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Welcome to the World of Mass Customized Media


Time for Short Attention Span Theater


Minyans in the Mountains 3 was an incredible event that stimulated ideas and provoked thoughts on how investments in media, metals, technology, energy and financials will shape up for the foreseeable future.

To hear these speakers talk about their perspectives on the economy and the markets was exciting and invigorating. It certainly renewed my belief that we are in a day and age of transformation that may never be seen again in our lifetime.

From a technology and media standpoint, we are in the age of "short attention span theater." This is a time when we are seeing the evolution of man and media, where consumption of communication is tipping to a micro scale. Mass media is dead. Mass customized media is alive and kicking.

Whether by design or not, the future of media is staring us right in the face and for many, we don't see it. I sat on a panel with Michael Santoli, Senior Editor of Barron's, Richard Kosinski of Yahoo! Business and Finance and Michael Nathanson, Media Analyst for Bernstein. Michael Santoli mentioned something about the collective strength of the iPod and it hit me like a ton of bricks. The collective assessment of Apple (AAPL) is focused on the wrong product.

Who cares about the iPod! I hate to be cavalier, and yes the iPod is a great revenue driver for Apple…today. But it won't be. It's the Walkman of our generation. There always is one. Sony never went beyond the walkman. But Apple, it's poised to take a new mantle. It will become the media company of the new millennium.

I posited some time back – did Disney (DIS)acquire Pixar or did Pixar acquire Disney? Stick with me here folks. While they are separate, Pixar and Apple are somewhat synonymous. John Lassiter may be the single greatest creative force of our time. He IS to entertainment today what Walt Disney was to entertainment in his era. He is the preeminent content producer and his realm is about to expand significantly.

Now to the point: I own Apple stock. It's the single biggest investment I have. I have owned Apple since I can recall. I bought it at $7. The only time I got out was during the Scully days. Today Apple has the killer app. It's called iTunes. Apple is so far ahead of anyone else that I truly believe it will take the media mantel like we have never seen.

iTunes is a consumer's dashboard to media. It's a consumer's ability to create, as Richard Kosinski from Yahoo! put it, "We Media" – Mass Customized Media. In other words, a play list is We Media. And a play list is more than music. It's the ability to go from a song to a news report to a program to piece of artwork to an investment decision to purchase of those new – yes you guessed it - iPod Nike (NKE) sneakers. Welcome to the next generation of media.

To more accurately frame the landscape, there are two elements to media today. They are content and distribution. These are my areas of focus. There are multiple components to both of these segments and I will explore these over the months ahead. These include the fiber producers like Corning (GLW). The fiber owners like Qwest (Q), Level3 (LVLT) and Global Crossing. Content producers like Disney and Viacom (VIA) and the distributors like Time Warner, Comcast and Verizon.

Here are my leaders in each category. They're the ones I watch daily:

Distribution and Content:

  • Time Warner (TWX)
  • Comcast (CMCSA)
  • Apple
  • NewsCorp

Distribution only:

  • Verizon (VZ)

Content only:

  • Viacom
  • Disney

To provide further perspective on the growing land grab or competition to own the space: Verizon is putting $20 bln – (YES billion – put your little pinky to the corner of your mouth) into the roll-out of fiber to combat cable's penetration into telephony. According to the NY Times today, Verizon is losing 1000 land line phone customers a day. It is a distribution mechanism and I think its saving grace will be the ability to bundle cell, home, business, etc. The only thing the cable companies can't offer is cellular.

The companies I will be watching over the next twelve months with my media lens on are Time Warner, Comcast and Verizon. (I'm adding AT&T (T) to the mix, but I think its advertising is out of sheer desperation and I'm not sure if they actually have the product it's advertising – cell, phone, internet, etc.) I'll be watching closely because I can see these three potentially making some significant acquisitions.

It was rumored some time back that Comcast would acquire Disney. Many other rumors are abound. Keep an eye on the media marketplace. The deals are going to start flowing as we head into a new more robust media season.

Keep an eye on Apple and see what new deals shake out. I wouldn't be surprised to see them release a Pixar film on iTunes at the same time it rolls out in theaters. Heck, $25 to download Cars? I'll do it tomorrow and I guarantee you so will a lot of other people.

Welcome to the new world of Mass Customized Media. Be excited! I am.

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Position in AAPL, TWX
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