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August 24, 2007

Mark Cuban's Internet is "Dead and Boring"

Cuban270x336 Being an entrepreneur is a tough, even if you're a billionaire like Mark Cuban. Just because you have lots of money to throw at something, it doesn't mean you won't lose it. Indeed, even if you've already thrown lots of money at something, you may have already lost it. Therefore you might feel compelled to give interviews to bring some short-term attention to your own product or service in hopes that people will consider using it. If you capture enough of them, you might even turn your little venture into something successful, or at least get it to a point that you can sell it without losing too much of the money you've invested.

Even when I disagree with him, I have to begrudgingly conclude that Mark Cuban is an incredibly smart man. He may well believe that the Internet is "dead and boring" as it stands today, but I think the statement is more provocative than genuinely defamatory. Whether or not by design, it will bring attention to Cuban and his HD television venture, HDNet.

It will not affect what we do on the Internet, except maybe give us more energy to prove him wrong.

I expect Cuban's words to be taken out of context a lot over the next few days. His salient point is that broadband speeds need to increase, and that's very true.

He also doesn't expect the availability of higher broadband speeds to increase over the next five years  as much as it has over the past five, and that's likely also true. Although speeds of 9 gigabytes per second are on the horizon with Internet2 and Internet3, it will be awhile before the infrastructure is at a point that it can support it on a wide scale -- certainly more than 5 years.

But when it does, you can expect it to outperform anything Cuban has to offer, and it won't even be close. To use Cuban's own analogy (which he used to compare today's speeds to 1 Gbs speeds), it will be "like comparing the plane Orville and Wilbur Wright built in 1903 to a brand-new Boeing."

The problem Cuban has is that he's either underestimating the importance of content or overestimating the quality of his own, as he has hung his hat on the content generated by disgraced (and aging) reporter Dan Rather "for another 100 years."

His statement is obviously hyperbole, but it does give us a sense of where Cuban's head is at. Although he's fun to watch and can always be counted on for quotable material, I don't think we have much to worry about from his quarter, if we continue to innovate as we have been.

And that's where the Internet still has a significant edge. TV is still just TV. It relies on interrupting people for revenue. The Internet is a space where people are still trying to push the boundaries and make it better and give people what they want, when they want it, and under their own terms. That's not only an exciting place to be from our perspective, but it's also a desirable one.

Until we perfect compression techniques or increase the bandwidth of the Internet over a wide scale, it may be true, as Cuban says, that the Internet will be a utility, like electricity. Even if that's the case, though we still have the capability and enormous potential to make it a better utility.  Investments made up front to improve utility through usable interfaces have historically had a cost-benefit ratio of 1:10 to 1:100. I don't know of any comparable television venture that has any return that is so promising.

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Let's put that last statement in perspective. Macy's recently dedicated $100 million to run fall television ads featuring celebrities like Jessica Simpson and Martha Stewart in an effort to boost sales, which have not been great. These ads will run on television and rely on an increasingly ineffective interruption model (though some unimaginative agency wonks might try to make them "viral" by putting the 30-second spots on YouTube).

Imagine what Macy's could accomplish with that money if they instead spent it in a way that allowed them to have a more direct relationship with their audience, or if they spent a fraction of that improving the usability of their website.

Mr. Cuban will bring himself a lot of attention by making inflammatory statements, and it will actually work to some extent. He's not paying money for this attention, so his ROI is off the charts. But at some point, a smart person like Cuban is going to realize that the time he's spending tearing down a competing medium would be better spent improving his own product, perhaps by integrating some of the best utility already available on the Internet. - Cam Beck

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Comments

Cam,

No doubt, Mark Cuban is a smart man. And very rich. He also has an ego the size of Texas. That combination gives him permission in his own mind to saying anything he wants.

As I've posted on some other blogs about this, I work at an internet measurement company that allows me to get a magnified view of online behavior daily with a sample of 10M people.

I have some things to say about this:

http://ebjones.typepad.com

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