Why havent they done this ?

Sometimes I wish i could just sit down and chill. But I cant. Unless my daughter and wife are around, I wont even
try. My wife would tell you that even then…

Its just not my style.

So every day I work, read and wonder. What about this. What about that.

Here are some of the things Im curious why no one has tried yet.

1. Why dont newspapers offer PPC for display ads ?

I dont know what the marginal cost to print a page of a newspaper is. I dont know if it varies by section of the paper
or even if there is a variable cost based on who is writing on those pages.

I dont know how that translates into CPM. My best guess is that there is a nice little arbitrage between the cost per
additional page and doing PPC display ads.

Why not allow advertisers to automate the placement of display ads ?

Why not just let me upload my pdf or gif file that i want to place as my ad ?

Why not include a system generated and monitored URL that can track page views of that URL (the equivalent of a
clicked through page)

Why not charge me based on the number of page views ?

Why not rank positions on the page, just like Search engines do, and make me bid higher to get the better
position.

Why not let me bid the same way for size of ad. The higher I bid per page view relative to other bidders, and as long
as its above the set minimum, why not size and position my ad accordingly ?

Why not let me bid differently for different sections of the newspaper. Sports, Entertainment, Section A, B,
etc.

Of course, all the above could apply to the ads appearing on the paper website as well

Advertisers would have a choice. They could lock in their positioning and pricing, just like they do now. Or, they
could take the PP Page View route and only pay for the traffic generated to their websites. (which could end up costing
more in many cases).

The model could also be enhanced to direct traffic to a virtual phone number for the company. Create an extension on
the advertisers current phone system, or a unique number that is routed to the company that can be tracked and audited
. The advertiser would then pay per call.

There would be minimum bids. There would be a reserve amount per page. If enough ads at the right price were not
received, the page wouldnt be printed. The offering could enable different ads and pricing based on where in the paper
it would be printed.

Of course the ads could also appear on the company website as part of the program or offered seperately.

Its basically PPC for the newspaper world.

What makes it particularly interesting to me is that its the right product at the right time. Search engines are
working hard to localize their search . By definition, the local newspaper is just that. Local. So newspapers could
actually take a quick step ahead of the online world.

Local. Graphical.

And you are reaching consumers where online cant… At least I know a newspaper is far more prevalent where i read
it in the morning than my PC or Sidekick.

Maybe its a stupid idea. I dont know. But it sure seams like it should and would work with a little elbow grease
behind it.

Here is my 2nd idea

Again geared towards the topic of local. Why dont cable and telcos differentiate between local bandwidth and internet
bandwidth.

Bandwidth is far more cheap and available on a private network than it is on a public network.

In my house, my wireless hums at 54mbs. My wired hums at 100 and it would be cheap to upgrade to 1gbs

On the cable and telco networks, the same thing happens. Inside the nodes in every neighborhood, the amount of
bandwidth , particularly in the newer installed networks is huge.

The amount of bandwidth available becomes constrained when networks link to the outside nets and the internet.

With the cost of 1gbs and even 10gbs networking equipment haven fallen so far, its not inconceivable that a
minimum of 100mbs could be offered per home for local for local network access.

In other words, there is nothing that should prevent 2 houses on the same network on the same street from being
able to communicate at 100mbs or more. And there is no reason to stop at houses on the same street. It could be a
neighborhood, town, city, just depending on how the network is designed and configured.

Which leads to the business opportunity.

Why dont the cable and telco providers, as their nets go IP or lay Fiber, add a free or low
cost premium . on network tier of service ?. Call it Your Town Service. 200mbs up and downstream for any
traffic that stays on the local network.

If you want to send the kids home videos that you just captured on your brand new High Def HDV camera and its 10gbs in
size. So what. If grandma subscribes to the same service provider and lives in the network you are part of, she gets it
in a couple minutes.

With that kind of bandwidth and more, all kind of interesting things start to happen. Is the local hospital or your
doctors office on the network ? If it is, then just sit in front of your high resolution webcam and let him take a look
at how that rash is doing…

Of course you would hook up all the schools. Any number of applications come to mind there. Security. Monitoring
classes when sick (sorry kids). Parent teacher conferencing.

Want to produce a neighborhood tv channel that you stream to just the neighborhood ? NO problem. As long as you all
subscribe to the same provider

Local retailers could use webcams to take orders, ask questions, show merchandise. It would give the local merchants
in the area an advantage over the big boys. Which of course would cause the big boys to have locations on the network
in order to compete and participate.

There in lies the opportunity. This is MCI’s friends and family all over again. Its what the wireless
companies are doing with phone service. If you call people on their network there are unlimited minutes. No long
distance charges

So why arent the cable and telcos doing the same thing ?

Why not offer 200mbs network (not internet) , growing to 1gbs service over time , between any local nodes on your
network for an extra 5 bucks per month ? Or even as part of your current pricing ?

If you want 200mbs, the person, place or thing you want to communicate with has to subscribe to the same service and
be on the same network. Think maybe the first network to do this would cause a huge rush for people to
make sure they are on the same network ?
THink i wouldnt make sure im subscribed to whatever network my
daughters school is on ? or that my doctor or local hospital is on ?

Think kids wanting to play online games against their buddies wont jump all over this to play at breakneck speeds
?

