Ma v. Bell: Power to the people

At the Online Publishers Association confab, I took to the stage and renamed my panel. It was called, Embracing the Audience. But I said the audience doesn’t necessarily care whether big media embraces us and besides, were not an audience anymore, just watching what the big guys do. Don’t call us consumers, either. I said it was about enabling the public. But, as a child of the ’60s, I preferred to put it this way: Empower people.

That’s what smart business is about today: finding ways to empower people, to hand over tools and authority and control and knowledge, to help people do what they want to do, to get out of the way. In the old days — the days of big, the days of scarcity — you made money getting in the way. But that way is imploding. Witness today’s news:

AT&T is acquiring Bell South after having combined with SBC and acquiring PacTel, Ameritech, and Southern New England before that. So now it’s AT&T vs. Verizon (which should just change its name to Bell Telephone, for old time’s sake). But consolidation these days — when small is the new big — is about dinosaurs huddling against the cold, about Gulliver losing out to all those damned Lilliputans. Distribution is not king; in fact, it’s a rotten business. Content is not king; hear the whining from that end of the world. The scarcity economy is over. Openness kills monopolies. Don’t congratulate AT&T. Pity them.

And then there is Skype. When I was in London, I used it nightly to call home for free. As I bragged earlier, I forwarded my US mobile to my Skype-in and my Skype-out to my UK mobile, bypassing or at least discounting all the big, old players. Skype empowers me.

At OPA, I heard big old companies complaining — complaining — that CraigsList and GoogleNews and other modern companies were able to do what they do with small staffs. It was like hearing little kids who don’t get the ball on the field stomping their feet and whining, “It’s not fair, it’s just not fair!” No, it’s not. The new, small companies do to some extent, for now, succeed on the backs of the big companies — pointing to their reporting, using their wires. But the big, old companies just don’t understand that the new, small companies really succeed not because they piggyback but because they empower. Skype builds the network of choice, not compulsion. Digg hires 150,000 news editors for the cost of nothing but handing over power. Google organizes the world’s knowledge by tapping our clicks, our knowledge. They win by empowering the people.

Oh, the big, old companies will still reflexively try to get in the way. That’s all they know how to do. They will try to restrict what we can do on “their” wires with “their” information. They will try to recruit stupid government regulators to conspire and help them. We, the people, have to think five steps ahead of them and organize all our little pieces of ropes and pegs to tie them down. But we will. It’s inevitable.

When free, broadband wi-fi comes to my town — the former headquarters of AT&T, the one-time home of the Golden Boy — I’ll be able to get rid of my Verizon phone and use my Sprint cell less and cancel my Cablevision bill and cancel my newspaper subscriptions and life won’t just be cheaper, it will be better.

The last huge merger in telecom — before Sprint and Qwest are mopped up — is the best indication that the telecom giants are falling. Thanks to Apple and TiVo giving entertainment addresses we can get to around the one official wire into our homes, expect the same to happen with the cable business. When I said that in the hall at OPA, some folks protested that cable still has good cash flow. But I replied, beware the cash cow in the coal mine. There’s no growth there. And thanks to no end of empowering tools — Blogger, GoogleNews, Digg, Wikipedia… — the media companies that tried to get in the way between us and information and each other will also consolidate and then shrink unless they learn to empower us. We are witnessing the supernova of bigness.

  • http://dylko.blogspot.com Ivan Dylko

    I agree with the merits of idea of empowering people, but I am a bit skeptical about old big news media going under because of that. They are businesses and they have resources and often the talent to produce a decent news product. The only thing many of them lack is vision of how to quickly adapt to and operate in this new interactive environment – but it seems it’s just a matter of time. Much like it happened throughout history – new technology made certain cool things possible and after some time this technology was adopted by old media in order to stay competitive: newspapers’ use of more graphics in television age, radio going portable, and we all know what happened when internet came about.

    My point is that since invention of radio – folks predicted demise of newspapers, and the same happened when TV was invented many people thought that this would be it for radio – but look at all of them now. Newspapers are still around and broadcasters are still dominating. All of them have undergone quite a transformation, but all of them are still pretty much alive and well.

    Same thing happened with embrace of internet-enabled tools and opportunities. How many old traditional media have allowed blogging and discussion groups on their pages? Many. How many offer RSS? Many. How many are becoming more interactive and accessible? Not enough, but it looks like some are changing in that direction. I doubt that in 10 or 20 years news organization will look anything like what they are today. So, as much as I want to believe that old corporate media Goliaths will be defeated by small Internet-empowered Davids, if history is to repeat itself, it doesn’t look very likely…

  • Mike Eldridge

    Free Wi Fi Broadband? No commodity is free. Someone is paying. In the case of Municipal Wi Fi it’s the taxpayers, whether they use it or not. Just how do you think the 1’s and 0’s get to and from your computer to the server you’ve accessed? Doesn’t the owner of the network ie; AT&T, have the right to expect payment for the usage of it’s network? I am amazed some people think the internet is some fuzzy cloud in the sky when in reality it is a highly complex and hugely expensive network. All the companies you named exist at the periphery of this network and are helpless without it. Disconnect your computer from your internet connection and type in an internet address and see the power of Google, Apple, TiVo. Economies of scale allow prices to be as low as possible. Imagine how expensive things like internet access would be if there were thousands of companies trying to recoup the expense of replicating the vast telecom network that we take for granted. Basic economics, ain’t it a bitch.

