geert lovink on Wed, 5 Dec 2001 00:24:10 +0100 (CET)

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Re: <nettime> new media is so last year... (chenoweth on the direcTV deal)

(posted with permission of neil chenoweth)

Sent: Monday, December 03, 2001 11:16 PM
Subject: Re: Fw: <nettime> new media is so last year... (chenoweth on the
direcTV deal)

I agree with Jimmy Choi Kam Chuen (see below) that Rupert Murdoch would have
been a much more dangerous outcome with DirecTV.


PS  There's a piece kicking about on Reuter talking about John Malone
becoming the biggest cable operator in Europe, and taking over completely
that big Dutch group that he has a 24 per cent take in now, the one that
owns Austar in Australia.


I see the future of media being determined at three levels. The first level
is the advance of techonological expertise which continually reshapes the
range of what is possible, eg reading the future as a function of bandwidth,
the workability of conditional access systems to safeguard copyright, the
limitations of 3G, etc. I think it would be very useful to maintain a survey
of the profusion of platforms to keep track of what is technically possible,
what outcomes can be produced, and what can't. For example, 3G is still
technically challenging, and even if it performs to specification does not
offer the bandwidth to deliver video. The faster you go, the smaller each
cell becomes, to the point with ultra-broadband that the cell is about 50
square metres. So there seem to be some technical ceilings, at least for
now. These will probably differentiate between text-based media and video
based media. The bandwidth requirement for video on demand also appears to
be daunting.

The second level is the economic and financial process which will determine
which of these possible futures gain currency. For example the US for
historical reasons has difficulties moving to 3G. This opened a window of
opportunity in Europe, which was essentially closed by the size of the 3G
license fees raised by European governments which have crippled European
telcos. This is part of a  braoder collapse in the new-media economy. The
tech crash reminds me of the ubiquitous final scene from the Alien movies
where Sigourney Weaver ends up opening the airlock door to flush out the
nasty alien. As the air rushes out, the only survivors are those who hold on
tightly to handholds (and who are good at holding their breath). The tech
crash has wiped out a generation of alternative media, leaving only the big
media companies standing. The system has vented. It's not just that the
media start-ups have been killed off, but that the possibility of future
media start-ups has also been curtailed. In this post-apocalypse financial
environment, there is a new, much more threatening, media business paradigm
which needs to be analysed, based upon mega-mergers of old media companies.
At a third level, some of the tactical outcomes are determined by personal
interactions between a dozen or so individuals at the head of the world's
largest media groups. This is not so much a traditional fight between media
moguls, but the rise of corporate personalities, which I focus on in Virtual
Murdoch. Part of my goal was to set up a working model that would offer some
sort of moving prediction about what these guys will do next.

Coming at it from another direction, I think two parallel approaches are
required in looming at media. The first is to be tremendously cynical to the
rhetoric of change. In the short term nothing will change. The business
models do not work. Those in the corporate establishment who argue that we
are on the brink of great change generally do so opportunistically as a
means of securing short-term advantage eg in Australia the argument for
changing cross-media laws (on the basis that technology has changed the
nature of the media industry) is put most forcefully by Kerry Packer and
Rupert Murdoch, who would use such change to consolidate their empire.

But of course things will change. So at the same time we need a second level
of analysis which works backwards from the future. Despite our cynicism, at
some point in the future the rollout of broadband, and ultra-broadband, the
development of electronic paper and so forth, will profoundly change the
nature of media and information flows, and the media economy. Who are the
winners and losers, and what are the political, social and cultural
consequences? For example the ability to send television over the Net, to
remove the geographical limits to media vehicles, needs to be analysed. I
think that this is enormously threatening for local or national media.
Video-on-demand, cable channels over the Internet, receiving US television
directly from the US, all of these things pose major threats to local media,
and to local cultures. Local media uses a cross-subsidy of local and
overseas programming. If you fragment the audience and remove the most
popular  content, the financial base which allows a broad range of other
programming to be produced collapses. The local producer is reduced to cheap
programming like reality television and game shows.