Internet access would work the same way it always has. Access to the outside internet, would still be at the
1,3,5,10mbs levels of service currently offered.

The first provider to offer this would create a first come, first serve subscriber rush. Just like it was in
long distance and cellphones.

Who ever introduces this first wins.

It would be such an easy sell. Go to the local school, doctors, hospital, employers. Tell them that if they buy
internet access from you, you will give them free 200mbs on network service. Watch how fast they require locals they
communicate regularly with to subscribe to your service.

200mbs plus on network connectivity for next to nothing. Simple to do on a well designed network. Easy money.

Why hasnt it been offered ?

I look forward to reading the comments

59 thoughts on “Why havent they done this ?

  1. that is really an interesting idea you wonder.

    Comment by Echo -

  2. Higher speeds, like SBC’s Lightspeed 25 meg down, require running fiber to the neighborhood at a few hundred dollars a home. Running fiber all the way home, like Verizon’s FIOS and NTT, costs something like a thousand per.

    Comment by runescape money -

  3. The search king, which makes 99 percent of its revenue from Internet ads, is quietly testing the waters of print advertising sales, according to executives at several companies that have bought the ads.

    Comment by wow powerleveling -

  4. very good!!

    Comment by 11nong -

  5. In regards to local networking I have pondered this myself for sometime. It may not make sense for someone like cablevision to uncap speed to the net because they lease the backbone access from someone like level 3, but the last mile wiring is owned by cablevision and is not being used at full capacity, so they might as well uncap network speeds within the cablevision network since it does not change their cost.

    Comment by BG -

  6. CIPPlanner Corporation is the leader in web-based enterprise class software for government agencies to manage their entire capital improvement and maintenance programs from planning to implementation.

    Comment by Wayne Sheih -

  7. I was pointed here after I made a similar network suggestion over in the comments at http://www.freedom-to-tinker.com/?p=917

    I had a slightly different take on the benefits, though. Techspeak? Applications running on many machines on the local network could detect the difference between near and far (low and high cost), and then co-ordinate their activities to leverage shared goals (think like BitTorrent). End result? TV program distribution is CHEAP! If 100 machines each take 1/100th of the program over the expensive link and then share on the free link, the distributor (and the local ISP!) have just cut their bandwidth costs by a factor of 100. They start to see 20kb/s per channel. Radio stations can “broadcast” at this level for 1500 bits/sec per listener for close to FM quality. AM radio quality can be had for about 300 bits/sec per user.

    This is basically the old Multicast backbone (Mbone; e.g. http://www.savetz.com/mbone/ ) but organized from the edges inward. Any freely distributed material can likely be leveraged automatically, with zero effort on the part of the distributor. Targeted distribution (“pay services”) needs to create a common high-bandwidth load and a targeted low-bandwidth load, and then they will benefit as well.

    The local community aspects will be valuable in the longer term, but they require people to change their habits. Changing the underlying operations to more efficiently provide the services the users want will provide a faster return and benefits.

    Comment by Chris Smith -

  8. To put it simply, I feel like the cable companies and phone companies still don’t know what they want to be when they grow up and are extremely reluctant to think beyond basic programming options. It wasn’t that long ago that a popular phone company decided to provide an unlimited long distance option that wouldn’t break the bank. *coughqwestcough*.

    Until they stop being scared of their own shadows, I think you’ll see this same “hands-over-face-la-la-la-la I can’t hear you” outlook these companies seem to take when subscribers want new and better services.

    Comment by Tor -

  9. A standard logo/code, a la barcode, in every old media add, with an easy interface app on a cell phone could provide at least a sample population on whom the add is impacting (response won’t be as high as an easy to click online add, but at least there will be a sample)

    Comment by Ricardo D -

  10. I worked at Yahoo! in their business development. Those are very interesting concepts, especially the paper concepts. I wonder if that what google was playing with when they were doing national advertising in magazines

    Comment by Bradley Twohig -

  11. Newspapers, while slow to catch on, have websites, so the idea that newspapers don’t get it is a little off base.

    The big problem newspapers face is the difference between print and online economics. Print CPMs are 10-15 times more than online CPMs. How do you pay for the website and continue to send the paper to those who want it? You can’t just tell the print readers to take a hike. 4 in 10 americans read a print newspaper on a daily basis. See the PEW report on media consumption trends.

    Throw in the uncertainty surrounding news on mobile devices, what that demand is now, and what it will be in 2 years and you begin to confront the complex issues newspaper publishers are facing. Terabytes have been dedicated to these issues and I have yet to see any “obvious” solutions to the real problems surrounding migrating high fixed cost print to online in any kind of profitable way. Newspaper publishers are certainly guilty of being greedy in the past and not investing in their futures, but that doesn’t mean they should start workin’ for free.

    Interesting blogsite. Thanks

    Comment by Will -

  12. We’ll name the IPO CGM …..Cuban gone mad.😉

    Seriously,You have professional sport team(s) MOvie Theatres,HDTV, Way above average Technical *savvy*and plenty of dough. In my opinon you haven’t touched 99% of what you could originate combining services of those, but you want to put a url on a newspaper ad. shaking my head walking away disbelief.😉

    Comment by Ron Des Laurier -

  13. Why do I have to pay the same amount for tv every month as a guy who watches 10 times what I watch. Should it not be pay for what you watch? Should be easy enough.

    Comment by Jason davis -

  14. The idea of local connectivity is an interesting one however I have trouble seeing it as a viable business model. The more traffic you encourage on your network the more it will cost you to operate the network. I’m sure there are a million ways to explain this so I will give a simple one and leave it up to you or someone else to come up with other/better example. Let’s say I now can send video files to my mom because we are in the same neighborhood, on the same node, and I have the bandwidth to do so. So now I send something every night, but on Thursday I have a problem and have to call tech support. Now this is a call that I wouldn’t have made if this extra bandwidth wasn’t available to me. That call just cost my isp money to have to deal with me. Money that they wouldn’t have had to spend if this extra bandwidth wasn’t available.

    However I do see a competitive advantage similar to what is going on in the cell phone industry. I purchased so and so’s cell phone service because all of my friends/family are on it and it doesn’t cost me anything to talk to them. I couldn’t do that if I chose another provider. It could be the same for data services.

    I have read a few other comments that have mentioned wireless as a way to facilitate this idea. I didn’t see any clear ideas on how it would work so I would like to propose one……
    Create a community built and supported network that would allow anyone to join and leave the network at any time without impacting the overall functionality of the network. This could be accomplished through wireless and wired technologies available today. What I am describing is a mesh based network that would/could cover the entire city.

    There would be five main parts to making this a successful undertaking:
    1. Make it simple and cheap to add a node
    2. Have somewhere people could go for help
    3. Setup a critical mass of nodes to ensure that everyone can participate
    4. Provide a minimal amount of bandwidth to the internet
    5. Don’t limit your connectivity options

    Let me explain a little further….

    1. Make it simple and cheap to add a node
    There are several mesh based open source projects that let you take an older pc and use a boot cd to run software required to add a node to the network. Most geeks I know have more than a few of these kinds of machines sitting around their houses and it would please their spouse to see them go. Plus there could be a place where people could donate these machines to be put to good use.

    2. Have somewhere people could go for help
    No matter how simple you make something there are always going to be people who need help. This could be solved in several ways.
    -Make pre-configured nodes that the folks could take home and just have to turn them on to get them working.
    -Have a community organization put together to answer questions and be an active resource.
    -Assemble an online knowledge-base and community to also answer questions and be an active resource.

    3. Setup a critical mass of nodes to ensure that everyone can participate
    One of the big problems with the mesh networking concepts is also one of its great strengths. The ability for nodes to be added and removed at any time without the operator of the node having to do anything besides turn it off or on. This is great because all you have to do to extend the size of the network is turn on a node and make sure it can see another node. However if it can not see a node then it will not be able to join the network. Since everything is so dynamic there is no way to know that you will be able to connect unless there is a critical mass of nodes available and removing one means you can still see another one. Then the mesh software just reroutes you through the one that remains. This can be solved by having a “backbone” of well known and supported nodes that can see and connect to each other.

    4. Provide a minimal amount of bandwidth to the internet
    Now ideally everyone on the network would donate some amount of their internet connectivity to the rest of the network and the mesh software would be able to shape it so that everyone on the network would be able to get the best connection. More than likely for non local traffic (internet connectivity) there would be need to be several decent sized pipes to provide a guaranteed minimum of bandwidth available.

    5. Don’t limit your connectivity options
    In very simple terms this means build the network so that any type of medium can connect to it. I would say someone should be able to connect to the network with wi-fi and ethernet at a bar minimum. It would be great if other technologies could take advantage of this as well including cellular networks, and other wire based technologies.

    The ability to do this would open up numerous possibilities. My favorite is the ability to easily bring broadband into underprivileged and under-served markets and neighborhoods that traditional ISP’s can’t or won’t reach. Also I like the idea of being able to connect to my house from my office at speeds well above what the internet now offers. I could go on but if you’ve read this far I’m sure you get my point. If you are interested in this concept and would like to discuss it with me further please email me at dlivingston at zanzeta.com.

    Comment by Dave Livingston -

  15. Mark,

    It seems that the Geek somewhat addressed this already, but I believe Google may have something in the works for community wireless. Here’s an article that details the situation further: http://news.com.com/Google+in+San+Francisco+Wireless+overlord/2100-1039_3-5886968.html
    Spokespeople for Google have reported that they are not interested in expanding this project outside of SF and Mountain View, CA, but I suspect that it will go forward if it is successful.

    James Cardis
    Chicago, IL

    Comment by James Cardis -

  16. With Google getting ready to launch wireless in San Francisco, the community network wouldn’t be such a bad idea, and may be workable. I like the idea.

    Comment by TheGeek -

  17. take a look at most newspapers layout and it is clear to see the move towards online. The Star Tribune in Minneapolis just redesigned thier pagination and it looks like a Typepad blog… complete with the sections titled things like Star Tribune local+news…. Star Tribune + business, it even is invoking the domain tiered organizational structure.

    Most Newspapers realize that Print drives online, unfortunately for them the opposite is not true. They know this thats why they charge so much, you price display ads just like petroleum reserves in the ground. Deep in the bowels of every print media is a date for when they have to be all interactive driven content. They are just milking the cow till she quits giving milk.

