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August 26, 2002
AOL as a premium cable channel
New York Times: "AOL Time Warner's executives came to a realization this summer: The only way to persuade AT&T and Comcast to distribute the cyberspace service over their cable lines was to package America Online as if it were a premium movie channel."
As Seth Schiesel observes in the article, AOL Time Warner's deal with Comcast initially benefits the cable operator, but could wind up favoring AOL if its offerings become "must-have" content like ESPN or HBO. Another way of looking at it is that AOL is making the same bet it made in the mid-90s, when it opened up its proprietary online service to the Internet. Everyone thought AOL would lose out to ISPs. However, AOL's combination of brand, critical mass, and user experience allowed it to thrive in an open market.
What if both AOL and the cable operators are wrong? Maybe the Net is more than just a new form of content, to be slotted into someone's traditional business model. Maybe, just maybe, open communication and new applications are what people really want from broadband, rather than snazzier Web programming. Maybe business arrangements and government policies will allow the real Internet to stand up. Is that too much to hope?
Posted by Kevin Werbach at August 26, 2002 9:23 AM
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