Population Statistic: Read. React. Repeat.
Monday, April 27, 2021

The economics of Web media have moved from the incidental to the essential, as demonstrated by conscious bandwidth and access restrictions by 2.0 sites in economically less-robust regions.

Web companies that rely on advertising are enjoying some of their most vibrant growth in developing countries. But those are also the same places where it can be the most expensive to operate, since Web companies often need more servers to make content available to parts of the world with limited bandwidth. And in those countries, online display advertising is least likely to translate into results.

This intractable contradiction has become a serious drag on the bottom lines of photo-sharing sites, social networks and video distributors like YouTube. It is also threatening the fervent idealism of Internet entrepreneurs, who hoped to unite the world in a single online village but are increasingly finding that the economics of that vision just do not work.

Last year, Veoh, a video-sharing site operated from San Diego, decided to block its service from users in Africa, Asia, Latin America and Eastern Europe, citing the dim prospects of making money and the high cost of delivering video there.

This development makes me wonder just how close we are to the end of the beginning of the Internet as a full-fledged mass medium. So far, the online preserves are open and free to anyone wanting to set up shop, whether for fun, profit, or a combination thereof. But that’s only because there’s a lot of empty space to fill up to make the medium “real” — eventually, the bandwidth costs reach a saturation point, and real money comes due.

Is this cost-restriction in the formerly-known-as Third World the first sign? It seems like the global-level digital divide is now being reinforced via feasible content delivery.

It’s not like this is unprecedented: Radio went through the same process, with an early 20th-Century Wild West mentality where anyone — individual, business, church, etc. — with the right equipment could jump on the airwaves. Replace “right equipment” with “computer” and “airwaves” with “Web”, and the parallels should be clear enough.

by Costa Tsiokos, Mon 04/27/2009 03:12pm
Category: Business, History, Internet, Media, Radio
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