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When Comcast shelved its attempted merger with TimeWarner Cable, it would have been reckless to assume it was over. These companies swap namesakes so often it's difficult to remember who owns who.
It didn't take long for one of the internet's earliest powerhouses, and a familiar badge in the TimeWarner lexicon, to make similar headlines. A couple weeks after Comcast's announcement, Verizon announced it would be purchasing AOL for more than $4B.
AOL, once "so easy to use" it was #1, failed to recognize the importance of its broadband internet provision and continued to invest in its interface, unique hardware, and proprietary access. They were the Rolls Royce of internet access right up to the time that were shopping for a Prius. When everyone went to cable, AOL fell on its face.
But over the last few years, AOL has been reinventing itself. Focusing on the advertisement industry and live mobile streaming, AOL has proven itself a unique entity once again. Couple that with Verizon's own mobile division, and the inevitable leap to competitive mobile data, the pairing makes sense.
What doesn't make sense is Big Cable's continued commitment to solely delivering content via hardwire. Just as AOL ignored the impending leap to cable, fiber, and broadband, Big Cable is ignoring the next great leap to mobile wifi. It's shortsighted to look at the big screen in the family living room and assume there will always be a market for paid cable. There are kids in the basement watching CollegeHumor and YouTube on their T-Mobile data plans, kids that will continue to get their content from tablets when they go to college in lieu of purchasing their own cable bundles through the dorm.
AOL fixated on the large PC in the family study, ignoring the rapid growth of cable internet provisions and the then-emerging smartphones, and they learned their lesson the hard way.
Big Cable seems bent on learning the same hard lessons. Today it was announced that Charter Cable will be purchasing TimeWarner Cable for $55B, an excess of more than $10B what Comcast was prepared to spend on a merger. Given Verizon's move to buy uniquely mobile content with AOL; Comcast, TimeWarner, and Charter seem committed to a Goliath complex, finding their fight through consolidation rather than innovation or unique and timely acquisitions.
For Philadelphia, Comcast still reigns supreme as the nation's largest cable provider. But as AOL once proved, telecommunications is not a stable and finite utility like electricity and water. Technologies evolve, and a telecom company's commitment to customers and current technology needs to be consistently paired with the inevitable emergence of new technologies, as well as customers' thirst for more and their ability to find it with or without a cable box.
It's Valentine's Day and Mayor Michael Nutter celebrated by kissing the boots of those who apparently run City Hall. Gushing about Comcast's potential acquisition of TimeWarner Cable, Philebrity posted the mayor's entire letter here, so I'll just list the gems.
"This transaction will provide millions more consumers with increased content and viewing opportunities."
I don't know if you've been to Hulu Plus lately, but I noticed recently that you're now required to log into your cable television provider to watch a bulk of its premium content. I'm no lawyer, but there is something about requiring me to pay for content three times - subscribing to cable television, internet, and Hulu Plus - has to be illegal. It's not surprising that Comcast owns a large stake in Hulu, and that this restriction is applied to Comcast affiliated content owned through NBCUniversal. Acquiring TimeWarner will put the vast majority of television in Comcast's hands, requiring all of us who've cut the cable cord to pay for this triple-dip to watch anything online.
"They deserve our gratitude and the City’s appreciation for pushing this great corporate citizen farther into the areas of technology and communications..."
Now I know Nutter is a politician and not a software engineer, but what - aside from a creative knack for avoiding anti-trust suits - has Comcast actually innovated?
"I am enthusiastically supporting this acquisition as I believe this is the ultimate triple play – great for consumers, great for the company and great for our city."
How do you write a really loud kissing sound?
If the federal government agrees to the merger, Comcast will be buying TimeWarner Cable for $45 billion dollars, or roughly the GDP of Costa Rica. Prepare you Dr. Evil pinkie. If you were wondering how Comcast pushed it's proposed CITC through City Council unchecked, we have our answer. Perhaps now we can look forward to Comcast's next architectural contribution, a Death Star hovering above the Schuylkill.
Bradley Maule of Philly Skyline is back, now writing for Hidden City Philadelphia. With him come the memories of a Philadelphia circa 2005 when everyday we'd eagerly turn to his own website, Philly.com, Brownstoner, or Inga Saffron's Blogger page, anticipating the seemingly daily proposals for new skyline changing high rises.
Maule has ignited speculation that Comcast and Liberty Property Trust have revisited plans for 18th Street, possibly employing London's Foster + Partners, responsible for 30 Saint Mary's Axe and Hong Kong's HSBC Building, among many other modern marvels.
Liberty Property Trust owns both sites on 18th Street between JFK and Arch, formerly the proposed sites of the American Commerce Center and Comcast's annex mirroring Suburban Station. For now, this seems to amount to little more than speculation stemming from Liberty's ownership and Comcast's impressive cover letter.
While Comcast has seen record growth, particularly since it's acquisition of NBCUniversal two years ago, many are questioning the cable (now media) giant's viability in a variety of industries already experiencing massive technological shifts.
There's no doubt that Comcast has the money to employ Foster + Partners and the blind ambition to set a few more local construction records. But their corporate business model may be primed to go the way of AOL.
"What's that, Wes? You're crazy." said everyone.