    The only true solution is cell phone contract business model, where the cost of subscription subsidizes E-paper for the customers, then everymorning the sync their e-paper and roll it up and head out. The e-paper syncs with a cell phone/computer for deeper info and the sales cycle continues from there.

    Comment by ryan libson -

  18. I would be afraid of any ISP marking a distinction between local traffic and long distance traffic for fear of having to pay larger rates based on the distance of the server you are communicating with. Eventually when they decide they need to add revenue that would always be at least an option even if it seems absurd now.

    Comment by Jon -

  19. As an FYI: The newspaper/publishing group that I toil for does offer our display advertisers the ability to upload “final” pdf art for print advertising *and* book their own spots on a first-come-first served basis with pricing determined by a “sliding” contract rate that takes into account the “quality” of the position that the advertiser selects. Email status reports are automatically sent as the ad proceeds through the proofing and prefelight stages.

    The advertisers in some markets adore it – at one of our papers, almost 90% of the ad content comes in this form. Other markets dont want anything to do with it, and still need the “security blanket” of a sales rep.

    The upshot? The tools are there, but the advertisers need to demand it.

    Cheers,
    M

    Comment by Mark Hornblower -

  20. The neighbourhood network concept is very do-able with appropriate network design and routing. I have worked extensively on a number of community networks in British Columbia that plan to do just that – offer on-net and off-net traffic plans.

    The comments from folks before me are mainly correct. The limitation is in the last-mile connection to the homes and businesses. The work we have done indicates that the only viable solution is to build fibre to the user (FTTU) as it can handle multiple services and can thus generate more revenue than other solutions.

    Once you accept you are building FTTU then bandwidth becomes a minor issue compared with network management. How do you create an open-access network with multiple service providers providing multiple services while having billing and security systems to tie it all together?

    We researched this extensively and have found a solution that performs all of the bandwidth management and allows the type of on-net and off-net traffic management the article suggests. This equipment is deployed in a number of open access networks in Europe and other countiries outside of North America. The company is PacketFront and their website is http://www.packetfront.com/ (I have no affiliation to them other than I have purchased their equipment.)

    One of the interesting issues that arises when you pursue the concept of larger and larger amounts of bandwidth at lower and lower prices is the Paradox of the Best Network. The paradox is that as the amount of bandwidth increases the value of a packet drops until you reach a point where data has little value and the networks cannot pay for themselves. The website http://netparadox.com provides more on this concept.

    The approach we are taking is that FTTU networks should be part of the civic infrastructure like a water system and the roads. This approach allows the network to be built and shared as an essential piece fo infrastructure rather than being limited by the ability of for-profit companies to construct networks.

    In the end the current telecom companies will sell services over publically owned networks and we will all enjoy the benefits of bandwidth.

    Comment by Jeff Roberts -

  21. On idea #2:

    There is a multi-city, fiber optic network being built in Utah called Utopia (http://www.utopianet.org/). They will operate pretty similarly to your second idea — they’ll only do wholesale, with pretty loose restrictions on who can become a reseller. Resellers can then set up their own ultra-high-speed virtual network for use by their customers. Resellers can connect their virtual network to an ISP, or simply use the network locally. Undoubtedly several ISP’s will offer internet service over the network, but it will be interesting to see what local applications come up.

    Comment by Richard Miller -

  22. Oh, and I enjoyed your rant about the newspapers. It’s like the saying that goes: had the railroads understood that they were in the transportation business, we would now be flying Burlington Northern Airlines. Same thing — the newspapers don’t see themselves as being the communications business.

    Back in the early 1980s when we put the first newspapers online at CompuServe (The Columbus Dispatch was first, thank you), the printers’ union at one of the papers went nuts, believing their jobs where in immediate jeopardy. They were right, if a bit premature. But the economic issue is not about raw CPM (e.g. number of subscribers), it’s about communications efficiency. Once we get to the tipping point where advertisers feel the online world is a more efficient medium for reaching their prospective customers, newspapers are dead. DVRs are wounding commercial TV as we speak. Newspapers aren’t far behind.

    Comment by Paul Lambert -

  23. Like the telephone system, IP networks are engineered on the premise that not every user is blasting at full bandwidth all the time to/from the most distant point on the network. This allows the network to be designed so that the aggregate amount of traffic that can be handled at each deeper level of the network is less than the total possible load from the level above.

    Another network usage phenomenon is that more bandwidth attracts more demand. When dialup network access was at 300 baud, you didn’t even think about sending things like GIF files from one person to another. As dialup network speeds got faster and faster, people began to do DIFFERENT things. It’s not like a user with a 56Kbps modem just sends the same kind of text stuff he did at 300bps, except 150x faster. At 56Kbps there are new things you can do, like maybe stream audio. The usage profile also changes. Think of the difference in utilization intensity for a text chat session vs a streaming video clip. Multiply that by many thousands or millions of users, and the network capacity required explodes.

    I’m not saying this is a bad thing — it just has to be taken into consideration when building a business model. Said another way, if you increase the capacity of your access network 100x, the amount of capacity you need to add to the network core might be 1000x, or 10000x, because the 100x lift in access bandwidth will enable new uses that change the usage profile.

    I like your idea for the neighborhood networks because it enables interesting local applications without crushing the network core. The question is whether any of the network operators are using technology that allows one level of throughput between users near each other topologically, but a different level of throughput when the users are more distant. Right now they use an approach that limits subscriber throughput at the access device, regardless of how far away the other end of the connection might be.