  • Hunter McDaniel

    Yes, AT&T has the right to charge for usage of its network. But it doesn’t have a right to use the franchises we gave them for laying the last mile as a vehicle for extortion. That ain’t basic economics, it’s called “rent-seeking”.

  • Jeff

    don’t drink too much Web 2.0 kool-aide.

    Serving MASS will always be big business.

    I suspect out of 100 normal people grabbed at random only 1 would bother with the crazy international call Skype work-around you engaged in jeff.

    Most just want to pick up the phone and dial and as long as the price isn’t outrageous compared to the hassles of “free” or low cost alternatives – they';ll do that cuz it’s simple and dependable. Pick up phone – hear dial tone -place call – ZERO calls to tech support. Hard to compete with that.

    Even with millions of ipods and other personal mp3 players sold – MOST people still turn on the radio for music and live with what the extablishment chooses to play FOR them – because it’s EASY and simple. MAYBE they’ll program 4 or 5 stations into presets – but MOST people don’t want to choose every single song they listen to.

    Web 2.0 is great – for the niche (relative to the pop at large) of people who want total control. But most people are content with having most choices made for them by the established makers of said choices.

    The business of serving mass isn’t going anywhere.

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  • http://www.mythusmageopines.com/mt Alan Kellogg

    Steve Jobs is now a major stockholder in Disney.

    The MacMini is being positioned as the central controller for an entertainment center.

    Apple has sold oven 1 billion dollars in music, and her video business appears to be on the same course. The iPod continues to be the big seller in MP3 players.

    Apple is now selling computers using chips and chip sets from the biggest manufacturer of such.

    What is Steve Jobs positioning himself for?

  • Old Guard

    Interesting article, though the hyperbole prompts images of wanting a schoolyard fight than that of an unbiased view of the nature of old vs. new media. While it is true that the publishing world is full of cautious conservative businesses, I think that there are several reasons why, though content might be not be king in the future, it will at least be a duke among the new media’s barons and lords:

    1) Cash is king: the rash of private equity takeovers of media companies and corporate media takeovers by private equity disciples is not necessarily evidence that these companies are being put out to pasture. The fact is that there are plenty of old media segments that have experienced market growth each year (book publishing being one example). It’s just that annual growth is in the single digits, not in double digit multiples. True, there may be some claim that electronic content has cut into that growth in recent years, but the answer of “How much?” is debatable. Furthermore, old media growth keeps happening, and at a much steadier pace than the ups and downs of most emerging markets. Last, Old Media represents billions of dollars in earnings worldwide, so only a little growth generates a lot of cash. Conversely, double digit growth in new media businesses are bound to happen because they work off of such a small base of earnings (if they have any). That is why private equity and hedge funds follow and invest in old media companies so closely.

    Most importantly, content still has a value attached to it, either due to the number of customers willing to pay for it or advertisers willing to reach a property’s many viewers/readers. People still talk about movies they love and follow the Oscars. Young kids still watch their favorite shows on Noggin, PBS, or Nick Jr. People still read books by their favorite authors. How is “discussion” going to usurp the value that content brings everyday to people?

    You contrast this to many pure-play new media properties, where revenue models are scarce and actual profit margins are scarcer, and the comparisons become a little more sanguine for Old Media. Not to be the ten millionth person to say this, but the only company, in my mind, with any significant revenue model based solely on the Internet is Google because it leverages the pre-existing notion of most users that electronic content should be freely available. Even with that, Google will grow substantially, but it will not necessarily take Old Media out to the woodshed over the next five to ten years.

    Last thought on this: Old Media generates cash precisely because it is conservative, and that is not such a bad thing. All the bad ideas that were chased by money during the Internet Boom did not bring the entire media industry down with them because the industry had even more money behind safer, content-driven bets. That is how the beast is harnessed.

    2) Old Media content providers adapt to new opportunities: there is enough evidence out there that old media has responded to opportunities to use the Internet and electronic content to reach out to their customers and grow their business. The best example is in professional publishing, where publishers focusing on the finance, legal, and medical sectors have highly profitable revenue models for distributing electronic content that is current, indexed, and relevant. In other media sectors, sure many companies have fumbled looking for ways to bring electronic content into their services (let alone get paid for them), but enough new media efforts have fumbled as well. (We always see new media successes but rarely pay attention to the failures.) For many segments, the Internet’s advantages of search and updating are necessarily huge advantages (poetry for instance?). In the end, the democracy of ideas gets tested in the crucible of the marketplace. It is true that to grow, old media companies must be leaner and more nimble to avoid the risks of overinvestment. Somewhere between that state and the seed-capital status of new media companies lies a stasis point for where today’s media companies will be become market leaders in the future.

    3) Print is not dead — Print still lives, even among those of us with broadband, blogs, and blackberries because of the other three B’s — beach, bedroom, and bathroom (I’d include commuter trains too, but it doesn’t start with b). The format of print is cheap, portable, reliable, and familiar, four huge advantages over electronic content. Its ubiquity also means that the “content platform” isn’t held by one hardware or software vendor but is open to everyone. Paper is the world’s original “open source” medium. Working for a large printer after moving from an electronic content publisher, I can vouch for the continuing impact of paper-based content. I always hear that print will be dead in 10 years, but every year I hear that quote and nothing changes. I visit blogs and use the Internet more than anyone I know and I still read printed magazines, newspapers, and books.

    Just my three cents.

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