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Book Excerpt
'Autumn of the Moguls' by Michael Wolff

cover

'Paying for Content Has Become an Un-American Trait'
Media moguls are facing lots of problems nowadays, according to the new book "Autumn of the Moguls," by New York magazine media columnist Michael Wolff. In this excerpt, Wolff argues that the ubiquity of media has made content "inherently less valuable."

11/07/03


Here's the merciless trend (which obviously has big and heartbreaking implications for weakened media conglomerates): The price of content keeps falling.

This trend is sweeping and across-the-board. It's not just in music, where the bid price approaches zero. It's in cable television, where hundreds of channels and premium-programming offerings are only incrementally more expensive than the price of a handful of channels. (While the consumer often thinks he's paying more, on a per-hour-of-programming basis he keeps paying less and less.) And it's in the new market-share-grabbing retail strategy of low-price DVDs, as well as the longtime practice of dramatically discounted (indeed, nearly free) magazine subscriptions, and the relentless downward price pressure on once-expensive specialty databases. Information in all its forms gets cheaper and cheaper.

And this isn't just a simple one-cause effect.

There's the Internet, of course, which, flooded with free content, has undermined (to say the least) content value. It has also, as dramatically, altered the idea of the content package -- being able to take only what you want and leave the rest has a powerful negative pricing impact. But then, too, there are the desperate or overeager music companies, which have marketed and licensed music so that it has become ever more freely atmospheric. Music stars, often as part of great synergy plans, saturate TV shows, movies, and advertising; in addition, since movies and television are seldom scored anymore, cuts from CDs (otherwise for sale) become incidental background music. Music itself, in other words, is now Muzak.

And then there are magazines, which, to court advertisers, have become not just cheap but are virtually shoved down your throat. And there are mass-market-media retail chains -- Barnes & Noble, Blockbuster, the warehouse clubs -- which have a Wal-Marting effect (as psychological as it is economic) on books and videos. What's more, the ever-falling price of consumer electronic equipment, instead of creating more and more platforms for expensive content, may also have contributed to the general sense of deflated entertainment value.

Ubiquity has become the main media standard.

So this is elemental: The more available content is, the inherently less valuable it is. ...

Much Internet business talk is now all about putting content back "behind the wall" and getting people to pay for it. Everybody is dreaming of electronic subscription services (the plan to save AOL seems to be mostly based on the idea of making it the HBO of the Internet). Alas, there are virtually no examples (except porn) of content subscription services working anywhere online. Even the Wall Street Journal online service, which has always been the grail of Internet paid-for-content, is little more than a break-even
operation. ...

But paying for content -- at least content for content's sake -- has become an un-American trait. We believe in getting it all, a bigger and bigger bundle for a lower and lower price. The flat fee rules; we don't even pay for long-distance telephone calls anymore. And a flat fee is very close in function and perception to no fee.



From Autumn of the Moguls by Michael Wolff. HarperCollins Publishers. Used by permission.


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