Will Richardson

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When Our Distribution Monopoly Ends

November 27, 2013 By Will Richardson

From the “Quotes That Could Easily Be About Education Department,” Marc Andressen:

So this has been—the media industry is a microcosm of the changes that are happening, and it’s been fascinating to watch. People are always going to love music, movies, TV, and news—it’s evergreen; people are always going to get value out of media. So it’s not a question of whether people want media or not. And in fact, global consumption of media is rising very fast. It’s a huge growth market.

The challenge I think is that in newspapers, magazines, and television, in particular, and books to a certain extent, you had businesses that looked like they were content businesses but were actually distribution businesses. They had controlled distribution rights on the newsstand, on your front porch, on the cable or broadcast dial.

The problem is, you remove the distribution constraint, all of a sudden you get a massive oversupply of content in each of those categories, and then of course prices come crashing down. And then the adjustment process for an incumbent that’s used to being a monopoly and has a high cost structure, then has a big problem relative to all the new entrants that have tiny cost structures or, you know, user-generated content, like YouTube, with no cost structure.

Not too much of a stretch to see the parallels. If we see the value of schools as delivering content mastery and simple skills, we have a “big problem” on our doorstep.

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