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The Morphing of Tech Gadget Makers Into Content Creators (and Vice Versa)...Does It Work?
Do tech companies and content companies make a good fit in a digital age? So far, the answer has been "no". We're about to see if Disney and Apple can turn that around. Can Steve Jobs wear two hats as well as he wears one? It doesn't look promising.
It wasn't long ago that Sony was the tech company to beat. They pioneered transistor radios, better color TVs, invented the Walkman, the Betamax, the CD (along with Phillips), Playstation and so much more.
But these days, no one is excited that a product is a Sony. Whereas, they're still excited about Apple.
What happened?
Simple. Sony got in the "content" business - movies, music, the whole shebang. And, sometime in the 90s, the content side of Sony got worried about how easy it was to copy and replicate all that entertainment - without paying for it again and again. They didn't want Sony to make better "copiers".
Steve Jobs wasn't worried about that. He said "think different" and set out to make it really easy to use digital media to "share" music, photos and other emotionally charged, personal experiences. So, while the Sony folks wrestled internally (and the Microsoft folks, too), Apple took a commanding lead in technology, using iTunes as the stalking horse for their hardware.
Now, the tables are turned. Disney owns Pixar (all 6 movies and animators who can leave for a better job any time). Right now, it's fairly easy for an average high school student to crack the copy protect on a Pixar movie and make as many copies as they want. So, how much are 6 movies really worth as we look forward? Who's going to pay $19 for a DVD five years from now? Is the catalogue worth anything?
And, that's Steve's conundrum as he heads over to help Disney. He built a hardware company through relentless focus on useability and design (I am a happy Apple user and a huge fan). However, now he's split in two.
He needs to focus on Apple (there is no #2 in sight) to keep the tech edge. And, he needs to figure out how to reinvent a family entertainment company that has had huge success in re-selling old product in new formats - at the very time that Apple is trying to flatten the format platform so that digital is all you need (iPod
video, anyone?).
Oh sure, everyone is betting on VOD and new applications to push to cellphones. But, is Snow White going to push to cell phones? Is Toy Story the fit for iPod? Not likely. It's going to be short form. YouTube type stuff for the ADD digerati. And, a lot of it will be free - created by amateurs empowered by iMovie and other Apple creations.
My bet is that Steve will eventually tire of Disney (or they will have a nasty falling out) and he will head back to tech. So far, no one has straddled both the content and the tech horse. Will he be the one? What do you think?
posted by Unknown @ Sunday, March 26, 2006,
