Content is King!

The success of The Dark Knight, the improved profit margin from VOD, premium networks like HBO, have finally convinced Time Warner Cable that its future success is dependent on creating great content. "If you build it, they will come", an oft quoted line from Field of Dreams is the mantra these days. "For now, Mr. Bewkes is staking the company’s future on three big content providers: Warner Brothers, Turner Broadcasting (which includes TNT, TBS and CNN) and HBO. To ramp things up on the entertainment front, he’s also been overseeing internal discussions about acquisitions in film and television — including a possible takeover of NBC Universal, should its parent, General Electric, decide to sell, according to executives and bankers who requested anonymity because they were not authorized to disclose details of the discussions."

At the same time, Time Warner is finally moving forward to unravel itself from AOL, a move that smelled rotten the moment it was announced that AOL was buying Time Warner and not the other way around. "Elsewhere in the company, it’s all about downsizing. Time Warner’s cable operation is being spun off, eviscerating the once-popular corporate notion peddled by business consultants and merger specialists that content and distribution should reside under one roof." Where previously owning and distributing content was a necessary synergy, now it appears that this combination no longer holds true. While Time Warner is spinning off its cable properties, Cablevision shareholders are at the same time discussing the sale or spin off of its programming arm, Rainbow Media. Will Comcast soon be announcing that it too will spin off its various programming nets, E!, Golf, Style, and others?

"For Mr. Bewkes and his team, the core of the strategy is a wager that the media pendulum will swing away from distribution and back toward content." And so we watch as others mimic this strategy and content and distribution separate. But mark my words, this is cyclical and within 10 years, that pendulum and the need for synergy will once again reunite content and distribution. That is the changing entertainment landscape.