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Content isn't king

People in tech and media have been saying that ‘content is king’ for a long time - perhaps since the VHS/Betamax battle of the early 1980s, and perhaps longer. Content and access to content was a strategic lever for technology. I’m not sure how much this is true anymore. Music and books don’t matter much to tech anymore, and TV probably won’t matter much either.

Most obviously, subscription streaming has more or less ended the strategic importance of music to tech companies. In the past, any music you bought for your iPod had DRM and could only be played on Apple devices, and the same was true in reverse for music from any other service. Even if you’d just encoded your own CDs (or downloaded pirated tracks, but in either case without DRM), physically transferring them to a different device with different software was a barrier. Your music library kept you on a device. With streaming these issues mostly go away. All the major services are cross-device (even Apple’s), and if you do switch to a different service you’re not giving up tracks you’ve paid money for, just a list of your favourites. Switching became easy.

Since music no longer stops people from switching between platforms, it’s gone from being a moat (especially for Apple, the one platform company that actually had a strong position) to a low-margin check-box feature. That doesn’t mean that these services are exactly commodities - each builds its own recommendation tools, some experiment with routes to market (with mobile operators, for example), and some try exclusive early access to new pop songs. But they all have roughly the same underlying library of tens of millions of tracks, and the differences between them are fundamentally tactics, not strategies, just as music itself is a tactic: it is now merely marketing, not a moat. A Taylor Swift exclusive for Apple Music might drive some iPhone sales, just as a cool new ad campaign might, but there’s no strategic lever here - no lock-in.

Something similar applies to ebooks. Like Spotify, the Kindle app is on any platform, so it doesn’t stop you switching devices. Unlike music, your books are still bought (mostly: there are some subscription services but they don’t cover mainstream titles), and locked with DRM, so it’s harder to switch away from Kindle than from Spotify, but that only locks you into Kindle, not any other part of Amazon’s platform: using a Kindle app or physical Kindle e-ink device doesn’t compel you to use any other Amazon products. Apple’s iBooks is not cross-platform, but has under a third of the US ebook market and much less in the UK, and I suspect that it was created only in case Amazon did not make a Kindle app for the iPad (I also suspect that, with hindsight, Apple might not have bothered to do it at all.) Ebooks, like music, do not seem to create any moat for any broader platform strategy.

Meanwhile, whenever I talk to music people or book people, very quickly the conversation becomes a music industry conversation or a book industry conversation. What matters for music are artists and touring and labels and so on, and what matters for books are writers and publishers and rights and Amazon’s bargaining power in books and so on. These aren’t tech conversations. The big tech platform companies rolled into these industries and changed everything, but then moved on to bigger things. Sometimes they left a business unit behind, but books and recorded music aren’t part of their strategic thinking anymore: Amazon has a big ebooks business, but Prime and perhaps Alexa are the strategic levers. Tech needed content to make their devices viable, but having got the content (by any means necessary), and with it of course completely resetting the dynamics of the industry, tech outgrew music and books and moved on to bigger opportunities.

All of this of course takes us to TV, the industry that’s next on the tech industry’s content journey. Just as new technology unlocked massive change in music and (rather less so) in books, it is now about to break apart the bundled, linear channel model of the...