Metcalfe's column: Internet Epidemiology meets pay-as-we-go

This week you get not only The Phantom Menace from George Lucas but a double feature from me. Here's news from two until-now-ahead-of-their-time Internet companies.

The first company is SoftLock.com, which was founded in 1992. This week it will announce a new system that will enable publishers to sell -- and Internet users to buy -- digital content. The interesting part is how SoftLock.com exploits Internet Epidemiology.

Company No. 2 is Matrix Information and Directory Services (MIDS), founded in 1990. This week it will be explaining early signs of slowing Internet growth. I broke this story online last week.

Key to SoftLock.com

SoftLock.com's new distribution system encrypts digital content and lets it be paid for, downloaded, and displayed using browser plug-in software. Before valid keys are purchased, a sample of the content is displayed. With keys, buyers get to see it all.

An owner of SoftLock.com-enabled content can set price and terms of sale -- for example, if the content can be printed or cut and pasted. (See www.softlock.com.)SoftLock.com is aimed at premium content, the cost of which is not likely supportable through advertising. Standard & Poor's, Morningstar, and Benchmarking Partners will this week announce charter membership in SoftLock.com's content-merchandising network.

Having advocated the Pay-As-We-Go Internet (TM) for a while now, I know that many Internet users think that, if there is no practical way to charge for content, they will get it free, which is just fine with them. The reality is that without payment systems such as SoftLock.com's, a lot of premium online content will be not free, but unavailable.

True, SoftLock.com's online encryption and plug-in techniques will later, if not sooner, be hacked by content thieves. But so too will offline security, and yet offline commerce continues. Furthermore, SoftLock.com says it is prepared with escalating countermeasures.

And SoftLock.com wisely exploits Internet Epidemiology. If you buy content via SoftLock.com and think other people should have it, you can just send it to them. Because they have not yet purchased keys, SoftLock.com's plug-in will display a sample and offer online purchase.

Digital content will spread rapidly via word of mouse, generating substantial revenues for their owners.

MIDS reports saturation signs

SoftLock.com may be just in time. As I reported online last week, MIDS is seeing early signs of slowing Internet growth.

For nearly a decade, the number of Internet hosts -- computers reachable through DNS -- has been increasing 100 per cent per year. Over the past 18 months, however, the growth rate has been dropping toward 60 per cent per year.

This drop should generate anguished debate. Internet enthusiasts will say host counting is unreliable -- and increasing numbers of Internet hosts are behind firewalls or have dynamic addresses that MIDS cannot count. And anyway, they'll say, more Internet users spending more time using more applications using more bandwidth are still, at last report, doubling traffic every four months.

Well, I say the Internet's days of annual doublings are over. And I hope not too many of you still have stock market capitalisations based on there being a billion Internet users by the year 2000.

But switching back from the dark side, this current slowing of Internet growth may be, if not false, then temporary. Deployment of Pay-As-We-Go infrastructure is likely to reinvigorate Internet growth. Ditto the deployment of residential broadband and substantial numbers of network computers. Ditto shop.starwars.com.

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