No more wire hangers

The Wall Street Journal reports that Time Warner is thinking of reducing its stake in cable because access will be commodified. Well, at long last, a good decision.

I’ve been arguing for a very long time that cable is not a business with a long and good future. Access to media is going to be a commodity, no longer a monopoly that makes money thanks to its exclusive control of content.

I argued this as long ago as 1990 — and argued it inside Time Warner itself. In my time as a Time Inc. executive, as creator of Entertainment Weekly, I went to my one and only corporate retreat in the Bahamas via the company Gulfstream. The then-executives of the company were bragging about having just gotten rid of their paper manufacturer, Temple Inland, which their predecessors had bought because they thought that as consumers of paper, it’d make sense to own the trees. The bosses now said it made no sense to own those trees.

But they went on and on about the wisdom of buying cable instead. I raised my hand at their dinner bragfest. (This will give you some understanding of why I did not last as an executive at that company.) I said that it seemed to me that owning cable was only the electronic equivalent of owning trees: You were owning a piece of the distribution instead of a piece of the real value.

After saying this, I was practically set adrift on the Atlantic in a rowboat. They scowled. They shook their heads. They moved on. They made plans to get rid of me. What a young fool I was.

Well, it may have taken 17 years, but I was proven right and all those scowlers and cable-buyers are gone: Cable is trees. Nobody wants to own trees. In the meantime, Time Warner has decided it wants to own content instead. But I’ve argued that owning content also has no real future. For that matter, owning isn’t a verb with value. Enabling is what you want to do. Google doesn’t own. It enables. MySpace enables — and its vulnerability is that it still owns and controls. Craigs List enables. YouTube, Flickr, FaceBook enable. Pure enablement is the model of the future, I think.

So what media should a media conglomerate own, if not cable? Newspapers? Ha! TV stations? You have to be kidding. Magazines? Stop, you’re killing me. Networks? Nope; they all accrued their value by controlling a scarcity that no longer exists.

So I’ll repeat the question: What should they own? AOL? Oh, that was below the belt. No, I wouldn’t want to own AOL or Yahoo or even MySpace. They try to control. And controlling will not work in an economy that is based on handing over control, of distributed control.

What enables instead? Hmmmm. Google. YouTube. DoubleClick. Blogger. What they have in common is as obvious as Google’s strategy: They enable. No more trees. No more wire hangers.

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  • http://deleted Tansley – addendum

    Please see my comment on your previous post (“Will Paper kill the Papers?)…it’s just as relevant, here.

    It occurs to me, Jeff, that you really have a golden opportunity, here. You’re typically WAY ahead of the curve in terms of the thinking needed to ‘make it,’ in the current techno-cultural revolution. I really hope you’re spending some time reassessing your retirement portfolios, and you should certainly devote some time to considering a start-up of your own, in some capacity. I mean, the blog-thing is great, don’t get me wrong… but you have the potential, it seems, to create a company that would make Time/Warner look the way the horse and buggy appeared after Henry Ford perfected the automotive assembly line…

    I can’t be the only person who sees this…can I?

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  • Ben

    My problem with this philosophy:

    Good content takes ability to create. Ability takes time and discipline to create. Those who possess the ability to create good content want (and deserve) compensation in exchange for practicing their craft. In this socialist commune of free content love, who pays the artist? Or is the “starving artist” not only a cliche, but an expectation?

    Scott Adams of Dilbert fame has some words on this subject… http://dilbertblog.typepad.com/the_dilbert_blog/2007/04/the_infamous_un.html

  • http://amomentwith.typepad.com/ Easycure

    Why can’t government take on the same attitude? It should!

    Enable, don’t control!

  • http://amomentwith.typepad.com/ Easycure

    Um, Ben:

    In a capitalist society, it’s up to the artist to earn his pay by marketing himself. It’s what we ALL do. Why should artists get a break just because they are “artists”?

    I’m an architect, and I get paid by people who appreciate my particular talent. It’s no accident. I earned it myself.

  • http://deleted Tansley – addendum

    Ben makes an excellent argument, as does Scott Adams. Without remuneration, content quality will inevitably drop, bringing it all down to the lowest common level, eventually. What to do? Well, some time ago I commented here that it was virtually impossible to protect content exclusivity, but I had forgotten Microsoft’s DRM (Digital Rights Management) technology when I made that comment. DRM is proving to be, to date, THE most successful form of online content protection. The method is comparable to some sites that encapsulated their content in password protected archive (ZIP) files. You paid for the password, after downloading the file, and you were then able to open the archive file and view the content. DRM works along similiar lines, but more ‘behind the scenes,’ using an electronic shell-and-pea game to prevent piracy.

