peter martin

bijan:

I try not to write about why big media is broken or needs to be fixed. It’s complicated and there is huge money at stake.

But I’ve been part of a number of so many conferences, dinners and meetings on the subject lately. I just can’t keep still (read quiet). And I hear that “analog dollars vs digital pennies” thing one more time….

First a few things.

1. I don’t think big media is stupid. There are amazing businesses built from big media and I love their content.

2. I don’t believe that all big media has the same shortcomings and risk (sig difference between newspaper woes and that facing cable networks and msos)

3. i believe that content owners should be paid.

Okay, with that out of the way, let me share some thoughts.

I believe that big media could learn a lot from the software industry.

The software industry has changed tremendously over the years. It’s clear to me that the old traditional software approach (expensive, finsihed goods, big licenses, piracy risk) is long for this world. MSFT knows this and they are trying to reinvent themselves (I give them credit for that).

The busines model for great software has changed. It’s about open source (mysql), it’s about open api (twitter), it’s about professional services (red hat), it’s about advertising (google), it’s about subscription services/asp (amazon s3/ec2) and it’s about bottom up (salesforce.com).

Why did this happen? I could write a long blog post on that but there were market pressures combined with innovation. And the old model simply wasn’t going to scale.

The best part about these new models is they created bigger and new value for end users, developers and creators. New entpreneurs could build new things. New businesses could bulid new things. People & companies are making a living with these new models and it’s working.

Consider the iphone app store. if they kept it closed they would have sold less iphones and less developers would be making money.

I’m sure MSFT would’ve liked to remain in the old world forever but wishing for it just doesn’t make it so.

Big media needs to learn from this. Instead of fearing the internet they need to think about a world where every home has 100Mbps up and downstream. And my mobile device will have it too since it has wifi. And cellular will give me 10mbps downstream at some point in the near future as well.

And that is a good thing. More distribution and faster pipes is a gift.

Big media needs to take that and run. Create new forms of content, new packing, new distribution, new business models. Just like the software folks did.

Don’t hide. Time to put stakes in the ground and build the future.

—

ps: there is a lot the tech community can learn from big media. I’ll cover that in a future post.

Excellent points, and one more thing I would add. These big media companies are falling into the same trap that the music industry has: they can’t decide whether they want to be content producers or content distributors. NBC and Fox are trying to limit the innovation at Hulu, which has proven to be a legitimate distribution network for their content, because it overlaps with their own distribution network. If they could just concentrate on creating great content and being platform-agnostic, they would eventually find a way to make plenty of money through new channels…but they can’t, because their conglomerate business model is so dependent on the legacy distribution network, just like the record companies.

Twenty years from now, there will still be content producers and there will still be consumers. They are eternal and necessary. Distribution networks and middlemen are not, and will continually be replaced with better systems through the gradual process of evolution and the violent upheaval of revolution.