    Civil engineers see this phenomenon with freeways. For example, if you add more lanes to I-635 around Dallas, it won’t necessarily help congestion at all. That’s because there are folks who previously used surface streets to go a few miles but will note that the freeway has become less congested, and will therefore decide the fastest way to take their short trip is to jump on the freeway. As more people move from surface streets to the freeway, the freeway just gets congested again. So the engineers use metering lights to constrain the number of cars that can get on the freeway, without any distinction between drivers going 5 miles or 50 miles (if everyone went 5 miles there would be less congestion than if everyone was going 50 miles, because in the latter case there ends up being more cars on the freeway at the same time).

    What you want to do is like having one on-ramp for local traffic, and another for those going longer distances. Freeway designers do this, by having local and express lanes with not every on/off ramp having access to the express lanes and visa versa.

    There is technology that can do this. The challenge is developing a pricing scheme that makes sense for the consumer and makes a profit for the network operator. It can be done.

    Comment by Paul Lambert -

  24. Regarding free ‘local’ bandwidth, we have been doing this for years at the ISP I founded. Initially we offered highly discounted “on-net” bandwidth but in the past 18 months we have moved to free.

    We are offering higher capacity connections via fixed wireless (pre-WiMAX as well as higher throughput gear…up to multi-gig).

    Dorian
    MetroBridge Networks

    Comment by Dorian Banks -

  25. MILTON (Microwave Light Organized Network), can have as many as 32 focused beam “petals”, each delivering some 50 Mbps, providing WiMax on the unlicensed 5.8 GHz band.

    India’s Center for Development of Telematics (C-DoT) and Canada’s Communication Research Center have signed an agreement to develop MILTON for cheap, fast, last-mile access and will deploy it in New Delhi.

    Comment by Sam Churchill -

  26. Google has the best opportunity to bridge PPC into the offline print space…In fact they’re already testing it…kyle
    Link to the story here:
    http://news.com.com/Google+takes+ad+sales+to+print/2100-1024_3-5844889.html

    Google is expanding its lucrative Internet advertising network into the print world in a bold attempt to capture traditional ad dollars.

    The search king, which makes 99 percent of its revenue from Internet ads, is quietly testing the waters of print advertising sales, according to executives at several companies that have bought the ads. Google recently began buying ad pages in technology magazines, including PC Magazine and Maximum PC, and reselling those pages–cut into quarters or fifths–to small advertisers that already belong to its online ad network, dubbed AdWords.

    Comment by Kyle Bumgardner -

  27. Community networks sound reasonable. I’ll research the possibilities. Regarding the community network -I would lean towards going wireless and keeping it encrypted. Running cable is like taking a train – You can do it, but it’s easier to go through the air.

    Comment by Ben Adams -

  28. The traditional newspapers don’t think like you, Mark. You’re entrepreneurial and they’re not. Most established newspapers are old and they’re set in their ways. It will take a new start-up newspaper to lead the way and be successful at different advertising methods before the dinosaurs follow suit.

    Comment by Tino Buntic -

  29. I’m working in a global telecom company and although an interesting idea, I see two problems.

    1) Security. Several telco’s already provide private networks to customers, usually large corporations, and are paying huge bucks for them. The selling point is not the speed but the security. It would be difficult to sell this service to anyone if you do not allow them to access the public network. How big can your private network be? What if you do not desire people who are ‘in network’ to be able to access your files? This will take constant updating of firewalls and security to enable this.

    2) Infrastructure. As many has mentioned, it will be difficult to upgrade houses to be able to support over 45mbps which is the speed cable is able to support. Currently, in Japan they are offering fiber services to houses and apt. in metropolitan areas. People have been playing with the idea of BPL (broadband over power lines) however I was not able to see the speed that this would support.

    Comment by K.L. Har -

  30. I was a part of a local network like this using a campus network in college. All the computers on the network could share with eachother with large bandwith. After I organized people a little bit it was great, sharing MP3’s, video’s, and whatever anyone else wanted.
    However, due to many issues already mentioned by others current providers cannot get into this. I believe when cell providers expand enough to provide on their networks that new competition and change in infrastructure will create huge change in the whole dynamics of the industry.

    P.S. – if you have not already done this give your players access to game video and cuts and any archived fottage through a local wireless network in your facilities via laptop. Coaches can create pre-made cuts for them to watch.

    Comment by Lucas -

  31. I thought you might find this interesting Mark.

    http://filmforce.ign.com/articles/657/657986p1.html

    Comment by Brett -

  32. I thought your idea about reworking newspaper ads to be modeled after googles internet ads is an interesting idea, but raises an interesting question. If, during a political debate, someone wants to run an ad for the pro-stapler use party. Another group of people dont like staplers and want dont want a pro-stapler ad run. Everyone knows the anti-stapler, or as they like to be refurred, pro-metal conservationalist, have much better funding then the pro-staplers. So they use their financial muscle to push the desenting opinions out of the public forum. What are the legal and social implications of this?

    I dont think this is as big of an issue for a google based ad simply because ads expire, are fluid, and the lower bidder still gets display right beneath the high bidder in the listings. Due to the newspapers static nature this has the ability to cause many problems.

