Recognizing That There Is No Difference Between A Media Company And A Technology Company

from the go-wide dept

The day after Google bought YouTube, we pointed to Andy Kessler’s take, that this was a realization that the media landscape was changing. That article was actually the introduction to a series from Kessler trying to define just what this new media landscape was all about. It’s a worthwhile read. He first lays out that the traditional media business was all about owning the pipe in some manner. Whether it was TV, newspaper, radio or magazine, the media moguls owned the channel and had more or less exclusive control over what could be delivered. That exclusivity was where the money was made. In the second part, he points out that such exclusivity is being wiped away, and is being replaced by “horizontal” layers, rather than vertical top-to-bottom control. This is almost identical to what happened in both the computer and telecom industries, which used to be about delivering complete solutions from one vendor, and are now much more about piecing together best of breed offerings that plug together nicely. In the third part, Kessler notes that there still are virtual pipes that form within the structure of the larger internet cloud, but to some extent each of those virtual pipes is simply one of those horizontal layers described earlier. So the final piece basically recommends embracing the layered approach that builds a virtual pipe within the context of the rest of the internet.

There’s plenty to think about in the series, but it almost feels like the final piece is holding back a little (so unlike Kessler!). What he describes isn’t revolutionary, by itself. It’s yet another way of recognizing that the power of the internet is in the ability for distributed pieces to work together as components that communicate, and that the way you dominate is to become the platform which everyone else uses to connect and communicate. What I think (and I could be wrong), Kessler is really getting at, is that the advancement of technology hasn’t just blurred the boundaries between media and technology companies — it’s shown that there is no boundary at all. There’s been a long argument over whether or not Google was a “technology” company or a “media” company. After reading through this, you realize that there really isn’t a distinction any more. Any media company now needs to be a technology company, and any technology company really needs to be a media company. That means that the rules that govern one now apply to the other. While that may make things tough for some who are used to doing things “the old way,” it also means that there’s a pretty clear roadmap for how things play out. What happened to IBM and AT&T in the past is now happening to the media companies. How they survive is an open question, but as with the technology world from the past few decades, it also means that the opportunities are huge, and will likely be seized by newer startups rather than the old guard.

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Comments on “Recognizing That There Is No Difference Between A Media Company And A Technology Company”

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GaryV says:

difference between media and tech co.

I suppose the significant difference is that the media companies, whether newspaper, TV, books, magazines,movie, radio etc, create (and sometimes buy/license) content. It so happened they also owned the pipe or the delivery system at one stage.

Google might have bought yet another pipe, i.e. youtube, but they still don’t own or develop content. Its easy to distribute “borrowed” or mashed up content with problematic copyright provenance but when they start spending money buying up content companies or set themselves up to develop content is when they will face the same problems that the content companies face today because of the digital revolution.

Tyshaun says:


I think your definition of a technology company is unusually narrow. I work for a firm that does embedded firmware for various industries. Nothing we do has anything to do with media (except for the one product which is a video processor) yet I would definately call my company a “tech” company.

Technology by definition is the application of science for the use of mankind, it isn’t just youtube and itunes. I sometimes wish that techDirt would live up to it’s name and cover the larger world of technology, not just internet companies, patent disputes, and DRM.

Mark (user link) says:

RE: define

I think that when he speaks of tech companies, he refers to companies in the broader sense – things that compete on the level of google, GE or other megacongolom size companies.

Niche companies, like yours (and ones I’ve worked for in the past) are more defined by the fact that they’re niche companies, not really that they’re tech companies.

For instance, 5Tribe, Inc was a company I worked on developing a couple data acquisition units for – they were primarily defined by the fact that they serviced the relationship between Media Groups and Auto Dealers (as well as a smattering of other assorted client types), more than that they were a ‘technology’ or ‘marketing’ company.


Jeff says:


The missing piece I think between MEDIA COMPANY and TECHNOLOGY COMPANY is Gatekeeping.

One role of media, as described in any mass media 101 textboox, is to act as a Gatekeeper. That is, the old-style newspapers, magazines, radio shows and television newscasts had to pick and choose what content to produce. In picking and choosing, the owners of the media are able to decide what goes through the “gate” and what doesn’t… and only what goes through the “gate” is what is delivered to consumers of the mass media.

In part this WAS due to “limited pipe”… take for example a radio station…. the station only has one frequency and only 24 hours a day to transmit content.

However, this was not always the case. The reason that frequency allocation and licensing even came into play initially was that broadcasters themselves — specifically those broadcasters with a business model — requested that the government regulate the airwaves. Before regulation, manufacturers of radio equipment produced entertainment programs so that consumers would have something to listen to as an incentive to buy the equipment. Otherwise, without such programming, the radio equipment was of little value other than novelty for hobbyists. The problem was, without regulation, any hobbyist could pick any frequency he or she chose and begin broadcasting, which could wash out portions of a commercial broadcast. Without regulation, commercial broadcasters found it difficult to set up regularly scheduled programming and corresponding sponsorship.

