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01 August 2006


telstra espn internode


Walled Gardens

So if you happened to have made it to the end of my Phoney Internet post, and then glanced at another post entitled A Tale of Two ISPs (OK, a fairly unlikely occurrence) you might have perceived an inconsistency in my position. Because I am single-minded in my devotion to quality content for you, dear reader, I must now address this potentially glaring inconsistency.

In The Phoney Internet, I said that internet service providers are trying to repeat the same old mistakes of old, offer “exclusive content” in order to differentiate themselves from the pack. This is the “walled garden” approach, and I said it was annoying to consumers and hence doomed.

And on face value this might seem to conflict with the praise that I lavished on my new ISP for their provision of premium content. Yes my friends at Internode provide a games server, extensive mirrors of open source software, a premium usenet feed, and access to streaming radio and TV. So why isn’t that a walled garden and why aren’t Internode doomed? Perhaps I should have spelled this out before.

The short answer is that Internode’s content is not exclusive. I can be anywhere in the world, on any ISP’s network, and get access to the same content. Which is not to say I necessarily will be able to get it from Internode’s servers — they wisely restrict access of the premium content to their own customers — but the content is available somewhere on the internet. For customers on Internode’s network you can just get it more conveniently, cheaper and with greater quality of service.

Old school ISPs like Big Pond and others just don’t get this. They think that they can offer content that is not available elsewhere and the masses will flock to sign up with their network. OK I like Roy & H.G. but I’m hardly going to churn across to Big Pond just to download them. And I’m not alone in thinking this way.

The evidence supports my position. The most famous example of a failed walled garden is AOL, as I cited previously. More recently though I give you ESPN Mobile:

[The analysts] now estimate that ESPN Mobile will lure a mere 30,000 subscribers over the course of this financial year, well below their original estimate of 240,000. Along with the losses generated by a second Disney-branded phone service, ML expects that the Mouse will lose $135 million on its experiment in FY06.

Oh dear, poor ESPN. And it’s not for want of trying, either. Apparently the advertising campaign has been relentless.

The point is that this is not just a one off. This is the norm. Noone’s going to buy a ESPN phone any more than they are going to buy AFL-affiliated internet service, any more than they’re going to buy a DVD player capable of playing MGM movies not playable elsewhere, or a Fox-branded television (unless you are Dick Cheney of course).

Telstra execs, take note! Do you hear me, Phil Burgess? You’ve gone awfully quiet over there…