The Paula Gordon Show
Content Trumps Technology

The media middle men currently getting between stories and customers will eventually lose the power they have today, Ken Auletta is guessing. And he's absolutely confident everyone is guessing in today's tumultuous communications businesses, even the men running them. But in the end, our savvy observer is confident that content is king, whether in news, the movies or the software business.

As the "Annals of Communications" columnist for The New Yorker, Mr. Auletta talks directly with the men (yes, they are mostly men) shaping our vital communication future. ╩The human factor is the great unknown, both with individual media giants -- men like Rupert Murdock and Ted Turner and John Malone and Michael Eisner -- and with the consumer/citizen. Why are the media moguls scared? Because they a betting big bucks on educated hunches.

The megacorporations should concern us all. We're right, according to Mr. Auletta, to continue our historical suspicious of centralized power. Communication is BIG business in America and that's a challenge to the open communication and access to good information essential to democracy. We must be mindful of the natural tension with the interests of businesspeople who, quite properly in our economic system, want to control or eliminate risks to their business. But we must be sure there is enough competition to provide checks and balances to potential abuse. The prize is our freedom.

These concerns are not abstractions to Mr. Auletta. He worries that the traditional walls between business and content are indeed getting lower, in all the communications industries. And business people in general are very concrete. They are driven by the bottom line, not the abstractions of democratic processes. The news business is particularly vulnerable. Most journalists think it's their job to provide citizens with information they need, not what they'll pay for. Companies like Times Mirror or Knight-Ridder now talk about achieving a 16% or 18% profit margin. Auletta is concerned that public trust responsibilities take the back seat to the profit margin in this climate.

It's not just Americans who need to be paying attention. Fears of "culture imperialism" may be well founded. America's number one export is communication. (Mr. Auletta says that's both because we have more experience with communication and because we are the best storytellers in the world.) So how the America's megacorporations take shape directly impacts the rest of the world, too.

What does the future of communication hold? No one knows. It all depends of the consumer. But Mr. Auletta believes there will always be a need for content -- from movie making and news to software. ╩And he's betting on quality. Act from conviction, he urges. Do things you believe in. Quality is not only good for the soul. People buy it. That matters, because everyone's guessing that what people buy will shape our information future.

Ken Auletta

. . . has been "Annals of Communications" columnist for The New Yorker since since 1992, writing for the magazine since 1978. He has a written for a number of prestigious magazines, and has produced several books which include two national bestsellers -- Three Blind Mice, How the TV╩Networks Lost Their Way and Greed and Glory on Wall Street. His latest book is The Highwaymen, Warriors on the Information Superhighway. He and his family live in Manhattan.

Excerpts

Conversation 1

Ken Auletta describes the two contradictory forces currently at play in the communications world in conversation with Paula Gordon and Bill Russell -- fewer, bigger players and a host of upstart companies contradicting those big players while the rate of change accelerates. Mr. Auletta talks about the men who are the giants of today's communications businesses and explains why they all are scared -- with due cause.


Conversation 2

The human factor plays an enormous role in the decisions of people like John Malone, head of TCI, or Barry Diller or Rupert Murdock or Bill Gates. Mr. Auletta describes these men as individuals and as decision makers.

The other factor in how the communications businesses are metamorphosing is that no one knows where it will all end up because no one can predict the consumer or technology. Everyone -- from Andy Grove at Intel to Bill Gates at Microsoft and all the others -- is guessing! Mr. Auletta describes business people's natural urge to control everything and to take the risk out of capitalism whenever possible. He champions competition as our defense against that urge and suggests the Internet as a powerful democratic model.

Mr. Auletta sees three reasons telephone companies move too slowly to be considered serious competitors in today's fast changing world.


Conversation 3

One hundred years ago, most people thought the industrial revolution was complete. Mr. Auletta compares the explosion of technology in this century to what has happened since 1980 in technology. He worries that in a deliberative democracy, we need things to slow down, not speed up. He is particularly concerned about dangers to our democratic processes posed by the ways news-delivery businesses are changing; bemoans the lack of respect for the traditions of journalism; and worries that the culture of news is in direct conflict with the culture of the businesses which are buying up news outlets. He describes the seriousness of what is at stake, both in news and in entertainment, and offers a theory for why so much of our entertainment is derivative.


Conversation 4

As companies get large, creative people don't want to feel controlled. Mr. Auletta describes that conflict in the movies, television and news. He makes a strong case for "conviction" as a driver in producing quality work. Quality, Mr. Auletta is convinced, does well and gives examples. He describes niche communications markets where quality won out, reminding us that communication is America's number one export. He then suggests some of the worldwide ramifications of our dominance and how American owners are responding.


Conversation 5

Mr. Auletta sees our culture as essentially anti-establishment and argues for the checks and balances which freedom requires everywhere, crediting the anger he sees abroad as conglomerates dominate the mass media worldwide.╩He believes the publishing business went astray following the Hollywood model and gives examples.

Mr. Auletta puts his faith in the power of citizen/consumers to counter the excesses of megamedia, while sharing John Dewey's concern that the public can also be "the great beast." As a writer, Mr. Auletta acknowledges the limitations as well as the power of language.


Conversation 6

Distancing himself from journalism's disease of "know-it-all-ism," Mr. Auletta looks to the future. If he were a venture capitalist or someone starting out, he would bet on content. In the long run, Mr. Auletta thinks the middle men who get between the story and customer will lose power. ╩Content will be king. But no one can predict what content consumers will want or how they will want it delivered!


Acknowledgements

Mr. Auletta welcomed us into his Manhattan apartment at the end of a busy week, the beginning of an equally busy weekend. We appreciate his flexibility and enjoyed his home and hospitality.

Trisha Barron and Warren Kornblum were an integral part of our week in New York which included this conversation. We thank them both!

Aditional Links:
The Highwaymen, Warriors of the Information Superhighway is Ken Auletta's latest book. It's published by Random House.


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