How broadband will start a fight over rights

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The Independent Online

The big talk at the moment is about broadband and how it will fundamentally change the way we use the web. We're told it will make the web more exciting and open up new avenues for advertising and subscription-based services. It will leave us all wondering why the Government allowed BT to hold on to the local loop for so long, and asking why the cable operators didn't get round to launching broadband services sooner.

The way things are going, it looks like Telewest will get there long before rivals NTL and CWC, but then, let's face it, that's not exactly such a difficult task given the problems currently plaguing both cable operators. And BT doesn't seem to be in much of a hurry rolling out ADSL.

Taking in the bigger picture, European operators such as Chello and Nokia (in a partnership with First Telecom) are due to table their plans for broadband services in the UK, and could steal a march on everyone else. Chello has services up and running all over Europe and is rolling out in markets all over Australasia and Latin America. In the UK, my guess is that it will team up with BSkyB and work on providing a high-speed Internet service which carries Sky's vast array of content to PCs. Chello has already launched a satellite-based broadband service in Australia and could easily do the same in the UK, with the right content partner, of course.

It will be worth watching what happens when the FA this week announces it will separate internet Premier League football rights from TV rights. Most of the moves towards signing rights deals at the moment are all being driven by the broadband revolution, particularly in football and video on demand. Broadband will be the catalyst for true convergence of Internet with entertainment and media programming, which is why News International has its sights set on an entertainment portal.

The moves are all part of one great masterplan: build the audience and the money will come. Over the next few months there is going to be negotiation after negotiation to secure exclusive rights to football games, movies and events, all serving to evolve the internet into a viewing medium that will, inevitably, pave the way for more ad revenues. No doubt the men obsessed with "stickiness" will be very pleased.

The car's the star

When Autobytel, the US internet car giant, announced it was launching a UK service at the end of 1998, it was widely thought that the company had taken leave of its senses and that Brits would never take to spending thousands of pounds on a car via the web. "It may be popular in the States, but it will never catch on here," was one car manufacturer's view I heard at the time. Just over a year later, the market has changed beyond recognition, and the sceptics who were so baffled by the combination of the words e-commerce and cars are now desperately trying to catch up.

It's a bit of a naff thing to say, but the new bandwagon is cars; or, more specifically, cut-price car sellers that eliminate the annoying middlemen. While this trend has much to do with the pervading mood created by the "rip-off Britain" campaign, it has been significantly advanced by the entry of new players such as Virgin Cars, OneSwoop, Carbusters and DirectLine that realise there's a fast buck to be made at the expense of hackneyed old car dealers. Already the UK's largest car dealer group, Pendragon, claims to have lost a staggering £60m in sales due to the fears sparked by "rip-off Britain".

But in the face of this new demon, what can the traditional car dealers do? Most of them are already hooked up to an extranet and are talking about their own Internet operations, but when they are being cut out of the equation by manufacturers setting up direct-sell websites, what are their chances?

Panic attacks are setting in, and after years of pulling the wool over consumers' eyes, a step-change is going to happen, and consumers are going to end up with the upper hand.

At the moment, dealers are tied to manufacturers, but already the likes of Volkswagen, Vauxhall, Ford and Honda have struck out on their own. More manufacturers will no doubt follow, although it is questionable whether the direct-sales strategy will stick, given Vauxhall's lack of faith in the number of cars it has so far managed to sell through its website. At last count, the figure stood at 248, which, if you think about how much new cars cost, is actually quite a respectable figure for a business to consumer site. It's well over £2.5m in just four months, not a bad figure when compared with the revenues of, say, Lastminute.com.

Vauxhall's sense of disappointment is nothing short of astounding; it really couldn't have done any better.

amy@wagswell.co.uk

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