FCC Chairman cites what broadcasters don’t get

FCC Chairman cites what broadcasters don’t get
FCC Chairman Michael Powell told the San Jose Mercury News: “I have no problem if a big and venerable company no longer exists tomorrow, as long as that value is transferred somewhere else in the economy.” Hello? He’s talking about you, broadcasters (among others, to be fair), and he bases this thinking on what he calls the most powerful paradigm shift in communications’ history.

Now to be a phone company, you don’t have to weave tightly the voice service into the infrastructure. You can ride it on top of the infrastructure. So if you’re a Vonage, you own no infrastructure. You own no trucks. You roll to no one’s house. They turn voice into a application and shoot it across one of these platforms. And, suddenly, you’re in your business.

And that’s why if you’re the music industry, you’re scared. And if you’re the television studio, movie industry, you’re scared. And if you’re an incumbent infrastructure carrier, you’d better be scared. Because this application separation is the most important paradigm shift in the history of communications, and will change things forever.

He’s right, of course, but most broadcasters don’t get what he’s saying. As a result, the threat to the entire industry increases with each passing month. Broadcasters will get by in 2004, thanks to the Olympics and the elections, but 2005 will be crunch time, as the disruptive innovations to which Powell refers take their toll on audiences and their accompanying ad revenues. (Source: The Buzzmachine)

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