As a post-colonial culture Australia is particularly vulnerable. Early this
century Australia was a major force in film production. This ended with the
sale of the major Australian cinema chain to a US group associated with the
Hollywood studios. The US-owned cinemas carried US films, and this killed
off the Australian film industry for decades. Distribution dictated content.
Europe and Britain have far stronger media cultures, which the ready
availability of US programming will not necessarily overwhelm. However, my
feeling is that this is only a temporary relief, that over time the process
of media colonisation will continue. A feature of the new environment is the
rise of format programming, like the development of the Big Brother concept,
or Who Wants To Be A Millionaire, or Weakest Link. These are concepts
developed in Europe, and copied everywhere around the world (with stunning
success for Rupert Murdoch in Europe). Actually the Australian-based Grundy
Organisation has been doing that with quiz show for Europe and the rest of
the world for decades.

If we have a picture of possible long-term outcomes, what are the short-term
goals to pursue? For example, how should one see the US legislative push to
uphold copyright, to enable prosecution of sites that offer software to
break encryption on DVDs, or prosecution of sites that point to other sites
that offer such software, to arrest employees of companies that have
developed such products . . . On the one hand, one may see this as the US
during Prohibition, trying to fight the unwinnable war. At the same time,
the security of conditional access systems are absolutely critical to the
continuing rise of the US media giants. Hackers will be (arguably already
are) portrayed as the major constraint on the world ascendancy of the US
media economy. They are anathema to the US national interest and I think
this fight is going to become much nastier. I would be looking for US
legislation that quietly brings hackers into the category of terrorists. For
the same reason, other societies instead might see hackers in a more
positive light, despite the disruptions posed for their own media economies,
because of the relief hackrs may offer by attacking the economics of the
encroaching American media.

Another approach is to look at long-term outcomes, and to see whose interest
it is to stop them. For example, the possibility of television-on-demand
over the Net (some time in the next decade) in theory will will wipe out
cable and satellite pay-tv operators. These distribution networks control
which cable channels are available and act as the middle man. If instead of
buying the cable companies' base package of channels you can buy just CNN
alone directly from CNN, in theory the cable company becomes just the
carrier. It is just a telco. And yet, after the tech crash, cable companies
have been re-discovered as the only viable business model for media. With no
viable rivals, the moves towards video-on-demand, interactive television and
television over broadband will be piggybacked on to standard cable and
satellite television sets. We won't even know we're on the Net, because it
feels so like watching television. If this is the case, the cable guys are
not going to produce a future where they are irrelevant. They will structure
a future where they remain at the centre of the universe.

Another impossible outcome where there is such diversity of media that there
are no mass advertising markets-actually no mass media-and the economics of
the entertainment industry has collapsed. Film stars' pay has been reduced
by a factor of 100. It's not going to happen. But it is fun to speculate how
it will be prevented.

> From: Jimmy Choi Kam Chuen
> Sent: Friday, November 30, 2001 9:31 PM
> Subject: Re: <nettime> new media is so last year... (chenoweth on the
direcTV deal)
> My immediate response to Neil Chenoweth's article is that Murdoch as well
as the Americans have to be stopped. According to his description which
probably is true Murdoch is already a media giant not measured against any
single American media company but against the whole lot of them in America.
That is scary. We are not talking about a media baron but a king now. I say
we have to watch for all of them and try every means to undermine or
countervail the power of all of them. No exception to Mr. Murdoch who has
invaded the media market all over the world and has been imposing his
influence. Being a Chinese in Hong Kong I was up set by his "censorship" on
his Satellite TV of stories unfavorable to the Chinese Government just
because he wants to break into the Chinese market.
> Whoever is the winner of the media war between Murdoch and America, we end
up as the loser. Mr. Chenoweth's article is an alarm for all of us.
> Choi Kam Chuen

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