When a new medium like the Internet comes along, it is very easy to predict the doom of the old. Exciting new media dynamics certainly cast a shadow over the incumbents, but the advent of new technology has always caused people to predict the demise of the seemingly obsolete established players.
The invention of radio was going to kill newspapers; the advent of television was going to kill radio, cinema and newspapers. The older among us will remember that the computer was going to banish paper from the office and replace textbooks and so on. Yet in all instances, there has never been more apparently "obsolete media" around than today.
Today, the Internet is going to kill newspapers, TV and destroy the music and movie businesses. It seems obvious that much of the content that used to be handsomely charged for is now, in one form or another, free on the Web. This neo-communist "everything for free" model can surely only eviscerate the old capitalist media paradigm and ultimately wipe it off the map.
Yet history suggests differently. It tells us that we can simply expect more music, more movies, more TV, more print media--and the companies that make it will do better than before. Business models will have to change, and prices will fall while new innovations will be made; this will ultimately drive more consumption and greater diversity. The "old media" businesses will adapt, and change will drive more consumption and create a bigger overall pie.
TV is an interesting example. Without a doubt, this is a dire medium facing big problems. Young people--its most treasured audience--are drifting away from the offering, and can you blame them? How many programs can deliver, in their allotted 30 minutes, what can't be found on the Web in five? How can TV compete with the Internet when it offers little other than an infinite choice of advertising-slathered, content-free nonsense?
TV has plenty of time to adapt, though, and plenty of new distribution channels to morph into. Audiences have huge inertia when it comes to swapping from existing patterns to new ways of doing things; it takes years for significant changes to bite.
Meanwhile, a computer may as well be a TV, and soon your mobile phone will be a TV, and in a few years any surface, public or private, can--and most probably will--become a TV (and likewise a net-enabled device). The Internet and TV will become one, and with that, TV and Internet companies will be in the same industry.
The word "multimedia" has, since its inception, been a huge conceptual millstone, as what we are experiencing is the opposite--not "multi-" but "uni-." The changes in media are being brought about by the effect of a "unimedia": one medium able to encapsulate and deliver content from all other media. With unimedia, it is clear that most types of content are going to be delivered on digital platforms and that these platforms are compelling.
On a unimedia platform, such as a PC, we are already watching TV broadcasts, listening to the radio, watching films and reading news--and pretty much the same companies that produce and distribute this material will do so in the future. Old media will change their business models and retain their audiences, and few will perish.
In music, for instance, the question is not how to make music but how to distribute it for a profit. Sites like News Corp.'s (nyse: NWS - news - people ) MySpace and SoundClick sport millions of free tracks for download, so much so that no one should ever need to pay to hear a good song ever again. What business model can there be in a marketing environment where millions of legitimate songs are available for nothing, even without potential customers spending ten minutes to download software that will allow them to steal the rest at the click of a mouse?
Yet people love Internet radio, and online music distributors like MusicNet or RealNetworks' (nasdaq: RNWK - news - people ) Rhapsody will pay one cent per user per play of a song--that's 12 cents to 24 cents per user hour to a record company. Is the music industry doomed if it can give music away and capture $2 to $5 per listener per day of royalty stream, especially when that stream of revenue can be supplemented by radio station advertising?
More likely than economic doom, the answer to this crisis is the return of the three-and-a-half-minute catchy pop song. This bodes well for the advertising industry and the new-breed advertising networks of Google (nasdaq: GOOG - news - people ), Yahoo! (nasdaq: YHOO - news - people ), MSN from Microsoft (nasdaq: MSFT - news - people ) and smaller denizens like AdBrite. Likewise, the tech companies caught in hiatus by the passing of the Windows/Intel hegemony can look forward to a new era of building the infrastructure of all-pervasive digital delivery.
Meanwhile, there will be yet more books and newspapers, and one day, you will be able to click on them and watch TV.
Clem Chambers is CEO of stocks and investment Web site ADVFN. For free real-time stock prices go to www.advfn.com . E-mail: clemcham@advfn.com
