The future of the Internet always seems to be described in terms of the death of something else. Newspapers are dead meat -- why wait for printing ink on paper when you can get it on your screen almost instantaneously? Television will join the dodo bird when everything streams as zeroes and ones.
I don’t believe it. Yes, there will be changes from the status quo ante Net, but the status quo media aren’t going to disappear. I’ve got enough gray hair to remember when television was going to destroy radio and when cable television was going to be the end of broadcast television. I’ve even heard the stories told of the early days of radio when it was forecast that music over the air would destroy the sheet music and musical instrument businesses. Those goners seem to still be around.
So allow me to take the contrarian view and argue on behalf of the Old Media. I have a hard time, for instance, believing Rupert Murdoch spent $5 billion to buy the print-on-paper Wall Street Journal so he could either watch it die or quit printing. The same guy who owns MySpace still buys ink by the tank car all over the world.
The same holds true with television broadcasting. Here’s an amazing fact: The TV broadcasters convinced the U.S. Congress to give them new digital spectrum while everyone else (like the mobile phone folks) had to pay billions for similar airwaves. The new televisions required to receive such transmissions, however, have no antennas. When it comes out to the box, your new HD flat-panel television couldn’t pick up one of those digital broadcast signals if your life depended on it. Over-the-air broadcasting may be going away as a way to deliver to consumers, but the market isn’t the consumer -- it is the delivery of the additional content enabled by using digital airwaves to deliver to cable systems.
Therein is why no one is going to die (at least the smart ones) from Internet-driven change: When the world changes, you change too. Web 2.0, Google (Nasdaq: GOOG), Apple Inc. (Nasdaq: AAPL), and the others may get the headlines and may make a new crop of billionaires, but Old Media with a modicum of smarts aren’t going away.
The future of the Internet, therefore, will lie in how it is exploited by the Old Media, not how it buries the Old Media. I believe this so strongly that I’ve bet on it. Here are a couple of examples.
A high proportion of 18- to 34-year-olds watch television while they are also on their computers. Watching a sporting event and want to see the statistics (or arrest record) of the person who just scored the points? Just search. Watching the news and want to see how President Bush’s rationale for the Iraq War has changed yet again? Just search. Thanks to the Net, television is becoming a two-screen experience. That’s why my firm, Core Capital Partners , invested in a startup called Jacked.com. Jacked “knows” what is on your TV and does the search for you, automatically. And who was Jacked’s first user? The Old Media NBC Sports. Just think about it: NBC has created more opportunities to sell ads on a second screen because they see the Net as additive, not negative… and they’re providing a better experience for their viewers.
One of the problems with the Net is that the delivery of information has expanded exponentially, but the bandwidth between our ears has not. I co-founded SmartBrief, a news filtering and summarizing service for industry verticals, in order to overcome this problem. Today a million and a quarter people get their daily business news pre-sifted and summarized via SmartBrief. If they want to know more, it’s just a click away to the source. But if they want to maximize their mental bandwidth, it is done for them. And who are the champions of this service? Publishers like The New York Times, which understands the editorial function’s importance increases as the amount of information increases.
The Internet has brought a wonderful new generation of capabilities and services. It will destroy those unwilling to adapt to its changes. But this ain’t buggy whips, this is evolution. The Old Media is dead. Long Live the Old Media!
— Tom Wheeler, Former executive director of the CTIA and long-time head of the National Cable Television Association; now a VC with Core Capital