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Monday, July 22, 2002

The Internet Is A One Way Trip

While the corporate media world is having second, and probably third, thoughts about the advisability of the transition to the internet, the US online world just grows and grows. As many old style media outfits enter denial and relish an imagined return to the good old days, some analysts have been busy cautioning that the Internet's capacity to change the rules ought not to be discounted too quickly. As the New York Times puts it investors may have repudiated the Internet, but consumers have not.

"The Internet may not be doing so great on Wall Street, but it's doing great on Main Street," said Marshall Cohen, senior vice president for research at America Online. "As far as the people who are online, they're using it more and valuing it more." For consumers, that may be a good thing. But for media companies looking to the Internet for profits, it remains a frustrating reality. The "digital revolution" that many traditional media executives were convinced would topple them or make them rich has not materialized.

In part, that is because the Internet has turned out to be more of a souped-up telephone than a delivery vehicle for media and entertainment. E-mail messaging is by far the medium's most popular feature. But with 61 percent of American adults using the Internet, up from 46 percent two years ago, analysts and media executives say the medium is beginning to change consumer expectations of what mainstream culture should offer. Consumers who were once content to sit back and absorb what was beamed at them are demanding more control over how and when they consume movies, television, newspapers and music.

And whether it turns a profit or not, media companies are being forced to respond. Some of the Internet's effects on media, like the growing number of multitaskers, are subtle — although not so subtle for advertisers, who might be interested to know whether the eyeballs they are buying are simultaneously trained on two screens. Others, like the online file-swapping that the recording industry holds responsible for a chunk of the 10 percent decline in CD sales in America last year, are more extreme. But perhaps the most far-reaching impact lies in the rhythms and habits formed by daily use of the Web's interactive features. "We see young people who are flowing between TV and the Web almost seamlessly, finding new ways of getting what they want, going to what they want when they want it," said Betsy Frank, executive vice president for research and planning at MTV Networks. "That's what the Web has taught them — you don't have to sit around for something you're not interested in."
Source: New York Times

So while AOL TIme Warner have been busy pressuring Robert W. Pittman, their chief operating officer and the most visible remnant of America Online's culture, to resign (and at the same time elevating a Time Warner executive to oversee the online division thus signaling that the Internet is no longer the focus of its plans), more and more Americans are incorporating internet as a key feature in their daily lives. The Pew Internet Project found that 66 million people use the Internet on a typical day. Eleven million Americans said the Internet played an important role in choosing a school or college, 8 million said their use of the Internet helped them through a job transition and 8 million said the Internet played a role in finding a place to live. These numbers may still seem small. The point is they are growing. And if Time Warner & company cannot see how to make the internet work for them, then the failure is not with the internet, nor is it with the Americans who use it. As I said at the begining, the internet is a one way ticket, there is no going back.

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