The Mouse Trap

This week, my Business 2.0 column dealt with the Comcast-Disney merger and why it is a risky strategy for Comcast. It is my firm belief that the Cable companies future is is communications, not content. They have an incredible pipe which can and should be leveraged for all sorts of services – from phone, broadband, and oh yeah video! If Comcast keeps increasing its pipe footprint, even the largest content creator such as Disney or News Corp., would have to do a deal with them. Why content is pointless in this day and age, I called up an old friend. And he knows a thing or two about content.

bq. Chasing content is an archaic strategy, says Andrew Odlzyko, director of digital technology center at University of Minnesota. “To me this shows that continuing preoccupation with the content. I think they (carriers such as Comcast) would like to deny the control to users but they will not going to win,” he says.

A firm believer in the concept he points out to two comparable industries: cellular and cable. In 1997, cable TV business had sales of $30.8 billion while cellphone carriers brought in $25.7 billion. From 1997 to 2003, the cable companies revenues have increased to $51.3 billion while cellular sales in the US have ballooned to over $93 billion, according to data from research firm eMarketer. The wireless guys are not really selling content – instead they are making money off their pipes. The users, who make calls create their own content – i.e the conversations between all of us. (Read: Is Voice the ultimate Paid Content?)

Martin thinks otherwise when he writes: “To state this another way, telecom is about creating a unique distribution system for user-generated content, and a cable/media service is about creating a unique distribution system for professional media content. Similar, but not necessarily propelled by the same strategic imperatives.”