The result was the early radio acts that preceded the acts that created the modern Federal Communications Commission and gave it power to regulate more technologically advanced or more modern communications.

But more importantly to the point of this discussion, this moment created the concept of a licensed radio station — which in turn enabled those station owners to become Gatekeepers.

However, even in terms of licensed radio stations which obviously only have 24 hours a day to broadcast, there is not TRULY such a thing as “limited pipe”. Perhaps the pipe is limited in terms of individual editors and news directors who only have access to a single channel, and often only a select time window on a single channel, but the true legal gatekeepers are not the news directors, but the station owners themselves. For this, one needs to look no further than station policies set up by owners for such things as what types of political advertising they would or would not accept — and subsequently led to further government regulation forcing station owners to have “equal time” for candidates’ commercials — and then later de-regulation after cable television had emerged as a viable alternative. A more modern example would be perceived biases such as FOX being a conservative news outlet. Clearly gatekeeping still goes on in media companies.

However, media companies truly do NOT have limited pipe. A station owner can choose to buy more stations and thereby expand its pipe. Truly with increased de-regulation, huge media companies have only gotten larger and now are able to own many different stations to accomodate their gatekeeping desires. However, in many cases, this has led not to increased diversity in news outlets, but just the opposite — one news source which runs the entire city, just masking it in different flavors of packaging.

The other thing to remember is that by being able to restrict the flow of information, gatekeepers are seen both as savior and bane. Gatekeepers, when working effectively, allow us to focus on the news that matters without having to sift through pages of junk in order to get to a paragraph of useful information. Gatekeepers, when working ineffectively, produce page after page of junk with very little if any useful information.

What this has to do with the Internet and the modern technological age of newsgathering, reporting and publishing is that we now have a new media which is emerging, yet another pipe that we can post gatekeepers at.

This is the critical difference between a MEDIA COMPANY and a TECHNOLOGY COMPANY. A Media company installs effective gatekeepers. A technology company installs none.

This is evident by companies that would exempt themselves from liability of user-posted content. That is to say, a company who uses a file-sharing network as its sole product and defines itself by that file-sharing network is not responsible for the content that its users provide. It can claim this by saying it is a technology company, that it does no gatekeeping, that its users are free to communicate without any restriction.

The reverse is also true. Techdirt is a good example of an organization that is a media company because its purpose seems to be to be effective gatekeepers and provide users with the “corporate intelligence” that is useful to them. This is just a fancy way of saying that the folks at Techdirt are good gatekeepers.

Because the file-sharing networks will forever shrug the liability of gatekeeping, and because the Techdirts will forever clammor for the responsibility of gatekeeping, it is clear that even in today’s world THERE IS A DIFFERENCE BETWEEN A TECHNOLOGY COMPANY AND A MEDIA COMPANY.

I think the greater point that this Techdirt article SHOULD have pointed out is NOT that there is no difference anymore…. but that there are an increased number of companies that are trying to ride the fence. But to actually say that there is no difference is blather more worthy of a publication that one might see on a supermarket checkout lane than here on Techdirt… unless of course the gatekeepers at Techdirt are attempting to redirect the course Techdirt itself is taking.

I said it in another post, and I’ll mention it here again. This is why Techdirt is in dire need of an editor. The reporting is excellent — but as someone who has worked professionally in a news organization, it’s clear that Techdirt could benefit by having a true editorial position… that is, having a person or group of persons whose sole responsibility is not in newsgathering or reporting. No disrespect intented, but being the Pres and CEO of an organization does not make one an editor if the editor still chooses to do his own reporting, thereby bypassing any editorial review of his or her own reporting.

Of course, one could say that it is the lack of gatekeeping that makes Techdirt more relevant or edgy. Yet the signal-to-noise ratio of Techdirt seems to be increasingly in the favor of the “noise” side of the ratio.

I’ve also heard it said that the Internet is forever changing the media world because we now can have everyone do their own reporting unrestricted by gatekeeping, and that this somehow empowers the public and enhances society. That if we restrict the information and put in gatekeepers in our Internet-based “news” organizations, that will somehow reduce their effectiveness.

This of course is complete b.s.

We are simply at the beginning of this media’s evolution, back in the same place that early radio was before regulation occurred, and when ham (amateur) radios were still popular before they were eclipsed by other communication methods.

I am not saying that we need more regulation, by the way; our current system of regulation and registration for web site addresses more than adequately gives each web site operator a “frequency” for its users to tune into and to distinguish its signal from the noise of other web pages.

The choice then, is not for government, but for consumers and for content providers.

Are you going to run a company of unmanaged ham radio operators, or are you going to run a company of managed content production? Or something in-between?

It will be interesting to see what choices Techdirt makes.

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