Content Rules & TCOMM Act of '96

Perhaps the biggest disappointment for me during the Clinton Administration (beyond “Don’t Ask, Don’t Tell”) was the Telecommunications Act of 1996 (TCOMM) that he passed. I have a feeling that, in retrospect, he even may regret this decision now, though that is pure speculation on my part given that Bill came in being a free-trade kinda guy.

The TCOMM was a horrific piece of legislation that essentially deregulated the entertainment industry. Business “advocates” (*cough* lobbyists) argued that this would be good for consumers. They argued the same lame arguments they always throw out: Increased competition, lower prices, better customer service, etc.

And what have US consumers gotten the past dozen years since the inception of this albatross? Let’s see:

1. The small baby bells and other small companies that were doing great work were swallowed up by the big boys and assimilated. Eliminating any real sense of competition.

2. Shittier customer service than we could have possibly imagined from BOTH the cable and phone companies.

3. Prices for basic services have gone through the roof (eg: I had Comcast Cable for one calendar year, for the 2004 Presidential Election (I’m such a political-whore I HAD to have cable). In the span of that one year my bill started at $38-39 per month and when I canceled it was at $52 per month).

4. And until recently, shittier television programming, and shitty movies choices.

Lotta shit there. The fallacy of the free market system is that when the big boys eat the young, it allows the big players to essentially collude and set the market price and quality of customer service, and why would they set prices lower and offer good customer service when the only other choice is the same crap with a different brand name? There’s no incentive to give customers truly good service at a REASONABLE price.

However, this blogger new the time would come: The britches a given company chooses to inhabit by taking over and/or merging with another Goliath company…the shit starts a runnin’ o’er. Finally, it appears in some areas of the telecommunications/entertainment industry, the britches have proven too big to fit all the shit in them.

Vertical Integration refers to the idea that a business (eg: General Electric, or Time Warner/AOL) has the ability to develop, produce, and then distribute its product all in house within one giant over-reaching company. Soon after TCOMM, this became the industry model to maximize profits because you don’t need to outsource any part of your business, thus keeping all profit. Other examples would be the Oil Companies and American Apparel who tightly controls their product from the shirt making, to the designs, to the sale of the apparel.

Time Warner (TW) liked this idea, as did other giant conglomerates back in the late 90's. And they attempted to develop, produce, and then distribute their own content, via in-house offerings like MTV, Warner Bros., TNT, and even AOL through internet-based content, etc. However, as they did this, they along with other companies found it untenable to seriously put good content forth because of the sheer bureaucracy and red tape within their own companies…and they have suffered.

Great article in this Sunday Times by Tim Arango looking at how TW’s new CEO, Mr. Jeff Bewkes, has begun to rehab the company and sell off portions that he found too much of a pain in the ass to run and do it well. He’s looking to sell off or share a minor partnership share in AOL with another company.

More telling is the interesting note on GE and how after the Olympics, they may be looking to sell off parts of their conglomeration. Unfortunately, I am betting that these companies will simply trade problems, as Bewkes and TW may be looking to buy whatever GE may offer…but, at least this may be a demonstration of the industry finally "getting it" and moving in right direction.

I am, sad but true, a brand guy. In general, I love brands. I have seen improvement in the writing and content of television on cable because of some of the shifting focus on establishing great content. These companies may finally be realizing they cannot rely on their own writers, and having diversity within writing and producing leads to better content, a better product, and ultimately, happier consumers who WILL buy their content if they get their act together.

As the saying goes: “Baby steps, baby steps.” Let’s hope more CEO’s in the industry see the message: Pay writers and pour money into diverse content. As I’ve argued before, it’s not big name actors/actresses that matter in the ultimate success of a film, it’s great writing. As the writers of “My Big, Fat Greek Wedding,” and more recently, “Juno” can attest. As they were two "sleeper" movies that became blockbusters due to word of mouth about the great movie (the great writing).

Moreover, ask HBO and Showtime how they became as big as they are today. It wasn’t because HBO aired old movies, and it wasn’t because Showtime aired soft-core porn every Saturday night…it is because they spent money on finding/developing shows that brought great writing, and then great actors to the forefront.