A surge for broadband
Getting Online
Broadband is gaining speed. Among new technologies, only the DVD player has attracted customers at a faster pace. Figures last week show that high-speed Internet access is becoming commonplace in regions where dial-up was once the only option.
Nielsen//NetRatings, an Internet measurement service, says broadband usage climbed 49 percent in May from May of last year, to 39 million people. The increased usage is bringing new online content, as it becomes feasible to quickly download "rich media" such as online music and movies. "Broadband provides a solution to a problem," says Bruce Leichtman, president of Leichtman Research Group. "That problem is: `I am frustrated with my narrowband experience, and I want something that will be holistically better.' "
Surf's up. With broadband, workers in different countries can share data, while consumers can surf the Web at the same time they are phoning friends. "These abilities have broader implications," says Marc Ryan, director of analysis at Nielsen. Already, music services such as Apple's iTunes, Sony and Universal Music Group's Pressplay, and Listen.com's Rhapsody have sprung up, as higher speeds have made downloading MP3 files feasible. Five Hollywood studios have teamed up to offer Movielink, a collection of movies on demand. Microsoft has deals with four cable companies to offer Xbox Live, an online gaming system that depends on high speeds. And Major League Baseball now produces streaming video webcasts of games for $2.95 each. Broadband also is changing advertising, allowing for Web pitches that are closer to TV commercials.
The one loser: Internet pioneer AOL. Only 900,000 of AOL's 34 million subscribers buy its broadband. AOL has lost more than a million dial-up customers since late last year. "By 2005 we expect that half of all online homes will be using broadband connections, and most of those will be provided by cable and telephone companies," says James Penhune, a director of the global broadband practice at Strategy Analytics.
High-speed connection
Total U.S. broadband users (in millions)
Dec. '02 33.6
Jan. '03 35.6
Feb. '03 36.2
Mar. '03 37.1
Apr. '03 38.7
May '03 39.0
Source: Nielsen//NetRatings; USN&WR
-Jodie Kirshner
This story appears in the June 30, 2003 print edition of U.S. News & World Report.
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