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How Big Content is beating back the threat of Big Tech

Sofia the First

Disney Junior

I will not be aggregated, only monetized, Disney Princess Sofia tells her animal friends.

At the New York Times, the always-worth-reading-no-matter-what David Carr has an entertaining take on why rumors of the entertainment and media industries' demise at the hands of disruptive technological forces are, for now, exaggerated.

Why? Because Old Media — in television and movies, anyway — turned in a better financial performance than the technology upstarts. I've characterized this as a battle between Big Content — Hollywood — and Big Tech, based in Silicon Valley. And according to Carr, Big Content actually isn't in full retreat [emphasis is mine]:

[W]orries about insurgent threats from tech-oriented players like Netflix, Amazon and Apple turned out to be overstated. Those digital enterprises were supposed to be trouncing media companies; not only is that not happening, but they are writing checks to buy content. 

[...]

Another thing about those dinosaurs is that they aren’t really old media in the sense of, um, newspapers. When their content is digitized, it is generally monetized, not aggregated. Having learned from what happened in music and print publishing, entertainment companies, built on the still enormous riches of television, have carved their own digital route to consumers.

Carr doesn't really address the long-term structural problems of Hollywood and other major content creators and distributors — that they are slowly seeing their monopoly on content distribution erode as the audience fragments and moves to platforms that are designed to host all forms of media, at extremely low costs to the platform-builders. 

However, his point about aggregation being trumped by monetization is critical. For a good example of how digitized content gets aggregated by someone other than the content originator, and then monetized by the aggregator rather than the creator, just look at Google News or the Huffington Post. 

Before it rolled out paywalls, a prestigious news source like the New York Times could have its content either algorithmically vacuumed up and aggregated under the Google News rubric; or summarized, re-written, fleshed out with internal links, and then linked to — in a dutiful but not necessarily prominent way — by the Huffington Post. 

In the latter case, even the a paywall doesn't really make much difference. The aggregator can get around that. The whole point is to become a one-stop-online-shop for what people are looking for in terms of information. Why surf when you can stay? And get all the irreverent HuffPo pop culture stuff at the same time?

Even I'm currently doing a bit of aggregation, by grabbing a few paragraphs of Carr's story and including them in this post. But I'm also putting Carr's reporting and analysis in the context of my own and making it relevant to one of my audiences — readers who are engaged with the question of why Hollywood and Silicon Valley can't get along.

Contrast this dynamic with what Big Content is successfully doing. As Carr points out, checks are being written to the entertainment companies, as technology platforms re-purpose content for a digital audience. The money — Money! — is going directly toward Big Content's bottom line.

Content may want to be free. But Hollywood doesn't, in any framework, want it to be.

In this dynamic, a company like Disney doesn't have to wait around for some follow-on value to emerge from contributing content to a Big Tech platform — the value arrives in the old-fashioned way, earned by having the enterprise that wants it, you know...pay for it!

It's clear that Hollywood has learned. Whether Big Content  will continue to be able to do business this way, as countless app makers and new platforms and even established players in Big Tech introduce new ways to consume media and do so at a ferocious pace. But for now, Big Content is holding its own.

Follow Matthew DeBord and the DeBord Report on Twitter. And ask Matt questions at Quora.

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