Jonathan Make of Communications Daily and Washington Internet Daily
(subscription required) has an interesting dispatch from the NCTA convention in
New Orleans, the annual conference of the cable industry. Back in the "olden
days" of cable, you could see Ted Turner wandering the halls and cornering
executives of local cable franchises, urging them to carry some crazy scheme
like a 24-hour news network. There aren't as many deals made at the show
nowadays, but it still draws interesting speakers, including folks from Congress
and the Administration.

In Make's coverage, the narrative begins with the ever-charismatic Sun
Microsystems Chairman Scott McNealy urging cable operators to embrace the
"social networks" model of individuals sharing creative works (ones they haven't
created) with other individuals. The problem, to many of the cable distributors
and creative works producers at the conference, was that McNealy offered no way
to monetize the person-to-person, out-of-cable-network, transmissions he was
proposing.

ESPN President George Bodenheimer, well-known as one of the pioneers in
producing creative works for cable networks, said it's going to be "an awfully
long time" before ESPN gives away what it sells to cable networks. ESPN has
tried all sorts of business models, of course. They have a magazine. They have a
free web site full of information, but you can also subscribe to be an ESPN
Insider to get more. They tried a branded phone wireless phone network; it
didn't work, but they get credit for trying. (Although not perhaps from McNealy,
because it was top-down and came with a fee.)

Time Warner Cable President Glenn Britt — another industry veteran — said
we're a ways away from seamless, portable distribution of content, but the
company is working on it, and Charter Communications CEO Neil Smit said there is
merit to combining the quality TV experience with the PC's interactivity.

Smit is of course right. And we are seeing a tremendous amount of
experimenting among producers of creative works. It was just a few years ago
that ABC surprised people by putting "Desperate Housewives" and "Lost" on
iTunes. Now you have Hulu,
every episode of the "Daily
Show" online for free, and rightsholders experimenting with P2P
distribution. As I've said before Digital
Hollywood and elsewhere, this market is still growing, and all of the
parties involved are still experimenting.

McNealy was an invited guest to NCTA, and it is appropriate for him to say
what he pleases, including offering business model advice to rightsholders. Of
course, copyright owners are constantly told that they are dinosaurs (a term
Prof. Florida rejects vigorously in "The Rise of the Creative Class") and that
they refuse to try new business models. They are also criticized when they try
those new business models, as they don't always reflect what the Internet
enables easily, that is multiple copies of one work, with no additional revenue
streams from it. (Sharing is increasingly a part of online offerings, but
apparently it should be the only model.)

Copyright owners are constantly
told their parochial thinking is causing them to miss out on new monetizing
opportunities, but the only models acceptable to these people don't actually
generate revenues, not sufficient to incent more innovation, anyway. Believe me,
copyright owners want people to enjoy their works, and they want to earn enough
to create more. To the extent there are profits to be made online they will be
there, as we're seeing.

Share this:

This entry was posted on Wednesday, May 21st, 2008 at 10:10 am by Patrick Ross and is filed under market forces. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.