Hazlett in Financial Times: Content Kings Litigate to Retain Control
In cases where content and delivery platforms merge, the result is that content is spread in a legal manner and advertising revenues remain in control of the content owners says Professor Thomas Hazlett, writing for Financial Times.
"The content kings are litigating to remain in control of what they believe they own, and aligning with websites friendly to their view," Hazlett maintains, pointing to a host of new teaming efforts between content providers and delivery providers in attempts to secure larger shares of media revenues.
Content is king but the monarch has fled, FT.com, April 3, 2007. By Thomas W. Hazlett.
"The game's excitement factor owes to reality: it is rarely easy to set terms between partners. One response in the market has, therefore, been vertical integration. When one enterprise owns both the delivery network and the content that flows over it, no tricky division is needed. This approach sacrifices gains from specialisation, however. Our era is filled with examples suggesting these gains are large. They include the financial failure of the AOL-Time Warner merger, the dominance of independent (non-cable) program networks in cable and satellite, and the spectacular rise of Google.
"So impressively productive was Google's laser-beam focus on search that it amassed the wherewithal to diversify, ironically, acquiring YouTube. With more than 100m downloads per day, this popular website is caught in a torrid love-hate relationship with major content producers. They feel warm affection for YouTube when it generates new revenues, but tremble when video downloads discourage (now or in the future) paying audiences elsewhere. Of the relationship between Google and cable TV channels, a media magazine asks: 'partners or parasites?'
"Content owners like the BBC are both executing major sales (in this instance, creating three new BBC video channels for YouTube distribution) and monitoring their partners' unauthorised uses. 'The partnership hasn't changed our legal position,' states the BBC, 'and we'll continue to ask YouTube to take down content where appropriate.'