Cable Guy Says Portals Are Toast
Leo Hindery is a cable guy. He’s always been a cable guy. He was the head of TCI which eventually got bought by AT&T and became AT&T Broadband. Later he was head of GlobalCenter and was there as that telco bubble-era play popped. Paul Kedrosky is now pointing to coverage of a speech he gave today, suggesting that “portals” were going to die off. His claim is that there are 3 major industries in the new media landscape: portals (Google, Yahoo, etc.), content providers (Time Warner, Disney, etc.) and distributors (telcos, cable cos, etc.). Like a true traditional cable guy, he thinks the portals are simply taking money that belongs to the other two — and they’ll simply take that back. This isn’t surprising, based on where he’s come from, but it shows a distorted picture of the world. It is, though, the same argument that was made back during the first dot com bubble era, when the cable companies all thought they could compete with the Yahoos and Netscapes of the world with their own portal called @Home. That went really far.
The fact is, right now, most people look to their broadband provider as nothing more than a pipe. They want the pipe separated from the rest of the content and services that are offered. Fewer people are using the email and web space their broadband providers give them — knowing they can just get a Gmail or Yahoo mail email address and webspace and take it with them when they eventually switch broadband providers. People generally don’t like their cable company or their phone company. It’s rare to hear anyone talk favorably about them. The less beholden they are, the happier they are. Of course, at the same time, Hindery seems to (again, like a traditional cable guy) completely discount the fact that people go online for communications just as much, if not more, than content. People aren’t going online to get Disney or Time Warner content — but to email with people, to instant message with people, to read and post to blogs. It’s about communications (what some like to call “user generated content” these days) and what Big Content does is a lot less interesting. Every time that a big content company or a big broadband company has tried to get into the space of providing these services themselves, they’ve failed. Because they always look at how they can control it and how they can charge more for it. Hindery dismisses the portals for not having proprietary content — but apparently he hasn’t paid attention to what happened with AOL (which is owned by a big content firm) as it tried to keep its walled garden up while others pulled it down. At the same time, it’s not surprising to hear him totally dismiss things such as VoIP and user-created videos, by saying they’re not disruptive because they’re “free.” That’s almost a laughable assertion. It’s the fact that they’re free that makes them so disruptive — because it totally flips over the business model that he’s used to. He doesn’t seem to recognize that just because something is free it doesn’t mean there’s no business model.
[Techdirt]
I have to say that no matter what the policos say about how Net Nuetrality wouldn’t of meant anything. Or that Google and others are being extremist and don’t need to worry about “tiered levels” in service. Then they haven’t seen the phone Company and Cable companies talking. They want to profit off something that they can’t own. There are fiber providers (and Wireless) that are moving into the area. I think it’s about time to say bye bye to the phones (have cell phones… why do we need a land line?) and cable (Dish and Direct TV are both cheaper and offer more).
Tags: Interesting, Internet, Irony, Legal, Networking, News
