Here Comes the Videonet 1

Saul Hansell, in today’s New York Times, has an article about Yahoo!’s video programming efforts. It’s a bit of a puff-piece, given the internal turmoil that group has generated within Yahoo!, but it contains some important nuggets, particularly this one:

“Increasingly, Mr. Semel and others are finding that the long-promised convergence of television and computers is happening not by way of elaborate systems created by cable companies, but from the bottom up as video clips on the Internet become easier to use and more interesting.”

I get a lot of skepticism, even from technology enthusiasts, when I talk about the convergence of the Internet and video. People point out all the ways that TV is hard to distribute over today’s broadband and wireless networks, and all the business or regulatory challenges new entrants face in trying to replicate the businesses broadcasters and cable TV operators developed over decades.

That’s not the goal.

The Internet won’t completely replace television as we know it. Instead, it will mutate and extend it. Right now we’re seeing the long-promised “convergence” play out on two levels. Big phone companies are deploying digital platforms on fiber optic networks to compete with cable operators, who are rushing to add on-demand features in response. To me, though, that’s less interesting than the distributed, bottom-up activity around short video clips on the Net and wireless networks. One is about competition; the other is about transformation.

At some point, thanks to VOIP, most of the voice conversations we engage in across the network won’t be phone calls. (That’s at least part of what eBay/Skype is about.) Similarly, most of the video content we watch won’t be television. Those traditional forms will still be around, but they will become specialized, much like radio after the emergence of television.

This is what the incumbents can never appreciate. They are hard coded to assume that voice = phone calls and video = TV. The two great economic drivers of the communications industry, advertisers and users, will have no trouble adapting. AOL, Yahoo!, and Google, each in its own way, cracked the code for harnessing the text Internet as an advertising medium. Those companies, and perhaps others, are bound to do the same for the video Internet. Once they do, look out.