    Comment by Luke Duncan -

  33. Mr. Cuban,

    Connecting a remote site of ours to our main office at 100Mbps was quoted at 5K a month from the cable company. Or we can stick with $350/mo for the point to point T1. (1.5Mbps)..

    The cable companies can already offer and handle the bandwidth but they have a lock on the market because their infrastructure is built. Until there is a competitor, why should they do the logical thing.

    Comment by PSC -

  34. Funny, I actually called a local wireless internet provider and asked them if this was something they could do for our business. They were intrigued by the idea, letting us use their network they’ve already built. I was eventually referred to the owner of the company and we spoke for awhile, he told me he’d think on it and talk with his network guy and get back with me. That was months ago………

    Personally I think it would be great, not just for home use, but for business’ as well. It would greatly reduce our cost for sure!

    Comment by Corey -

  35. The reason why is if your on a fixed retirment budget and you are trying to get a business going the news stations are not interested in you. They are only interested in people who are famous and can pay them big bucks to get the word out to the people who can will buy their products because of the advertising. I have a lot of ideas to make money but no money to do the advertising yet.

    Comment by Billy Taylor -

  36. Dave Burstein covers the developments in this area very well.

    Cable operators have the lowest cost path to symmetric service right now but at current equipment costs there may not be a market for it today.

    I think the costs for cable to offer symmetric services are likely to drop quickly enabling more of a market and driving telcos to do more fiber upgrades.

    I think you’re right that there is the potential for creating many new and more efficient value exchanges with high speed networks, both asymmetric and symmetric. We’ve already seen some phenomenal restructuring of our economy with the relatively underdeveloped network that’s in place today. It’s really impressive to imagine what is possible with pervasive high speed networking.

    Smart leadership in companies and governments around the world have seen that and are driving hard to create the network for those new markets. Hopefully we’ll see that kind of pace of development here in the US.

    Comment by MikeM -

  37. Mark,
    I love the idea of from your 2nd thought. I own Prattville Technologies, INC. We are an Alabama based technology service provider. I have 2 offices that could use that speed. We could also get our clients on it that we provide remote service to. We could really use it for our daycare centers that we installed IP networks cams at. Parents can view the kids at a better speed if all were on the network. Great idea, that’s why you are a billionaire! Hope to be there one day myself.

    Comment by Matt Taylor -

  38. Great idea about the network, it seems like a no brainer. The ppc idea…ah its alright. The most important thing though is the MAVS 1st preseason win…yea preseason doesnt count for much, but I was impressed with our 3pt shooting 1-1. The lil general must really be making some changes. GO MAVS

    Comment by Matt -

  39. Mark

    You’re brilliant, fascinating, and I look forward to interviewing you one day. But on this one, you just have the technology wrong. Raw bandwidth is cheap, but the wires into your home can’t carry it. The physical network into your house, unless it’s fiber, can’t support those data rates.

    Typical phone lines max out at 10-15 meg. The maximum demonstrated is 100 meg symmetric, over a short, clean loop of 600 feet of phone wire. At more typical distances of about 3,000 feet, you get about 20 meg down, 1 meg up; three quarters of American homes are further than that. Higher speeds, like SBC’s Lightspeed 25 meg down, require running fiber to the neighborhood at a few hundred dollars a home. Running fiber all the way home, like Verizon’s FIOS and NTT, costs something like a thousand per. Running fiber close (under 500 feet or to the basement) is the German and Korean strategy now, giving 50 meg or so.

    Cable also has bandwidth limits. About 300 homes share today’s 38 meg cable loop. DOCSIS 3.0 in a year or two will be at least 160/120 shared where installed, also at a cost of a few hundred per home. It will probably be advertised as “50 meg”, but with heavy usage won’t hit that at all. Cisco’s John Chapman outlined a path to 1 gig – again, shared – but Cablelabs didn’t bite yet.

    In all these cases, the actual cost of bandwidth is a very small factor. Today, the 3 meg or whatever you get costs a dollar or two of the $30 or $40 you typically pay for broadband. Amazingly, that goes up very little at the carriers, like KT or Yahoo BB in Japan, that now are selling 50 meg service. Usage doesn’t go up that much – you don’t get more email because your connection is faster, and you even run out of music to download. 30,000 songs, 100 gig, enough for most people, is only about $15 at carrier transit rates.

    Video, especially HD, will change a lot. But bandwidth costs go down with Moore’s Law.

    Dave Burstein
    Editor, DSL Prime
    Chief Researcher, Futureoftv.net

    p.s. Mark – touch base freely. I’m writing a lot about this stuff.

    Comment by Dave Burstein, -

  40. If you fund me the money to do it? I will be the first to do it and we both win🙂 I think it is a great idea to have local High Speed Access for friends and family. The problem that most people have is lack of vision. They are all stuck in the same everyday rut of thinking the way they always think. Then they wonder why people like yourself think differently and get all the money. They have no Faith. So, contact me when you are ready to fund our new vision🙂

    Comment by Michael Lopez -

  41. I used to live in a huge apartment building in Sofia where all wired apartments were connected in a LAN with free internal high-speed traffic. There are countless companies, including cable operators, offering this sort of service and connecting entire neighborhoods into high-speed networks. Fast movie, music and games sharing was the killer app.

