U.S. lags in Internet download speeds

Commentary: Latest USB flash drive could alleviate problems

Oh, what a shame it is that the U.S. is a Third World country -- at least when it comes to Internet download speeds for massive files like movies.

While parts of the world (think Korea, Shanghai and the Netherlands) have dedicated portal-to-door, optic-fiber connections with lightning download speeds for films, the U.S. has treated the Internet as a sick sister that must make do by riding piggyback on other connections to the home, such as telephone wires, cable or satellite, which download at dinosaur speeds compared to optic fiber.

As for use of telephone wires, we are saddled with fragmented Baby Bells that have a vested interest in keeping the status quo to milk their geographic monopolies rather than investing in the future, and that won't change anytime soon. And cable companies are making plenty of money, thank you, off their current systems and don't see any need to upgrade to optic fiber either. Although Google has made noises about implementing an optic fiber system, it will be a slog and years in coming.

Which leaves the U.S. with a creaking, antiquated Internet system that is ill-suited for downloading films. It generally takes hours of dedicated computer time, and downloads often are interrupted and must be restarted. For this reason alone, the Web is unlikely to be the great panacea for film distribution that it is widely believed to be; it just isn't going to replace the DVD market for at least 10 years. For streaming, the Internet works just fine, but one needs fast download capability to make films the "what you want, when you want it" experience consumers demand.

Bandwidth is a limited resource, and more demands are being put upon it every day. One or more of several things are going to happen: Download time will get longer because of volume, there will be limits as to what one can download per month, or we're going to have to pay -- a lot -- for the benefit of speed. Even after a successful download, one must struggle to figure out how to move the film to the device you want to view it on, such as a TV or mobile device, because convenient portability of downloaded films is far from a reality. Just try watching a film downloaded from iTunes on a Microsoft Xbox console.

Which is why it is that in 2010, in a world of routine treks to the International Space Station, the sequencing of DNA and nanotechnology breakthroughs of all sorts, the fastest-growing method of film distribution in the U.S. is a technology as old as Coca-Cola vending machines: Redbox.

You stand in line, pay your money and out comes a DVD. Hey, modern technology at work! As basic as it is, it addresses consumer demand for instant gratification that other delivery systems don't. I see it, I want it -- now.

While Redbox and its ilk have their advantages, they also have significant drawbacks. First, they only can offer a limited number of titles given the requirement to stock physical inventory. Second, they entail the inconvenience of requiring the customer to return the DVD to the kiosk when they are done. And third, some studios have been hostile to Redbox because renting DVDs at a buck a day is degrading the value customers customarily put on DVDs. Notwithstanding those caveats, at least in the short term, Redbox is the winner.

But technology is upon us that will dramatically goose film distribution and act as a bridge between Redbox and the happy day that the Internet moves to optic fiber.

The latest USB flash drive (3.0) is now available, and it can download a film in less than 30 seconds. You can hold an entire film library in your pocket, and you can connect it to almost any device including computers, set-top boxes, mobile devices, the latest flat-screen TV sets and, through an adapter, to older television sets. The films will be available at kiosks, just like Redbox, but with unlimited film choice, no requirement for the consumer to have to return to the point of purchase and direct royalties to the studios to avoid stepping on their toes. The customer will have the choice of renting or buying (with different price points). The technology incorporates digital-rights-management software that limits access to the customer's own devices, and piracy protection is better than for all other media.

Imagine you are about to board a plane with your laptop, and you come across a digital kiosk at the airport lounge. Or you come across the kiosk at Starbucks on your way home. Pick one or more films of your choice, decide whether to rent or buy, and download each one in less than 30 seconds to your USB flash drive. Plug it into your device of choice, and viola!

The emerging technology requires a sophisticated system to implement all the required elements as well as savvy marketing and film expertise and enough capital to roll it out. The two main challenges include whether the USB 3.0 flash drives will be widely available in time (right now, there is just a limited rollout) and whether consumers will adapt to it, as it requires purchasing the new flash drive and carrying it with them. But this might be the future -- at least in primitive Internet countries like the U.S.

Schuyler M. Moore, a regular commentator for The Hollywood Reporter, is an investor in a company that is developing the USB kiosk technology. He also is a lawyer at Stroock and an adjunct professor at UCLA Law School and the UCLA Anderson School of Management. He can be reached at smoore@stroock.com.
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