Here’s what it means: Five years from now, you’ll be able to turn on your Internet-ready TV/PC/whatsit and have a Tom Hanks hologram step into your living room, perkily announce ”You’ve got mail!” and hand you your digital copy of Entertainment Weekly, the new Madonna album, a CNN live report on the latest hot IPO, and MovieFone tickets to the Leo DiCaprio movie premiering that night.
Okay, we’re kidding.
But if that Tom Swift-meets-George Orwell scenario remains firmly in the sci-fi camp (for now), what does the proposed $350 billion humongo-mega-merger between Internet behemoth America Online and media colossus (and EW parent company) Time Warner truly portend, for the two companies, for the media and online industries, and (oops, almost forgot) for you?
Despite nay-saying from consumer advocates such as Ralph Nader, the impetus behind this deal is perfectly logical to the majority of Wall Street and media analysts: Steve Case’s AOL gets the high-speed bandwidth it has been craving in the form of Time Warner’s 13-million-strong cable-TV audience (as well as the half-million subscribers to its Road Runner cable-modem Internet service). It also gets Time Warner’s content – magazines, movies, music, books – to play with. And Time Warner? After years of new-tech flops like the Full Service Network and the Pathfinder website, CEO Gerald Levin (or, as he has referred to himself, Interactive Guy) finally has a partner that gets it – and has a 22-million-and-growing audience waiting to be led into the future.
In the near term, expect a frenetic buildup of broadband, the lickety-split Internet connection that – whether it comes into your house via cable, a DSL phone line, or a satellite link – will make downloading music and, someday, entire movies as easy as flipping channels. Says Peter Clemente, VP of Internet database marketing firm Cyber Dialogue, ”There hasn’t been enough of a compelling reason for a consumer to pay that $40 access fee [for, say, Road Runner] without that content.” With Time Warner’s entertainment goods and AOL’s online savvy, there is now.
How will the merger affect the way we listen to music, watch TV, and go to the movies? When can we start downloading Star Wars III straight to our TV sets? And does this spell the end of the wild, wild Web in favor of a corporate Net brought to you by Steve ‘n’ Jerry? Here’s the breakdown:
– MUSIC If the merger goes through, Warner Music gets a huge head start in the digital-download race. With AOL’s mass audience and properties such as MP3 player Winamp and Net-radio broadcaster Spinner, the combined Warner labels now have first crack at the Net market (though AOL will continue to sell non-Warner albums). As for the other half of the marriage, ”if music is food for the soul, AOL just bought one of the food groups,” says Joanne Marino, editor of music site Webnoize. And in the next decade, as more consumers get broadband connections, prepare for a seismic shift. ”People are not necessarily going to own music the way they do today,” says Aram Sinnreich, an analyst at Internet research firm Jupiter Communications. ”It might be something closer to a subscription service, where people will have the ability to listen to an entire catalog of music at their leisure. But that right might expire if they terminate their relationship with AOL.”