    Comment by ilya -

  42. In regards to “Why dont the cable and telco providers add a free or low cost premium on network tier of service ?. Call it Your Town Service. 200mbs up and downstream for any traffic that stays on the local network…”

    I like the idea a lot.

    I suspect that many ISPs are setup to limit the Internet connection speed from the CO to the demarc at your house (so changes would need to happen).

    Also, I’m not sure the ISPs are confident (or aware?) that there is a business model to connect to a few local friends with high speed connections as opposed to _very_ popular sites that are usually located in remote places (and potentially on another network).

    Comment by nolan -

  43. Mark,

    An auction system for newspaper ads would work well for remnant inventory for large newspaper holding companies with many papers. I think it would work very well for small businesses as a way to attract small businesses to bid and buy ads they would not normally go for. On the flip side, getting newspapers to agree and do it is not a fun thing and there would always need to be a minimum bid amount in order to ensure the paper breaks even on the space. Overall, it can’t hurt though I don’t see it being implemented in scale for at least a few years

    Ideas 2)It would be a cool feature though I dont think it would have much pickup, as a value ad for choosing company X over company Y in the local market, it could be a great sales tool though.

    Cheers

    Richie Hecker
    AIM: Holdon2seconds

    Comment by Richie Hecker -

  44. Actually, pay for performance print ads is nothing new. I’ve seen companies like eStara (www.estara.com) selling this to print directory publishers for years. Also, Google announced over the summer that they’d begin buying print display ads and reselling them to their pay-per-click advertisers. I bet you they’ll be tracking that too.

    Comment by Dan Cart -

  45. In response both to Mark’s post and Steve Y’s comment:

    The technology for a measurement system even better than PPC already exists and would work just about as well in print as it would online.

    It’s just being used in industries other than news/advertising and is antithetical to traditional media business models.

    Comment by Mike Orren -

  46. I 100% agree with you about the local network idea. I have been wondering this myself. I live on Vancouver Island just north of Seattle. We have Shaw cable a major player in the cable/broadband market in Canada.

    Cable has enormous amounts of bandwidth and it would be a simple amazing to be able to send large files to my brother down the street or to my friends and family.

    My question is what is stopping them from already doing this? They have the infrastructure but I guess they would have to reconfigure the modem caps and them cap the bandwidth to the outside world. Capping when it has already left the modem is probably the issue.

    Comment by Justin -

  47. Local Internet would require some fairly massive infrastructure changes on the part of the cable companies (fiber to a fraction of the neighborhood and fiber to the building) – that’s some serious capital expenditures on equipment that in many cases is not significantly depreciated. Hello, wrath-of-the-beancounters!

    You’d most likely have to have the subnet-based rate limiting rules in the cable modem itself, which would require replacing those as well (in theory you could do it in the routers, but that’s some serious CPU overhead if you can’t do it in hardware – more CapEx). This brings up the fact that cable modems are supposed to be programmed by the cable company, but this has been… worked around. So you’ll have edge cases where certain individuals overcome these bandwidth restrictions entirely and people of this type are, shall we say, the most likely to abuse this to an extreme degree. Maybe they’ll be caught and maybe not, but the network engineering quality of most cable ISPs that I’ve looked into (granted it’s been a few years) has been crap.

    Comment by Erik Carlseen -

  48. Check this out, the average age of newspaper reader is 55………..http://www.startribune.com/stories/535/5661998.html

    Not the best way to reach people

    Comment by Stephen J. Coppler -

  49. Not too sure on the newspaper questions, but generally print media is from the Hollywood school of change is bad, the current system proves effective so why change? just look at the slow uptake of online content by print media companies.

    As far as the network bandwidth goes, I know a bit about this so i’ll try and answer:

    The last mile is generally the most expensive part of the network to upgrade, the best idea so far is to just increase the frequency being transferred across the copper wires. But theres a limit to that, ADSL2+ is the fastest currently available transfer speed that’s commercially viable and the maximum upstream is about 2Mbps.

    http://www.internode.on.net/adsl2/graph/index.htm shows a graph of DSL speeds but that assumes that the copper cable is in good condition, most haven’t been replaced in years.

    Symmetric connections would be needed for what you’re speaking about, that means last mile fiber optics; way too expensive.

    I doubt highspeed symmetric connections would be welcomed by the big carriers (Level3/Cogent/etc).

    Comment by Adam -

  50. Hi Mark, in the Czech Republic where I live became your second idea real. Particulary in my town with many appartment buildings, therefore a high density of people where many are connected to the Internet, has a high speed local network worked for more than two years. The only limit on speed is based on customer’s network card and it’s speed limitation. And it’s free of charge, because those people are connected to the same network.

    The problem could appear in the copyrights. If you have 1mb internet, which is still not common here, if we have 128kb with unlimited download, we are happy, you can download a pirated movie from the internet, but it would take you like a day (I don’t know how long exactly). But imagine someone else on the network would download it and make it public – something very common here. Now everyone would be able to download such movie, MP3’s, software etc., within minutes or second, instead of days and hours.

    I’m not familiar with the internet provider situation in America very much, but maybe this could be an issue.

