….looks like we need better barriers to entry….
Yesterday Ken and I spent a fair amount of time in the offices of one of the major VC groups in the country.
We are trying to raise money for a kind of online videojournalist’s channel – a place where any journalist with a camera and a story to tell could post their work and get compensated in direct proportion to the number of hits their work received. A kind of eBay for news and ideas.
We think its a pretty cool idea. And so do most of the people we talk to. They only have one question: what is the barrier to entry.
That is, if the idea worked, what then would prevent someone else from coming along and building exactly the same kind of thing? Well, of course, there is not lots you can do to stop that kind of thing. Also, what would keep your best people interested in staying with you?
These are good questions, the ‘barrier to entry’ questions.
I don’t have such good answers.
Because the technology that is democratizing the ability to ‘make’ things is also democratizing the ability to distribute them.
This is a very big change.
In the not too distant past, (like yesterday), there were enormous ‘barriers to entry’ in the media. ABC had a piece of the electromagnetic spectrum, you didn’t. If you wanted to get content into people’s homes, you had to deal with ABC. Or CBS.
When cable came along, a few more players were allowed into the party, but not many. The barriers to entry were still pretty strong.
If you wanted to get content or a message or news or advertising into people’s homes, you now had to deal with ABC or Comcast. Pay or no play. They held the keys.
Suddenly, the web makes it possible for anyone to get into everyone’s home.
This is confusing.
Now anyone can, effectively do what once only Bill Paley could do.
The barriers keep falling.
This will take time, but it is happening.
One of the clearest signs that it is happening is the sale of local TV stations. Lots of them are suddenly on the market.
Today, Fox announced that they were putting nine of their 35 stations on the block for sale:
– WJW in Cleveland, OH
– KDVR in Denver, CO
– KTVI in St. Louis, MO
– WDAF in Kansas City, KS
– WITI in Milwaukee, WI
– KSTU in Salt Lake City, UT
– WBRC in Birmingham, AL
– WHBQ in Memphis, TN
– WGHP in Greensboro, NC
They join the ranks of CBS and NY Times who already sold off their stations. Lostremote reports that both Nexstar and Lin are going to put some of their stations up for sale as well.
Owning a TV station used to be a license to print money. You had something no one else (or almost no one else) had: access to people’s homes.
Those days are now over. Technology has blown away the ‘barrier to entry’. (“Mister Berners-Lee, take down that wall!”)
So the smart money is dumping out as fast as they can.
But where will they go?
How can one make money when there are clearly no longer any barriers to entry?
What ‘barriers to entry’ meant, really, was that you could pretty much provide any junk you wanted and people had to take it. They had no choice. We lived in a kind of intellectual content desert.
Now, we are going to be in the opposite world – flooded with content.
Where is the value?
Rupert Murdoch, no dope, seems to be telling us in his play for The Wall Street Journal.
As the barriers fall, the value is going to be in quality.