Ryan Lawler over at Contentinople reports that there are in fact skeptics over the common sentiment that content is king. According to a Lehman analyst, the ability to monetize digital media assets is likely to be counterbalanced by a an accelerated decline in traditional media. Now, some readers might recall a post of mine a few weeks ago where I argued that neither content nor pipes are king of the internet. I feel that the Lehman analyst’s comments fall in the same vein. Owning the content is important and great content will always be valuable, but the shift from one pipe (cable/broadcast) to another (internet) doesn’t necessarily benefit you. There are only so many eyeballs, so many minutes that people will be entertained by TV or movies etc. The overall market may expand and evolve, but you still face offsetting trends.
The next killer apps (and wannabees) will solve the problem of how to distribute that content to end users. Not how in a physical sense, but how in an application sense – finding, choosing, switching, interacting, etc. Build a better application and the users will find a way to funnel the content they want to see through it. All you have to do is beat Cable TV, which hasn’t really changed much in 30 years, and pay per view TV, which hasn’t changed much in 20 years. If you build that, you can ride a single trend, upwards.
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You make it sound so easy. It’s so easy that its complexities point to application providers as you state. A lot of software applications, I’m sure. I’d leave solutions of this magnitude to names including Microsoft in this regard. It has been more than eight years now, since seeing Bill Gates’ software solutions across the model broadband home MSFT engineers were devloping. Wouldn’t it be nice if they placed a value on the importance of the internet backbone from which their application bits travel into, out of and all around with?
Good point, Carlk. All too often focus goes to the first mile component, since that is the point of sale, especially now that most connectivity is vertically integrated.
Decoupling the network segments might go some distance to returning perceived valuations where they are actually deserved.
The status quo of where value is perceived, in other words, arrived quite by accident as an unintended consequence of vertical integration, in a sense. End users don’t pay backbone providers directly, in other words. Maybe they should 😉 They perceive the value to be where they make their payments, and in perception lies truth, as it were.
Call me Carl, Frank. 🙂 You are so right about this lack of perception in the marketplace today. Perception becomes reality. 🙁
I am a firm believer that, we need a special event that will act like a 2X4 on top of the heads of these numbskulls.
Who or what will that be?
Since those benefitting from cheap transit might not want to admit its amazing importance or value for delivering bits as they have been, I prefer my answer to be a “who” rather than a “what.”
For example, in the 1907 Crash, we had J.P. Morgan in all his strength and glory act as the confidence builder for changing market perception, as it was then.
This is the wrong thread, but, we’re back to Rob’s, “Level 3 and the Buffett Factor” subject.
Give me Buffett or give my Gates, since they would garner the respect of this market for choosing this company. Of course, Buffett would work best as the 2X4 which I reference.