The news that more time is spent on social networks than on email should be just the kind of news that telephone companies and cable companies would like to hear. For much different reasons, Google should also. After all, social networking is at the beginning of its development and is growing more sophisticated each day.
Every day, the news gets more intriguing, making the old cliché about developments occurring in “Internet time” simply quaint. Now, the social networking is developing in “Twitter time,” the time it takes to type out your 140 characters of experience, knowledge, wisdom or nonsense. Perhaps social networking takes up so much time because there are so many outlets to use. Instead of simply checking one email address or two, someone might check those, plus a Facebook or MySpace mail, or keep up with the Twitter feeds.
With lightning speed, marketers are latching onto social media quicker than you can say, “Tweet.” Procter & Gamble, for example, is starting new training for its marketers on social media. Sites like show salesmen Zappos and Hulu are joining the party. The shoe guys want their customers to shoot video of the arrival and opening of the show boxes; TV site Hulu is adding a social networking capability, much as Joost and other sites have already done. They join the commercial pages like Target and Kmart, among others, which established pages on social networking sites. (PK has one also.)
A Nielsen study said that social networks provide for new ways for businesses to interact with customers as the use of the social media continues to rise.
Three IBM researchers tracking the phenomenon issued a report, “The changing face of communication; Social networking’s growing influence on telecom providers,” that shows the challenge to the industry ahead. The researchers, Rob van den Dam, Ekow Nelson and Zygmunt Lozinski, found that the number of unique monthly visitors to the top half-dozen social networking sites jumped 95 percent between June 2006 to June 2007, and then another 50 percent between June 2007 and June 2008.
These sites provide communications services, like the integration of MySpace and Skype, that are replacing more traditional (and we use the term loosely in this context) means. In addition, the social networking sites are gaining more capability to handle video. The study concluded the services like these “pose an operational challenge to telcos as they ‘piggyback’ on the existing communications infrastructure, imposing network capacity issues and increased costs for the network providers.” And that’s just on the wired side of the business.
What’s to be done? Here is an exploding new field online with which carriers will have to cope. The IBM researchers said the dramatic in applications that travels Over The Top (OTT) of networks “alters the equation for telecom operators and will likely force them to develop new business and revenue models,” centered on the axiom, “If you can’t beat ‘em, join ‘em,” and improve your technology.
However, some major players in the industry are taking a different tactic. Instead of the creative way out, they use more traditional telecom/cable models. And so Time Warner has conducted a trial in Beaumont, Tex., where the competition is only substandard AT&T DSL, to tie the speed of the service supplied to customers to the amount of usage they can have. Customers getting the cheapest service, a DSL-speed, can use only 5 GB per month. Customers with the “turbo” service of 10 mbps, get 40 GB per month. It’s not that the slower-speed customer doesn’t have as great a need; it is simply that Time Warner wants customers to move up in the food chain.
Similarly, AT&T is playing with bandwidth caps of varying sizes. Cox Communications, on the other hand, will decide for its customers which traffic is “time sensitive” and which isn’t.
Rather than look at a potential land of plenty, these carriers see only a land of scarcity, and they want to capitalize on it by restricting access to bandwidth by customers.
What does this mean for Google? If nothing else, it means having some company on the telephone/cable “enemies list.” If the history of telecom lobbying is any guide, any company that contributes to the generating of more traffic on the telecom networks will incur the wrath of the network operators and their Congressional minions.
For the last couple of years, Google was the target of their disaffection. No meeting with telecom officials or hearing on Capitol Hill was complete without some denunciation of Google for clogging the network tubes with obscene amounts of traffic (YouTube and otherwise) and other perceived sins against the natural order of things. Once upon a time, the big Bells had the long-distance industry to campaign against – until the long-distance industry got swallowed by the Bells. Google emerged as the successor to the old AT&T and MCI – the enemy against which the Bells (and cable) could campaign.
Facebook, MySpace, perhaps one day an enhanced Twitter, and all of those video-equipped sites will join Google in the telecom infamy of generating value and traffic while traditional telecom usage drops. Lackey members of Congress will introduce phony bills calling for the regulation of social media sites, much as they did on regulating search engines. It would be fun to see AT&T take on News Corp. AT&T Chairman Randall Stephenson vs. Rupert Murdoch would be a treat to watch.
One answer is more competition. Let innovators again have access to the telecom networks and see if their software and hardware can handle things differently. There’s lots that can be done on the same platform if the creativity of the Internet world is unleashed. Until then, it will be more usage caps and higher costs for relatively little speeds, and the stunting of social networking’s multimedia growth.