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Media & Entertainment
Structuring
Convergence
Paid Content
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The "Vision" Thing
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The Internet - Some Perspectives
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Written:
2001
We
have been hearing of convergence for a while now. The debates have
been raging as to whether this is just another hype-cycle or perhaps
something deeper. The answer of course is both. Just like the Internet
itself, there is a very large penumbra of hype around a very revolutionary
core. Those who ride the hype curve may find themselves washed ashore
on the sands of disillusionment. But those that ignore the core
may find themselves drowning in a sea of change. As managers and
business leaders, you need to stay in step with the many faces of
convergence - as they could offer you entirely new ways of acquiring
customers, servicing them, interacting with them or building operational
efficiencies within your organization. If you belong to the media
or telecom industries of course, expect a Tsunami.
Depending
on where you approach the problem from, you could be seeing a different
picture of convergence. Like the proverbial elephant, convergence
offers different things to different people, each of them correct
though none of them paint the picture completely.
At
the core of convergence is, of course, the coming together of voice
and data. This sounds basic but the ramifications are really epochal.
To dismiss the trend of convergence thus, is akin to dismissing
the Internet as a larger network and nothing more. It is, of course
much more than that. And like the Internet, as and when it becomes
mainstream, convergence will create fundamental changes in the way
we communicate, transact and live our lives. It will draw new social
patterns and systems. It will cure some societal problems and spawn
new ones. It will make telemedicine, tele-government, DTH, Video-on-demand,
Videoconferencing and voice activated remote devices a part of our
daily lives. In the converged world, your digital music system will
not be playing CD's, but will instead, log in to the record company
archive in which you have a library membership (probably at the
cost of 1 CD), and play any song you select from the approximately
100,000 tracks available. It will also have a memory or index of
all the tracks you've played and how many times you've played them,
so that it can soon set you free from the task of selecting music
to play. More importantly, the pipe that carries all these bits
of data back and forth from your home will be the same one that
carries your voice when you use the phone. But I'm jumping the gun
here. Lets get back to the Elephant as we see it today.
In
an attempt to demystify the not-so-white elephant, I've tried to
slice it into manageable pieces.
Device
Convergence:
This
is the front end of convergence. This is the part where your phone
is also a memory device and an Internet access device. Or where
your TV is also your Internet monitor. Or where your PDA is also
your phone. And down the pipeline are devices that we probably cannot
conceive of, in our pre-converged consciousness. It is quite possible
that the next generation will sit around in the evening watching
interactive programming on Interactive-Tele-Entertainment Devices
(known today as the Microsoft Xbox), and fighting over not which
channel to watch, but over a vote that will decide what the lead
character in an interactive soap should do.
Players
in all the industries touched by these trends are gearing up for
this world of converged devices. Sony, Nokia, Microsoft, 3Com, DirecTV,
to name a few. The changes will not be sudden. The products will
morph in incremental fashion. Today's avatars may not look like
revolutionary products, but make no mistake, these are the harbingers
of tomorrows converged lifestyles. DirecTV today is only TV with
programming delivered directly to the home via satellite. However
its roadworthy cousin - the GM OnStar program is delivering not
TV programming, but real time data to and from Vehicles.
Which
brings us to the second third aspects of the convergence phenomenon.
The access and the Network. Clearly, carrying voice
and data together imply a certain minimum pipe-size. They also require
unique systems for controlling, managing, estimating and routing
the traffic that is flowing through these pipes. If you are going
to access the Net through your PC, your TV and your Mobile Phone,
it clearly means that each will have its unique connectivity challenges.
While the PC is the easiest to hook up to the public network, the
TV is not. Enter Cable Modems. And since you want to do more than
send text messages - you actually want to see a replay of your favourite
game, or movie or sitcom, you actually need a heck of a lot of bandwidth
coming into your device. Broadband access promises to deliver this
kind of bandwidth in an affordable manner. Broadband itself spans
technologies such as XDSL, Cable Modem, Wireless (3G), Fibre to
Homes and Satellite. Going one step further, the backbones and carriers
(where Fibre is the common messiah) is where the flood of converged
voice and data traffic will be rushing around the globe. At the
core of this are a new generation of switch called the Softswitch.
This is a piece of software that allows switching between (New)
IP and (old) Circuit based networks. While the former is the Internet's
standard, the latter is the domain of the PSTN (Public Switched
Telephone Networks). Cisco, Nortel and Lucent are all throwing significant
amounts of money behind Softswitch technology.
Apart
from the equipment providers, carriers and last mile providers also
jostle for space in this layer of convergence. The carriers are
at this point of time recoiling from the excesses of the past couple
of years. But players like Level 3 Communications and Qwest, should
not be written off just yet. One of the interesting trends in this
space is the shift of network intelligence from the "core"
to the "edge". This means that routing and traffic management,
for example could happen much closer to the consumer than earlier,
and very close to the "last mile". The last mile itself,
is currently witnessing a plethora of hitherto unconnected competitors.
Just think, potentially the competition for your Internet connection
could be between MTNL, or your cable connection provider, or your
mobile phone company, or a Satellite company that wants to beam
you up, Scottie!
Services
& Industry
All this dovetails into the next layers, of converged services and
industries. Here's where the story gets really interesting. Expect
to see many new services being rolled out here. And old services
morphing significantly. For example, in the converged world, how
do you get billed? Who do you pay? Who exactly owns this pipe into
your home? And how do they bundle new services? It is possible that
entire industries may converge. Telecom, Media and Gaming, are 3
industries where the boundaries may blur soon. The Time Warner/AOL
merger is offers a sneak peek into what may happen across the space.
A well known investment bank uses the term "Mediacom"
to define a new merged entity in this space. Marshall McLuhan may
be proved right in ways that he would not have imagined. The medium
and the message are indeed converging.
What
everybody wants to do is offer a bundle: a bundle that has access,
gaming, news and entertainment. This was, of course the dream of
many portals in what is now a footnote of the digital revolution.
However in the converged environment, it may become necessary for
this bundling to take place at least one step before the customer.
Accordingly profile capturing and storage would be narrowed down
at this point, and the entity that controls this would in fact own
the customer and this would obviously be a goldmine. (Watch this
space for Microsoft's move spanning .NET, Hotmail, Passport and
Xbox).
Consumption
The most understated and potentially the trickiest hurdle that convergence
has to cross. The end user and his habits need changing. People
speak about the lean-forward nature of the PC and the lean-back
nature of the TV. Stance apart, a converged world will essentially
blur the lines between entertainment, media and work, in an immersive
space. How will we take to it? How will our parents? Our children?
It may take an entire generation for this to become a way of life.
What will be the societal impact of this? We will be at once, more
connected, and more isolated.
Clearly,
different parts of this will move at different speeds. Triggers
will be independent as well as interdependent. The challenges will
vary. Most importantly, the combined impact of all these layers
of convergence will definitely stretch our imagination to conceive
in any degree of comprehensiveness.
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