Well, first of all, AOL is far from dead. It exists as a collection of media outlets that you likely don't realize you visit all the time. But as a visible force in the technological realm, it is no longer a unified entity to be reckoned with.
The company that once dominated internet technology was forced into decades of "right sizing" when the industry they owned - dial up and highly proprietary internet access - disappeared over night.
Once poised to introduce us to the future of the internet and media, AOL was experimenting with dozens of new technologies and integrated media only coming to fruition today.
Before companies like Google took the reigns by releasing new, experimental technology, even risking the release of hackneyed ideas like Google Glass, AOL played it safe, put AOLTV in the closet, and chose a speculative business model despite their proven technological merit, and continued to buy, buy, buy.
AOL grew to the point that shareholders usurped the roles of internet revolutionaries and the company that put the world online from a garage in suburban Honolulu became synonymous with Oldsmobile.
Now is it sounding more familiar?
Comcast is still largely rooted in cable and it's recent investments are in traditional media. Like AOL customers who began peeking outside their Buddy Lists and Chat Rooms to explore what the world wide web had to offer, Comcast customers are exploring a vast world of media outside the confines of their cable boxes.
While Comcast continues to push bundles, forcing customers to purchase networks peddling Babies Having Babies and HSN just to get NBC and Fox (and still pushing landline service as something marketable), younger consumers are opting out of traditional television for internet entertainment.
Comcast seems to think their customers won't find anything they like, and likely thinks it shouldn't matter. After all, it's hard to access the internet without Comcast, especially in Philadelphia, right?
Wrong.
Technology and access to interactive media seems to be changing too fast for the dinosaurs at 18th and JFK to grasp. In fact, it's changing too fast for many of us over thirty-five. Not only is a younger generation watching their television shows without a television, they're accessing the internet and all it offers without a computer. And that's where Comcast's reign begins to falter.
While many interact with media on smart phones and tablets, accessed through Sprint, T-Mobile, and Verizon, the media their accessing is even less traditional, and often less corporatized.
Comcast seems to think its ace in the hole is in their acquisitions of mainstream media like NBCUniversal, while younger audiences are finding their entertainment on College Humor and Cracked.com and getting their news from BuzzFeed and privately run blogs.
You don't even need to be a Millennial to see the trend changing. A decade ago you likely wouldn't have met a person who didn't have several hundred channels cabled into their idiot box. Today you may only know a few.
Even if they are Comcast customers, much of people's viewing choices come from Netflix and Hulu where they can not only watch what they want when they want, but even watch original programming like Season 4 of Arrested Development and Orange Is The New Black which aren't even available on cable.
This rogue programming is often arguably better than standard programming because they're offered with less censorship, no network involvement, and are produced without the time constraints of the half hour sitcom or one hour drama.
Plus, and this is even more detrimental to the traditional cable programming business model, these programs are seemingly commercial-free because the advertising is imbedded in the application rather than interrupting the program. More and more people are willing to sit through a 30 second commercial to watch a three minute clip on YouTube, and advertisers are taking note.
If Comcast was smart, they would have bought Tumblr and Demand Media, not NBCUniversal.
It's hard to say if Comcast will ever choose to tap into this market. As Google begins to rollout Google Fiber, offering access 100 times faster than broadband, Comcast is saying we can't handle it and TimeWarner says we don't want it.
This may say little about the programming Comcast and TimeWarner offer, or the platform on which it's offered, but it says a lot about their corporate impression of the market place.
These are the words of a monopoly. Of Walmart.
In fact, the cable industry has been lobbying Capitol Hill for the right to control how much of the internet their customers can access. Instead of joining the new media, cable providers are trying to block it. Like a cranky aunt with tight parental controls, Big Cable wants to restrict our viewing to serve their corporate interest.
Who knew allowing the sale of NBCUniversal to a company that controls which networks we access would have been a conflict of interest? Oh, just everyone.
But even if the cable industry succeeds in restricting Hulu and Netflix to serve themselves, market trends are dictated by the newest markets, markets these corporations don't seem to understand. These consumers already know where to find the content they want, and if they can't get it within a cable company's pre-packaged internet bundle, they'll find it on YouTube or download it from Russia.
And again, it doesn't matter because they're not watching television from a big screen TV in the living room, they're watching FunnyOrDie.com on the subway.
It's a new frontier.
These are consumers who got tired of Lady Gaga after a one year hiatus, despite her cult like following seemingly ages ago. To them, Google Fiber is Katy Perry and Comcast is Steely Dan. A laptop tethered to Comcast might as well be a big plastic Garfield phone.
If a technology company can't recognize that its market wants the newest and best, no matter how slightly newer or better, how will it ever be able to compete with the rogue, unpackaged entertainment within the Wild West of the internet, gaining more and more traction by the minute?
Barnes and Noble learned this from Amazon, and the retail industry learned this from everything from eBay to Overstock to CraigsList. Comcast, perhaps under the impression that access to the internet is somehow synonymous with the internet, ignored the memo.
As an amateur architectural buff with a vested interest in technology and our virtual environments, I only hope that Liberty Property Trust and Foster + Partners get to work on North 18th Street before Comcast's shareholders recognize exactly where they're headed.
