A wise man once said:
…businesses don’t get to pick the timetable for when their preferred model takes a permanent dirt nap.
AirPlay, a software tool included with Apple’s iPads and iPhones, is widely viewed as being potentially disruptive to the cable industry, because it makes it easy for people to view a broad variety of Internet content on a television. Time Warner Cable’s leader, however, hasn’t heard of it. Glenn A. Britt, the company’s chief executive, said in a group interview on Friday that the challenge for digital video was that there was no simple way to get Internet-based video onto the television screen. He wasn’t familiar with AirPlay.
The time for cable to prevent itself from being solely a data pipe has all but passed.
It’s my opinion that many industries in the US aren’t doing enough to insure themselves against the future. During the past few decades, with a few notable exceptions, it seems that corporations increasingly rely on old, already-paid-for investments for revenue and don’t make new investments. Further, they ask for protections from the government, sometimes preventing new companies from entering the market, sometimes obtaining a government-blessed business model. These defensive business practices1 have a history in the US. Our auto industry is a chronic user of these strategies, having been bailed out by the US government in different ways over the last four decades. Indeed, the best electric car on the market does not come from the Big Three.
The cable industry has shown symptoms of this problem in the past, going so far as to fund studies sympathetic to their position. That seems to be a common practice in the US, but the problem is more than just blatant obstruction—it’s ignorance too:
You lie awake at night worrying about what is that which will disrupt your business model,” he said. “Apple iMessage is a classic example. If you’re using iMessage, you’re not using one of our messaging services, right? That’s disruptive to our messaging revenue stream.
Dude, duh. What were you thinking, awake at night, when Google Voice (which includes a free SMS service) launched and when the Twitter iPhone app was updated to use push notifications (effectively allowing free messaging over any data connection)? European providers have recently launched a new messaging platform with multimedia and realtime video capabilities, but even this is arguably too little too late.
It’s hard to watch this happen over and over, but it’s also heartening—such oversight and laziness allows smaller institutions to grab some pie. I fantasize, though, about a maverick politician or regulator telling a whiny executive to deal with it.
I can’t help but wonder if these business strategies are (or were) taught in business schools. If the strategies are a result of education, it would be instructive to learn which schools are responsible. One could then make informed investment (or hiring) decisions based on an executive’s pedigree. ↩