The Internet

The Internet

As a communication medium, although the Internet constitutes one under- lying communications infrastructure, it also combines within it more than one medium. At the time of ARPAnet, the medium was essentially based on

CARVETH

the traditional, physical telephone infrastructure—with some new routing and software technologies added (Naughton, 2000).

Eventually other functions —such as e-mail in the 1970s and Usenet in the 1980s—began to evolve. Although the growth of these functions in- creased dramatically during the first two decades, the Internet did not become a mass medium until the advent of the World Wide Web follow- ing the introduction of hypertext (HTML) in 1989, the first web browsers (Mosaic, Netscape), and finally search engines. The growth rate of the Internet in the mid-1990s onwards increased dramatically once the Web came into being.

A number of factors contributed to the Web’s explosive growth. First, the underlying technologies, infrastructure, and appliances were already widely distributed across the general population, especially the telephone system and home computers. The added costs to the economy of laying the foundation, and to the consumer of becoming connected, were relatively minimal as the Internet’s “piggybacked” on what already existed.

A second reason for the Web’s success is to be found in the multifunc- tionality of the Web and wider Internet. A user could now getting three or four new functions for the price of one—interpersonal communication, in- formation retrieval, group conversation, shopping, etc.—from different media technologies such as e-mail, ICQ, Web, Usenet, streaming audio and video, and so forth. This technological convergence has become the ratio- nale for the plethora of media mergers completed in the name of synergy. In addition, unlike radio and TV, both the Web and the Internet are pro- foundly interactive relatively user-friendly (Chan-Olmsted & Park, 2000). The programming that allows the user to “surf” is invisible.

Finally, largely because the Internet started as a governmental, not-for-profit endeavor, almost all content on the Web was free (and most remains so, despite some move towards a pay-per-view direction). If one compares the slower growth rates of the telegraph, telephone, cinema, and cable television, with the far faster expansion of radio, over-the-air televi- sion, and the Web (the latter does involve a relatively small, continuing charge by the service provider and the phone company), one could con- clude that media without user costs (other than initial purchase of the ap- pliance) will grow at a much faster rate than media carrying significant, continual use costs.

The reaction of older media to the Internet has taken several forms. The newspapers have felt the most threatened by the Web, and thus have been the first to respond in several ways. First, newspapers started offering their own product through the Internet but with the same “look.” Second, news- papers added some new elements that fit the new medium, while keeping the original format basically intact. More recently, newspapers have sought new ways to present content, e.g. the portal with its myriad links to other pages and other sites (Chan-Olmsted & Park, 2000).

13. ECONOMICS OF ONLINE MEDIA