apps, complete with notifications for sales, company news or promotions.
While it may spare more than a few of the world’s trees, other industries are being laid to waste, including printing companies and the U.S. Postal Service. The USPS lost as much as $5.1 billion in 2011.
“Admittedly it will be some time before tablets and mobile devices become ubiquitous, but there is no doubt about its inevitability,” Malik continues. I agree, but even so, mobile gadgets will really only be half of the equation — and the reason is partly due to the data caps imposed by most of the major cellular carriers. If not for this, we all would do far more on our phones and tablets.
Even so, that still only scratches the surface. To completely forego physical media, you have to think in broader terms. For a fully cloud-driven way of life to take off, we need to be able download/stream and upload at will, from our desktops and home entertainment consoles as well as our mobile gadgets. And you know what that means: We are hopelessly reliant on residential broadband providers — sadly, frustratingly and completely dependent on them.
Netflix’s Reed Hastings underscored the dilemma recently (though ham-handedly): Though general consumers may not be aware of this, more providers, including Comcast and AT&T, are capping or throttling users’ data bandwidth. Time Warner has been trying to institute per-usage charges for ages, most recently in Texas. I hear the situation’s worse in areas abroad as well as in Canada, where outlandish overage charges seem to prevail.
Here in the U.S., Comcast sets a 250 GB data limit, which might seem generous to some subscribers. But there are now full HD and 3D videos online, and more people are gaming, streaming music, performing cloud back-ups, video chatting and other activities. This already leaves some households busting through that ceiling, and that’s only going to get worse over time, as more products and services develop.
Unlike for wireless providers, spectrum isn’t so much the issue for cable and home residential data. This means that the data caps may boil down to one of two things: Either the operators’ desire to control traffic (to prevent any bottlenecks in their old and not nearly extensive enough pipes), or just plain greed. Either way, the ones who engage in this practice have users by the neck.
(Side note: Can we just take a moment of silence for those poor Internet users in rural areas? Often times, the only provider in those regions is HughesNet satellite Internet, whose users must contend with daily limits, otherwise be throttled back to the stone age, i.e. the era of dial-up speeds.)
Cable and broadband operators need to start investing in infrastructure, and they need to do it yesterday. They’re already playing catch up as it is — if they continue to lag behind, they’ll drag all their subscribers down too. And not just end users. Consider this: What potential is there for companies to innovate incredible new platforms when users don’t have the bandwidth for them?
I think a tipping point is coming. Eventually streaming and other data-using activities simply won’t be able to move forward in a meaningful way if too many users are choked by limits. We haven’t hit that threshold yet, but it’s on the horizon. Until we get there — and move past it — it might be a little early to pronounce the death of physical media.
