Keeping access open to all
Originally published: October 26, 2009
Last updated: October 26, 2009 - 3:27pm
[Commentary] The idea that "content is king" is a favorite slogan among media people, since it's comforting to think that the industry is ruled by its creative side. Comforting, but fictional. Who does rule the media kingdom? Not the content creators, but the people who control their physical access to the public, that's who. Sooner or later, channels trump content. That's why people who care about freedom of expression have to start by caring about the freedom of the channels over which expression flows. Hence the importance of the simmering controversy over so-called net neutrality -- a policy that is intended to keep the companies that rent us access to the Internet from playing favorites among Web services, information exchanges, content providers of all kinds. Why does that matter? Because the pace and direction of media development have been historically set by the people who controlled the contact points with the public.
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Contrary to the Miami Herald, channels are content aggregators and generally do not provide physical access to the public.
Further, if market power solely resided with "the people who control their physical access to the public", such as broadcasters and cable companies, then content suppliers would not be able to claim such a share of total revenues, nor would have been able to raise their rates the way they have. Eg, Saul Hansell reports that programming represents cable's fastest growing cost (http://bits.blogs.nytimes.com/2009/05/01/the-problem-with-cable-is-television/).
It may be that content aggregators and suppliers of physical access to the customer have some market power, though the case that this is so for the aggregators is, at best, quite weak. Similarly, in many markets, it is not obvious that broadcasters can be said to have material market power.
Thus, if you start with two basic facts that are wrong, that content creators like Beyoncé and the NFL do not have market power, and that channels control physical access to the customer, and add to that a too broad characterization of the power of the owners of physical access, your resulting analysis and recommendations will not be worth a pinch of dust.