Media invasion

Without losing sight of the fact that the Internet is 'just another computer network', it has already become an established part of the general US information and entertainment business, long before the Internet has achieved even simple commercial ubiquity in the UK and Europe.

Despite the frenetic pace of growth on this side of the Atlantic, there are numerous examples of how the US entertainment and information industry has taken to the medium. And with the Internet, every factor that favours the US has combined to fuel the enthusiasm: technology, low cost telecommunication systems and an unrivalled wealth of entertainment material that is already known the world over.

As well as FOX, CBS and NBC, the US Public Broadcasting System currently has 82 member stations with home pages on the World Wide Web; virtually all the major Hollywood production companies have very high quality Web sites for film and TV promotion; and now there's even a film on release called 'The Net'.

Here's a measure of the Web as an already established market medium for US advertisers:
Percentage of advertisements containing URLS, in the first 18 pages of the September, 1995, issue of Scientific American: 50%; Percentage of advertisements containing toll-free telephone numbers, in the first 18 pages of the same issue: 90%

Talk of Media is everywhere on the Internet. The art of grabbing and keeping the attention of both the general public and specific interest groups is becoming more scientific all the time, and the ability to communicate directly with targeted groups as well as the general public remains the prime objective of anyone with a message to deliver. Today's computer technology provides opportunities and scope not previously available.

Today's electronic media have emerged during the past twenty years in the wake of computer technologies, and owe far more to the spin-offs from space exploration than to the work of traditional print and broadcast industries. The technologies are based on just two prime methods of delivery with a lot in common: CD ROM, and on-line information systems—with current attention drawn, inevitably, to the fastest growing medium of all: the Internet.

This is also the inescapable meeting place where all the pioneers and developers are creating a growing number of services and resources aimed squarely at this new techno-media community. But the real beef in the bun is the marketing opportunity presented by closely identifiable consumers. The cash may not yet be flowing too freely just now, but the penny has dropped for many media moguls, and the race is on to provide compelling sites around the Web.

Moreover, the traditional investment community has now got its mind around the issues, and has declared that although the Internet may presently be a little disorderly, it is nevertheless the inexorable future of all 'media', and the report from the US technology speciality brokers, Hambrecht and & Quist entitled "Webbing The Information Economy" is one of the most thought provoking and essential pieces of reading for those seeking to find the business opportunities in the "new media". The report's introduction expresses the analysts' bewilderment and delight at the seemingly endless scope for development and investment:

"More than an anarchistic cobbling of computers and networks, the Internet is a mass media -- albeit in its formative stages -- on par with the telephone and printing press, and the virtual incarnation of day-to-day life including commerce, entertainment, and communities. And despite seemingly unprecedented growth, activity, and publicity to date, we believe that the Internet industry is about to get really exciting.

New Mass Media The Internet is the new mass media, delivering today what much of the multi-billion dollar cable-mania promises to deliver in the distant future, and redefining the visions and realities of computer and communications convergence."

The report by H&Q delineates how the Internet, by harnessing the existing technology, is becoming accepted seemingly overnight, and examines the capabilities, evolution, and throttling-factors that led the Internet to become the new mass media.
Investment Implications The Internet is creating a new industry to invest in, as well as altering -- and, in many cases, threatening -- the fundamental structure of existing industries. This includes not only technology industries, but also content and even not-so-obvious industries, such automotive and travel, throughout our economy. The new technology industry spawned by the Internet is expected to blossom twelvefold to $13 billion by the year 2000 and create the MCIs and Microsofts of the next decade. Two of the companies highlighted in recent investment stories - UUNET Technologies, Inc, and Netscape Communications Corporation, respectively -- are the heirs-apparent to these roles.

The Internet also materially impacts existing industries. "Ignore the Web and you're dead" is the watchword for existing technology companies.

Peculiar Dynamics The Internet has obviated seemingly all of the rules, rendering existing frameworks and concepts irrelevant -- and even hazardous -- to understanding both its direction and its impact on the industry at large. Communications costs that are independent of distance and time shatter the existing practices of the prevailing telecommunications industry, and will unleash uses that were previously restrained by economics. Accordingly, a company's pace toward, and ability to achieve, ubiquity is more important as an investment consideration than near-term profits and revenues.

It's About to Get Interesting Although Internet-related revenue and activity has been growing at triple-digit rates, expect mainstream uptake [in the US] to begin around mid-1996. This uptake will benefit the vendors, notably equipment and network service providers, already achieving sizable success, and shower windfall business on those vendors providing the technologies enabling mainstream uptake.

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