Is Content Still King?

31 Oct, 2016 By: Thomas K. Arnold

I read an interesting article the other day on the Bloomberg website, from a columnist who argues that content is no longer king.

Shira Ovide, a Bloomberg Gadfly columnist who used to write for The Wall Street Journal, argues that with distributors buying content owners — first Comcast buying NBCUniversal and now AT&T proposing to buy Time Warner — and not the other way around, distribution is now king.

“We’re awash in content,” writes Ovide. “Sure, most of it is garbage, but this ubiquity splits people’s time and money into a zillion pieces. What is scarce is any company that has the attention or money of hundreds of millions or billions of people. Today, those giant human aggregators are distributors … that are the gatekeepers to digital information, communication and entertainment. Own the distribution, and you decide what content matters.”

I’m normally a big fan of Ovide, but in this case I think she’s wrong. I can point to her own argument: Yes, distributors are buying content owners, but doesn’t that underscore the importance of content? It certainly does not diminish it. Distributors know they need content more than anything; no matter how many pipes you have, if they’re empty, they are useless.

AT&T is ready to spend $85 billion to buy Time Warner because it’s the biggest content empire around — and AT&T is out to build the biggest distribution empire.

Ovide maintains that without distribution, content isn’t nearly the draw it once was, thanks to the proliferation of cheap, user-generated content like farting cat or Russian dash-cam videos on YouTube or your neighbor’s rant about traffic on Facebook. “Time Warner’s epic ‘Game of Thrones’ on HBO isn’t a hit unless it reaches people,” Ovide writes. “Today that’s mostly over TV pipes controlled by the likes of Comcast and AT&T’s DirecTV; tomorrow that may be over internet and mobile pipes controlled by the likes of … Comcast and AT&T.”

She certainly has a point. But at the same time, it could be argued that good content will always find its audience — and that audience will use whatever distribution channels it needs to in order to consume that content.

The history of entertainment has been driven by content and consumers’ quest to get it. The more content that became available, the more content we wanted to consume — and in an easier, faster, and better way. In music, we went from records to 8-tracks to cassettes to CDs and then downloads — the latter, a key factor in Apple iTunes’ success. On the filmed-entertainment front, we went from broadcast-TV to pay-TV and now direct-to-consumer streaming — the latter, driving ongoing media consolidation.

Without content, AT&T and Verizon would be content to remain phone companies.

And if content is no longer king, then why are Netflix and Amazon making so much of it?

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About the Author: Thomas K. Arnold