“Possession is not as important as it once was.
Accessing is more important than ever.”
Kevin Kelly, The Inevitable
I was reminded of this quote when reading the news of AT&T’s recent acquisition of Time Warner. The central thesis of the acquisition—at least what can be gleaned from AT&T’s and Time Warner’s public statements—is by owning Time Warner’s premium content, AT&T will create “innovation” in the delivery of premium content to its existing cable, telephone and wireless customers.
Assuming that AT&T’s statement is true, the vision it creates for the future of communications is outdated and frankly, irrelevant. That vision, you see, is about possession, and not about access. The real future of communications is all about access: the availability of content and applications and features and services to consumers regardless of the network used to deliver that content.
We’ve been here before, and each time, visions based on “possessing” and not “accessing,” have been proven wrong. The local telephone copper networks, whose “possession” was deemed so valuable in prior decades, have not only been replaced with different, more advanced networks like wireless, but are now even being abandoned by their historical possessors.
So, too, with content. While it was once thought—and appears to still be thought by AT&T in making its case for the Time Warner acquisition—that cable network content (such as Time Warner’s) was the holy grail, this is clearly no longer true. Non-cable providers, most notable Netflix and Amazon, are creating award-winning content, and vast amounts of content on the internet are created by consumers themselves. Even music, which was once all about the physical possession of albums, or more recently CDs, is now all about digitized accessibility.
The vision has changed: in Kevin Kelly’s words, it is no longer about the “ownership that you purchase” but about the “access that you subscribe to.”
Why does (and can) an access-based, and not a possession-based, model work in delivering the content, applications, features and services that make consumer’s lives better and businesses more efficient and productive? Simply, possession-based models exclude; access-based models include.
AT&T (and other incumbent provider’s) models are based on exclusion. “Use my network and you’ll have my content”, and it’s corollary, “Don’t use it, and you won’t get any of it.” Whether accomplished directly by not making proprietary content available to other network providers, or indirectly by doing it on unequal terms, the result is the same. And by definition, this limits consumer choice and access. Again, we’ve seen this before. (“You can have any color telephone you’d like as long as it’s black.”)
An access-based model, on the other hand, produces economic benefits for both the access provider and the consumer as well as greater choice for consumers. The access provider receives a royalty or payment for the access to its content, and contrary to its economic incentive in an ownership-based model, is incented to provide that access to as many other networks and customers as possible. Indeed, each time it provides access to an additional subscriber, it improves its profit margin, since the marginal cost of such additional access is virtually nonexistent. The consumer receives economic value by paying only for what they use and having access to new and updated content. Which allows consumers to avoid traditional ownership costs—and perhaps even more important for content technology—the high cost of content or product obsolescence.
The other hallmark of an access-based model is success in the marketplace is also based on the customer experience. If you can get access to the same quality network and the same quality and variety of content from all providers, the decision to choose a particular provider will be based on the customer experience the provider offers. This, not the ownership of networks and exclusive content, has and will increasingly become the source of true innovation.