Future Tech

Full Speed Ahead

The capability of the Internet to facilitate communication and deliver rich, exciting and informative multimedia experiences may seem limitless. But slow dial-up connections and thin phone lines with limited bandwidth are taking all the fun out of the Internet Revolution, frustrating users and Internet application developers alike. ISDN, cable and T1 lines are all capable of breaking the bandwidth bottleneck, but the great expense and limited availability of these services are leaving many users out in the cold.

Enter Digital Subscriber Lines (DSLs), the express lane of the Internet. DSLs use digital signal encoding to vastly increase the amount of bandwidth available over plain old telephone service lines, all for a price that's not much higher than the typical dial-up service--and because it uses existing phone lines, there are no installation fees. Faster Web-site loading times may be something to look forward to, but widespread DSL usage promises to change the very nature of the Internet itself, says Bill Rodey of the ADSL (Asymmetrical Digital Subscriber Lines) Forum, an industry association. "If content were water, at this point, there's far more water than there is pipe to carry it," says Rodey. "If you build a bigger pipe, the water will fill it. [In other words,] once you get DSL, you're going to see people developing applications that can use more bandwidth and start to fill the pipe."

The affordability of DSL will bring true multimedia experiences to the home and office, says Rodey, including fully interactive video advertising, real-time videoconferencing, video e-mail and even shared virtual reality. Telephone companies have been slow in offering DSLs to consumers, but this is about to change. DSL service is available in several major markets, and its popularity with consumers has encouraraged major industry players such as Compaq, Dell, Intel, Microsoft and Cisco to include DSL modems in future product lines.

Enhancing the Internet experience for users will also create more fertile ground for small online retailers and advertisers. Highly interactive ads, such as the banners designed by Redwood City, California-based @Home Network's Enliven Business Unit for Lexus Automobiles, which present consumers with a short, humorous lifestyle questionnaire and then suggest a car model based on the responses, may actually become more powerful than traditional media, contends Jim Nail of Forrester Research.

"Once the technology matures, advertisers are going to find that the Net is more effective than TV, radio or print," says Nail. "If you can get a consumer involved with the experience, it's infinitely more powerful than a regular TV ad. You can't just tell people you have a great product. You have to show them. The Internet is the `show me' media."

Internet advertising will be more responsive to the needs of advertisers large and small, says Nail. Feedback is faster and more complete than with traditional media, allowing advertisers to scatter their ads on Web sites regardless of demographics. The possibilities of this new medium are not lost on advertisers: According to Forrester Research, in 1998, North American advertisers spent $1.3 billion online. By 2003, that amount is predicted to reach $10 billion. Still, the Internet has a long way to go to catch up with TV: Advertisers spent well over $40 billion on TV ads last year.

Advertising may help defray the costs of operating a content-oriented Web site, but the growth of content-based sites like Microsoft's Slate e-zine has been severely stunted by the painful fact that consumers just aren't willing to pay the cost or make the long-term commitment of a subscription. In the future, however, consumers will ante up for content on a pay-per-use basis, using full-service transaction services from companies like Seattle's Qpass Inc., which will allow Web sites to charge variable prices for the single use of an article, online forum, database or any other Internet service that is deemed to have value.

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This article was originally published in the May 1999 print edition of Entrepreneur with the headline: Future Tech.

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