We knew this was coming. Old Media is scared Sh&%less of new media. They are losing control of their content. The Old Media model is set up with several layers of hands that need feeding each time a piece of content is consumed. This is likely the result of the world of media being dominated by lawyers who like to lawyer. Clearly, the Old Media companies incur a large liability risk if too much of this content is viewed without compensation (not to mention the lost revenue from this free content cannibalizing the paid licensed content).
However, the market will eventually change the Old Media model… survival will dictate that. User generated content will continue to compete with professional, expensive, Hollywood style content and Hollywood style content will lose because free always wins.
Google, the great contextual engine of our time, now has more power than Hollywood because Google makes things relevant on a 1 to 1 basis. Hollywood, on the other hand, tries to please all people (large markets) including themselves with 4-hour-long self-absorbed, expensively produced, painfully boring shows like the Oscars. They fail every time because that model does not work within this our new niche market economy. The end user is in control…we are now our own arbiters of good taste and we will find what we want in the format we want to consume. Google helps us do that. So to will Yahoo’s and Microsoft’s search engines.
This is where it gets really fun. The technologists actually get their revenge for being stuck in the back office for years while the lawyers and creatives made all the dough. Now the guys that make all of these tidbits of content relevant via algorithms and behavioral science are the ones that have the power and the world is looking at them to make sense of the new reality of a world of limitless media. If you get a chance, read Spencer Wang’s research about the shifting earth in the media and entertainment industry. He makes a few great points that the old media guys should heed. In the end, Mr Wang concludes that the firms that provide relevance (context) stand to gain much in terms of market power as user generated content continues to fill the databases of the web. I think NewsCorp sort of understands this, as do parts of CBS (think Quincy “Q” Smith).
With this lawsuit, I think we see the evidence of the fear that Old Media has in realizing that their content is becoming less relevant as more content supply becomes easily accessible to the market. I think Old Media is trying to scare the daylights out of anyone (Google is the student they have singled out to make an example) trying to provide useful context (more useful and consumable distribution) to the glut of media available online. The problem here is that Old Media is used to controlling the distribution of their content. Its clear that with the web, they no longer do. I hope that eventually Old Media learns to embrace the new distribution model so us poor consumers (who control demand) have the benefit of choice.