It would seem my ideas or the possible implications about the upcoming (hypothetical) changes in the way the web is both used and/or allowed access, to or by service providers is becoming more prescient than I first envisioned.
Today it was announced that the cable giants Comcast™, and Time-Warner™ have plans to merge with Comcast buying the former for around $45 Billion or there about. One might look at such a merger through the same prism as earlier media giants joining, then basing their presumptions on why things will be better in the end for shareholders through “synergies.” Which we know from example after example never seem to materialize.
The landscape is littered with these types of mergers. Need I remind anyone that Time-Warner itself was once part of the AOL® family via such a scenario and how that went? However, this one just might be a little different, and more meaningful to everyone. (And I mean everyone. i.e., Content providers, web-sites, blogs, all the way through the chain.)
For years these providers (the broadband owners) for good or ill have been at the mercy in some ways by being responsible for the infrastructure and delivery vehicles or methods to the public at large, much like a utility company. Yet, unlike most utilities, the revamping or updating of the infrastructure used by the very companies (content providers) that both use, and at times, can tax the system with through-put to the end-user seemed as if the infrastructure wasn’t part (nor should be) of their concern.
More or less these providers acted or thought they had no monetary responsibility to pay extra for anything else in the way of user charges as to help cover these costs. After all, they were the “content” and if they didn’t have something customers wanted to see, then the cable companies wouldn’t need to improve or expand. (Yes I know this is a gross oversimplification or generalization but for this argument it makes it simpler to contemplate the bigger picture in my view.)
In some ways it’s a little, “chick or the egg” type scenario. i.e., If no content, why the need for cable? Butted up against the argument; if no cable who sees your content?
Although both have a responsibility to each other in the end for one is dependent on the other at this point in time. One thing has changed and becoming a little more than clear: With the change in the Net neutrality decision: The power of who, how much, when, or if, has gone from a neutral hand to the providers hand. i.e., The broadband infrastructure owners.
In my post: The Next Segment Of Luxury – Subscription Everything (You can read the full article here) I made the argument that everything as far as the way the web now works, and or is made to work in the future changes. And not a subtle change either. Everything as far as pricing, availability, delivery, and more – changes or, can change. Period.
Let me make more of my argument using just this one example…
If this merger is allowed to go forth. (There’s always congressional approval and other stumbling blocks that must be made in deals such as these.) The new combined entity will control 1/3rd of ALL U.S. households broadband cable service. Does one think with the new law passed which now gives them the authority to treat URL’s differently, or proportionately as they see fit any coincidence on why such a deal is made now?
Sure it’s been in the works for a bit, however, that is how these things work. If you get the favorable ruling you march forward, if not, you say, “Oh well” and move on. Well, the ruling is now – law. And that law does one thing different from any laws previous. It gives the cable providers dominion over their pricing models via URL’s access/speed . And that is a game changer.
In many ways content providers have had the edge. Now? This turns those tables. As I’ve stated before, think of it from this perspective: ESPN® wants all their new and fancy fantasy stats, video replay options, ability to watch multiple games in multiple picture in a picture capabilities, reports simulcast from other areas and more, all on one television screen or through a mobile device – live. (This is all hypothetical for this argument)
Last year ESPN could build all the backroom technology to do it, then just pump it out in a firehose type fashion to the cable operators and, let them be responsible to get it to the end-user. (That would be you or me) Today? The broadband providers can say: “Ummmm, Hey that sounds like some great stuff you want to do. But it’ll now cost you. And, as far as all the bandwidth you’re pushing at us currently? Ah, well, we need to sit down and maybe renegotiate our fee schedule.”
You can make this argument for Netflix®, Amazon Prime®, Roku®, Apple TV®, and the myriad of others. Suddenly, the web that was putting cable operators into the back seat has found that quite possibly this new law hasn’t just allowed them to ride shotgun. Rather, has put them into a brand new vehicle they control with a shotgun! As I said, this could be a change of dramatic consequence.
Another voice on this very topic is Mark Cuban. Recently he posted an article on his blog titled: App Neutrality Should be Part of the Net Neutrality Discussion Jan. 19, 2014 (You can read the entire post here)
I believe this is a topic that anyone who either aspires or takes entrepreneurship seriously should keep up to date on. For as many know. The web can more than empower a business when used effectively, however, in today’s rapidly changing regulatory environment – It can cripple the uninformed or naive entrepreneur just as quickly.
One needs to not only know what’s going on today, but where things may go tomorrow as to be ahead of your competitors to adjust properly or proportionately.
© 2014 Mark St.Cyr