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.
