It’s a content conundrum

If Verizon and AT&T are serious about getting into the entertainment business, they need to think about how best to leverage their assets (Internet backbones, broadband access to consumers, world-class quality of service) so as to enable the kind of distributed content creation that’s the hallmark of 21st-century communications. It’s not about piping ‘content’ to passive consumers (the old cable model).

It’s official – the Verizon/MCI and SBC/AT&T mergers have gotten final approvals from federal and state authorities. The next step, the joke goes, is for AT&T and Verizon to buy each other, thus reconstituting the original Ma Bell.

Not likely. The next new frontier, as many folks have noticed, has to do with redefining the relationship between content and carriers. Consumers are increasingly turning to the Internet for news, shopping and entertainment, as well as communications services. According to a recent study by Nielsen/NetRatings, one in four Internet users reads a newspaper online. And half of all U.S. Internet users obtain coverage of significant events such as Hurricane Katrina online, according to a new study by the Pew Internet and American Life Project. USA Today calls the Monday after Thanksgiving “cyber Monday” because of the high volume of online shoppers. As for entertainment – does anyone younger than 30 watch TV or listen to the radio these days, or are they downloading content (legally or otherwise) from the Web?

In response, telcos such as AT&T and Verizon are investing billions in the TV business, planning to go toe-to-toe with the cable companies to deliver a one-stop shop for communications, television and Internet services. Given such a focus, you might think the next logical merger would be between a carrier and a content provider.

There’s just one catch. The telcos and the cable companies are missing the point, which is that 21st-century content is increasingly collaborative and distributed. As the Pew Internet and American Life Project recently documented, 57% of teens who use the Internet (that’s about 12 million kids ages 12 to 17) are also content creators: They’ve created a blog or Web page, posted original artwork or photographs, written stories or produced videos, or remixed online content, including music. They’re also TV watchers, iPod listeners and video-game players who instant-message their friends while chatting on cell phones. As Greg Kot, music critic for the Chicago Tribune notes, “They’re used to having their entertainment now, not waiting for a corporation to serve it to them on its own carefully calibrated marketing schedule.”

Bingo. If Verizon and AT&T are serious about getting into the entertainment business, they need to think about how best to leverage their assets (Internet backbones, broadband access to consumers, world-class quality of service) so as to enable the kind of distributed content creation that’s the hallmark of 21st-century communications. It’s not about piping “content” to passive consumers (the old cable model). It’s about delivering a framework that enables users to easily find, procure and create content on their own.

Part of that framework exists – it’s called IP. What’s missing is the next generation of search and indexing (something Google and Microsoft are both working on), as well as viable payment schemes.

If the telcos want to get serious about beating the cable companies at the content game, they’ll need to think hard about how to enable 21st-century content creation.