November 7, 2001
Higher Speeds Online
The broadband revolution is still coming, and it's almost here
Faster is better, at least it is on the Internet. No one wants to wait for Web pages to load, and shopping is a pain when more time is spent loading than browsing. That's why more and more U.S. Internet users are dropping their dial-up modem Internet services and switching to broadband services such as DSL and cable modem service.
Jupiter Media Metrix, the Internet market research company, says 41% of U.S. online households will subscribe to a broadband service by 2006. That's more than 35 million households and significantly more than the 5.2 million households that used broadband services in 2000. The large increase will be primarily due to increased broadband marketing efforts by large Internet service providers, including AOL and MSN, lower broadband service prices and increased availability.
Microsoft and AOL heavily promote their broadband services. Microsoft has signed agreements with DSL providers Qwest Communications, Verizon Communications, BellSouth Corp. and SRC Communication. The goal is to reach 90% of households that are capable of receiving high-speed DSL. AOL, which has 31 million subscribers, plans to make its high-speed service available to all of Time Warner's 12 million cable broadband customers and already offers broadband to Time Warner Cable subscribers in 10 cities, reports NewsFactor. AOL also recently introduced AOL DSL to its current customers for an additional $31.05 a month. In addition, EarthLink, another Internet service provider, already has 406,000 broadband customers out of its 4.9 million subscribers.
The cost of many broadband services has decreased over the last two years and availability has increased. Most medium-to-large sized cities have companies offering broadband services. Costs can be as low as $40-$50 a month for service, and the recent marketing push gives new users free extras. Some promotions include free cable or DSL modems, a free month or months of service, free installation and some even offer other free products such as PC cameras. With those extras and the faster online service broadband provides, it's no surprise more people are switching to broadband.
According to Jupiter analysts, "it's absolutely critical for companies with relevant content, products and services to time their business initiatives to reach the anticipated broadband audience." This goes for online retailers too. As broadband services become more commonly used, online retailers will be able to use higher-resolution images, video and more animation. It won't be as crucial to focus on having fast-loading pages because download speeds for broadband services are five to 10 times faster than traditional 56k dial-up modems.
Currently, broadband use is increasing. It's not widespread enough for online retailers to forget about the majority of Internet users that have traditional modem connections. However, retailers should be aware that a change is coming and plan their long-term Internet strategies accordingly.
- by Julia M. Duncan