The closing of the Internet*

Imagine you are trying to start a news site in your community. Your competitor, part of a national chain, offers instant-on, full-screen HD video and a host of other data-intensive features that load the moment you hit “click.” But though you have a broadband connection, even simple videos that you’ve posted load slowly and play in fits and starts.
So you call your Internet provider — most likely Verizon and Comcast — and ask what’s going on. A sales person explains to you that if you want your readers to enjoy the same rich multimedia content as you competitor, then all you have to do is pay another $1,000 a month.
You can’t. You struggle on. And, within six months, you shut down.

That is a likely scenario if we move away from net neutrality — a vitally important principle that all Internet traffic should be treated the same. The FCC has been trying to mandate net neutrality, only to be shot down in the federal courts. And today the New York Times reports that Google and Verizon have been involved in negotiations to come up with a multi-tiered Internet with different levels of service and different levels of pricing. [Update: Or perhaps not. See below.]
“It’s like the end of ‘Animal Farm’ where pigs and humans sit down at the dinner table,” tweeted new-media strategist Steve Yelvington. In fact, Google at one time had been a leader in pushing for net neturality.
Please understand what net neutrality is not. There is nothing wrong with charging consumers more for better Internet service. Broadband costs more than dial-up, and fast broadband costs more than slow broadband. That’s life.

Sorry, There's No Way To Save The TV Business

The traditional TV industry--cable companies, networks, and broadcasters--is where the newspaper industry was about five years ago:
In denial.
There are murmurings on the edges about how longstanding business models will come under pressure as Internet distribution takes over.  But, so far, the revenue and profits are hanging in there, so the big TV companies don't really care.
Specifically, the TV industry's attitude is the same as the newspaper industry's attitude was circa 2002-2003: Stop calling us dinosaurs: We get digital; We're growing our digital businesses; We're investing in digital platforms; People still recall ads even when they fast-forward through them on DVRs; There's no substitute for TV ads.  And traditional TV isn't going away: Just look at our revenue and profits!
After saying all this same stuff for years, the newspaper industry figured out the hard way that, eventually, reality intrudes, that you can't stuff the genie back in the bottle.  And over the next 5-10 years, the TV industry will figure this out, too.
Here's the problem in a nutshell:
As with print-based media, Internet-based distribution generates only a tiny fraction of the revenue and profit that today's incumbent cable, broadcast, and satellite distribution models do.  As Internet-based distribution gains steam, therefore, most TV industry incumbents will no longer be able to support their existing cost structures.
Specifically, TV business models for the past half-century, from broadcast to cable to satellite, have been built on the following foundation: