“If you can’t keep people out of the business,” he said, “you never are going to make any money.”
But others see the balance between content producers and device makers shifting as competition for consumer dollars intensifies.
Five years ago, Apple dominated digital music through the iPod and iTunes store, just as Amazon dominated e-books through its Kindle reader and related store. Now, Apple sells books through its iPods, iPhones and iPads, and Amazon streams music through its more advanced Kindle devices. Both companies’ products stream video, with Amazon directly investing in an online library of 25,000 movies and television shows it offers through subscriptions to its Amazon Prime service.
Google, once mainly a search business, has forced its way into the mobile device market with its own tablet and the Android operating system, which powers a majority of the world’s smartphones and many tablets made by other manufacturers. Microsoft, once mainly a provider of computer operating systems and software, has likewise introduced a tablet computer and a smartphone operating system.
With all these players, some analysts say, the mobile devices themselves will be increasingly difficult for consumers to tell apart. That will lead to a second wave of competition, in which the rivalry becomes about content. A shift sending more revenue to content creators could take different forms — exclusive licensing deals, for example, or discounts for customers who have a Kindle Fire and subscriptions to popular magazines. But a renewed emphasis on content would tilt leverage toward those who make it, say analysts.
Heyward, the former CBS News president, said the best hope for news organizations is creating distinctive, premium content that consumers demand — and are willing to pay for. “Creating premium value is going to be critical to journalism.”
What’s less clear, says technology analyst Whit Andrews of Gartner Research, is whether an overall shift of profits toward companies that create content will benefit traditional media companies or their newer rivals. A model may be evolving to reward those who produce the most popular books, music and shows, but consumers will get to decide who those are.
“Content is always king, but it is never as good to be king as it looks like,” Andrews said, “because there’s always a bunch of kings.”