Webcasting is Too Costly to Offer for Free

Columbia University Professor of Economics & Finance Eli Noam writes at FT.com:

    “For electronic media, transmission technology is destiny: it defines cost, content and business models. The costs of TV distribution over the internet are more than 40 times greater than the distribution cost of a cable TV channel. This is because the individualisation of the internet requires significantly larger transmission resources than simultaneous broadcast-style transmission. Hence internet TV can function economically only as a premium medium.”

Noam, who’s also director of his university’s Institute for Tele-Information, thinks the following are the most likely streaming video applications:

    1. Video on demand (VOD) delivery of films, at the very top of the distribution chain, right after movie theatre distribution and maybe even ahead.
    2.Thin and specialised audiences that would not be served by synchronous TV.
    3.Office viewing.
    4. Interactive and multimedia applications that use the medium in ways that cannot be done over regular, one-way TV.

We believe that Noam is right. And, because Webcasting is limited neither by distance nor by national borders, his FT article also predicts American cultural hegemony over these four applications worldwide.

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