Broadcast.com President Says E-Commerce Will Be Holy Grail

There’s no doubt that streaming media is going to affect how we purchase information and entertainment in the next millennium. However, the problem with this kind of new media right now is that it’s often simply a pain for consumers. Downloading can be tedious, and sometimes unbearably slow. Right now, technology seems to be an enabler and a barrier at the same time.

But Broadcast.com (Nasdaq: BCST) president Mark Cuban imagines a world where the consumer will have infinite choices, where buyers will have almost all the power. During his keynote address on Sunday at the South by Southwest Interactive Festival, Cuban, whose company is the leading broadcaster of streaming media, made numerous predictions about the future of media and how e-commerce will play a major part.

In the world Cuban envisions, bandwidth to the home will be free downstream, but expensive upstream. That means it will cost content providers a lot of money to upload media to the Web, but customers will be able to grab whatever they want quickly and easily. The access to the media will be free, but consumers will have to pay for specialized content.

“E-commerce will be their holy grail,” Cuban said of content providers. “With each of them making money on a per transaction basis.”

All-You-Can-Eat Communities

What isn’t going to happen, however, is a business that succeeds by charging customers every time they grab one song. “Content will be sold in all-you-can-eat communities, not by search and download,” Cuban said.

For example, fans could pay $2 a month to get every single audio or video created by a certain artist, as well as advance ticket information, and access to chat rooms and message boards to communicate with other fans.

But Pay-Per-View for high-profile events will work on the Web, Cuban said. Cuban cites the 9,000 subscribers who paid to watch a recent wrestling match via Broadcast.com as evidence.

MP3 Will Die

One of the most intriguing things Cuban said was that the MP3 format, which allows fans to download CD-quality music and listen to it on their computer, isn’t going to last long. MP3 is currently giving record companies countless headaches and making the music industry and technology companies scramble to find new ways to fight digital piracy.

Cuban believes MP3 will be “absorbed by Real (Networks) or Microsoft.”

“No one has the economic incentive to keep it alive,” he said. “There are no technical advantages to MP3.”

And speaking of RealNetworks (Nasdaq:RNWK), this could be a stock to watch in the coming months.

“RealNetworks will be bought in 12 to 18 months by a telco,” Cuban predicts, although he doesn’t rule out other possible suitors such as America Online or even Broadcast.com.

Cuban is a big sports fan, and his thoughts about streaming media and the role e-commerce will play in the future of media companies can be summed up well in a simple sports analogy.

“The game,” Cuban said, “is not over by any stretch.”

Broadcast.com certainly seems ready to play.