    One problem with DRM is that it’s been cracked….well, half-cracked. Hackers have learned that the DRM protection can be circumvented, but at a price – namely, the price of the initial purchase of the file. Once the ‘primary level’ of DRM protection is bypassed with a purchase, the file can be processed for free re-distribution. What it comes down to at that point is how willing is the hacker to redistribute something which has been paid for, most likely out of the hacker’s own money? Hackers aren’t generally philanthropists, so this technique hasn’t exactly caught on in a big way, as yet.

    Another excellent method of content protection has been the use of new codecs that separate streaming image from the accompanying sound. Heretofore clever people who’ve known where to look for downloaded cache files have found, to their dismay, that this new file format loads into their players and gives them a soundtrack, but no image. This is less effective than DRM, most likely, and will probably be circumvented before long.

    It’s likely that Microsoft will continue to work on improving DRM, possibly by adding additional layers of encryption, or by ‘time-bombing’ the files, as Stephen King once did with an original work he made available for download – after _/_/_ the file will simply cease to be readable or usable any longer…a very clever technology, often used by software manufacturers for demo versions of their programs.

    There ARE methods of content protection, for those willing to take the trouble to incorporate the technology into their file production. The OTHER problem with DRM, though, is that you have to pay to lease the rights to use the technology from Microsoft. I’ve no idea what that costs, but it’s not likely to be inexpensive. Some codecs for video and audio make similar requirements of those seeking to use the technology – but this is only fair, since, after all, the better the quality of the technology to protect content, the more worthy the creators of said technology for gaining remuneration for their efforts.

    The flipside of this is going to be the widespread reporting that Jeff has been talking about in earlier posts – a news event happens, people on the scene whip out their GPS phone cameras and suddenly you have X number of live feeds of what is going on at this very second. Who owns THAT content? The owner of the phone that captures the best image? The manufacturer of the phone? The service that leases the phone bandwidth? The news service that options the content for redistribution?

    One thing about all this is certain: lawyers are in no danger of losing their jobs…

  • Sebastian

    “Google doesn’t own. It enables.”

    hahahaa…oh man, you have a 7th or 8th career as a tech comedian if the whole thing goes belly up. What say ye when Google owns the entire advertising market?

    Ask the Dodgeball kids how ‘enabling’ an ‘owner’ Google was.

  • http://cinepinion.blogspot.com H. Stewart

    “Without remuneration, content quality will inevitably drop, bringing it all down to the lowest common level”

    Balderdash! I know I’m going to come across as an idealist here, but if artists stop making (big) money that’s not going to spell the end of quality art as we know it. While compensation makes it easier for artists to create by providing financially security, plenty of ordinary people everywhere, working day jobs, are still making extraordinary art without making a living off of it, and without ever expecting to. In fact, without the promise of a big pay check, a lot of the hacks populating the airwaves (radio, tv, etc.) would probably stop polluting the earth and the general quality level of music, for example, would probably increase exponentially because it would be made by people with a real passion for the medium, people unlike Scott Adams.

  • Ben

    Scott Adams definitely falls more to the business end of the spectrum, but even a true artist like Bill Watterson (“Calvin and Hobbes”) expected remuneration for his art. Even if he had the integrity not to get rich off licensing fees, he definitely expected to be compensated. Do you think the quality of his strip would have suffered if he was doing it for free, or if he was trying to squeeze it on top of a 40 hour work week? It’s a fine line, to be sure – passion for the craft has to be the primary objective, not money, but an artist has to be motivated to be at the top of his game, just like any other profession.

    I guess the bottom line is while Jeff’s theories apply well to journalism (which is an art in its own way), they break down when you apply them to other facets of media and entertainment. “House, MD” is one of my favorite shows on television right now, and “The Departed” was one of my favorite movies this year. I derived immense pleasure from both, and both were put together by crew of professionals who’ve worked long and hard to be the masters of their respective crafts. For this, they probably expect (and deserve) a little compensation.

    I will now step off my soapbox.

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  • http://www.freemoneytricks.co.uk/forum Glen Hockburn

    you think by now someone would make an easy way to hack newer phones, an app – one for all kinda thing. just my thoughts, if you get a min take a look at my site, hopefully you’ll like :)