    Comment by Andy Krasny -

  51. I agree with Steve. Newspapers and much of traditional media is tremendously concerned with the serious threat of having competing media that has multiple levels of true measurement and analytics.
    But their hand will be forced. The tried and true classified ad revenue stream is under attack from craigslist.com and others. And these attacks will start coming from all sides.
    As some point they will have to make moves to adapt to a customer that expects measurable ROI. If traditional media cannot adapt they may soon just become support materials for media that can actually provide conversions.

    Comment by Ken Vernon -

  52. Mark,

    The newspaper business is the last place you will find technical pioneering. The CueCat debacle only proved that their BS meter was way out of whack. Opening up to technical partnerships would require an incredible expense in their IT infrastructure just to communicate with a proficient partner.

    I’m basing these comments on work I did while with the IT department of the Savannah, Georgia School Board. I created one of the first school board websites, way back in 1995. In that early enthusiasm we started discussions with the local newspaper to exchange support for an upgrade of the inter-school network for easier and more comprehensive access to school news and publishable content. They had no comprehension of our simple proposal, or its business and community value.

    I am afraid that the confusion between the business of selling paper and actual community spirit continues to this day. And there is definitely no connection between newspaper publishing and agile business practices.

    Comment by Walter Lounsbery -

  53. The PPC for Display ads would be extremely expensive. The newspapers first don’t want to risk letting media planners (and clients) know how ineffective their paper is at reaching your audience. They would need to charge very high rates to ensure they are making money, which would close the door for most sites trying to establish their brand.

    Uploading your file yourself conflicts with most publications approval policies. It might work if you had previously approved artwork which you could insert, but the NP would be giving up a lot of control.

    Placement is also an issue. You would be paying more for the back cover of the main section than you would for an inside left hand page of the food section.

    NP’s and magazines have tried this in the past. Remember the “Cat?” I think Wired was the first to include barcodes on the ads. It didn’t work mainly because people don’t read a magazine while they are next to a computer (I do however). If it is a new site, maybe, but established brands will have a tough time because of the existing brand recognition.

    Comment by Boudreaux -

  54. I think you may be thinking too far ahead. How many people have a High Def HDV camera that they use to record 10GB files that they want to send around? I know that was just an example, but given that most people dont use RSS, many still dont have a high speed connection, and plenty still dont even have Internet access. I agree with your overall idea, though, and think that if a company does launch it and market it properly it stands a very good chance of being quite large.

    Comment by kid mercury -

  55. I am a money manager specializing in media stocks. Recently, I have devoted a lot of time to the newspaper stocks. Sadly, I believe the reason why PPC might not be adopted is because newspaper management teams are worried that if they radically change the way advertisers have to buy ads those advertisers will reconsider the efficacy of their newspaper ads and leave the medium completely. So it is certain slow death (with lots of free cash flow) or an aggressive play that might avoid death but could also accelerate it.

    Comment by Steve Birenberg -

  56. Some points about the newspaper questions:

    * PPC in print? Print is an informational medium first and a branding medium second; direct response is WAY down the list. A PPC pricing model would not capture the value being created.

    * PPV in print? No measurement system.

    * Cost basis? The expenses of manufacturing and distribution of print are WAY ahead of any other costs; content — who’s writing — is relatively minor.

    * Automated ad placement? Uploading PDF or GIF file? Been there, done that, years ago. Many newspapers have systems that allow auto dealers and real estate agents to push inventory data directly into a Web-based program that can generate complete print display ad layouts. Celebro is one vendor. And of course liner classified online entry has been common for years.

    * Auction-based pricing, section-based pricing: Much newspaper ad pricing is already highly variable based on the nature and location of the ad. Employment ads, for instance, typically command a radically higher price per unit of space than the underwear models on page 3 or the cellphone ads on page 7, which are in bulk-contract retail space. Much of the success of an ad director is in “tuning” the pricing model. It’s an art, not a science; an auction would be more of the latter, but I’m not sure there would be any practical advantage.

    * Applying these principles to newspaper websites: Much of this is already being done, including PPC, auction-based pricing, etc. In your market, Quigo has a deal with Media News Group and powers auction-based ads on the Denver Post and Rocky Mountain News websites.

    Comment by Steve Yelvington -

  57. As far as I can tell, it falls under the same spectrum of “because that’s how we’ve always done it.”

    Comment by Barrett Garese -

  58. As far as the suggestion for PPC ads for newspapers I have one reservation. I am the Director of Marketing for an internet retailer (http://SewellDirect.com) and one thing we are really trying to do is brand our company. Part of that initiative, obviously, is branding our website.

    When you have a URL that redirects to your site (I am guessing that the ad would have a link to the newspaper’s site which would redirect to the advertiser’s page) you lose that branding opportunity. It might seem like a trivial drawback, but think of all of the traffic that Amazon and eBay generate because people are familiar with their domain names.

    That being said I think it’s a creative idea and it does have potential if that minor wrinkle could be ironed out. I would really like to see the offline advertising world look more like online – I still can’t believe how rare on-demand advertising is in the offline world.

    Comment by Preston Wily -

  59. From my perspective, 99% of my internet traffic is external and would never fall into the local/neighborhood/city category. However, if you applied the MCI friends & family model and allowed me to select a few friends/family in other towns with gigabit connectivity, then I could see interest in transferring a home movie to family within minutes (in another town). All other traffic would be capped at 1/3/5/10mbs.

    Comment by Mike -

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