Yes the whole content system is a mess. Newspapers, magazines, book publishing, music, movies and now TV – all are old school content business models that are in a state of upheaval. Unfortunately, the people in charge of these content systems are fighting the change that is happening – happening in large part because of the Internet – instead of trying to start making changes NOW.

The Arab Spring of 2011 was a similar model: change was coming in the for of popular protests, furthered by social networks and the Internet, fought bitterly and fatally by the regimes in place. But to what end? Many dead and injured BUT CHANGE HAPPENED ANYWAY!

Many thought that after Napster, the music industry would stop being stupid and embrace the new music distribution models evolving. The Industry didn’t but the artists who did – like OAR, Dave Matthews Band and Pearl Jam (to name a few of my favorites) – have been hugely successful and profitable.

Why can’t the rest of the Industry see that?

Radio is one way to listen to music, but let’s face it listening to the same 100 songs plus the syndicated DJ’s is annoying. Because of consolidation in radio station ownership, the powers that be can only look at the bottom line. Wrong place to look. Successful businesses think about Employees and Customers (in that order). From there, a successful business model is executed.

Albert Einstein said, “Try not to become a man of success but rather to become a man of value.” I take that to mean, “Give Vale First and Foremost.” All else flows from that.

With SOPA and ProtectIP, the RIAA and the MPAA hope to legislate morals or protections. Why? Why not just your customers what they want, teh way they want it?

After Napster, there were numerous other P2P sites like Limewire that popped up. Then a number of online radio sites like Pandora, Grooveshark, Spotify, Rdio, and more. All have had some fight with the RIAA over licensing. Now we have Google Music, Amazon Cloud Player and Apple’s iCloud, too.

My buddy suggested that their be a website to donate directly to an artist. For example, you downloaded – legally or illegally – a song or album hat you liked so much, so wanted to give some money to the artist. That’s not a bad way to do it.

One comedian, Louis CK, who is maybe a B list-er, just made over $1 million in revenue on a comedy show, Live at the Beacon, that he produced and distributed himself online at $5 per copy.

The Internet works as a model for distribution. The content is key. CK proved that and so do many authors who self-produce on Lulu and Kindle.

TechDirt is probably the one website that I read that is on top of the copyright-distribution-legislation issues. In a recent article, TechDirt kind of sums up the consumer thinking that WB (and others in the Netflix fight) don’t understand: ‘It appears that WB is implicitly admitting that the strategy of delaying the rental period of a movie by 28 days has been a total failure, in the decision to increase the delay to 56 days. They’re basically admitting that not enough people were “buying” in those 28 days… so they somehow think that doubling the wait will increase the purchases. It won’t. If people really want to pay the extra money to buy the DVD, they’re likely to do so pretty early on. It’s not like they’re waiting 50 days in and then saying “gee, I can’t rent the movie, so I’ll just pay a lot more money than necessary to own an obsolete piece of plastic.” ” BINGO!

People want to stream their content – video, music, TV, movies, etc. – through whatever device they have – blu-ray, xbox, PS3, Roku, GoogleTV, AppleTV, laptop, tablet, etc. [Same holds true for blogs, magazines, and books.]

TechDirt goes on to explain, “I do believe that [MPAA and RIAA] current strategies of alienating their best customers, relying on government protection, and pretending this is some sort of epic battle between good and evil aren’t just doomed to fail, they’re actively making things worse for themselves.”

I’m not encouraging piracy. I actually despise it. We live in an immediate gratification culture. Vendors have to accept that.

We also live in an age where people expect a lot for free. Facebook is free, but people still bitch about it. So’s this blog and same thing. Culture has a high expectation. It’s about perceived value.

Content is really important. Government has to keep the masses entertained or they will revolt.

But we have a spiraling problem: content costs a lot of make and disposable income in America is declining. That combination is a disaster waiting to happen.

Let’s look at the NFL. They just raised their fees to the TV channels that carry them by 60-70%! [Alan Quayle has a good piece on it.] So ESPN, which is already the most expensive channel for service providers to deal with, will be raising its rates to cover this cost. Even the extra $3.50 is just for one channel. What about all the other channels?

I have a rant about ESPN in general anyway. Are they really a sports channel??? Besides college bowl games and some college basketball, the only sport it televises is Monday Night Football, which had bad games all year. This creates a brand issue for them. PBA, Poker and other non-sport stuff is cheap to produce but is filler since they can’t run talk-shows and Sportscenter all day (just most of it). ESPN has the same issue as the music and movie industry: too much looking at profit, not enough good content to warrant the money.

We are seeing cord cutting, because the consumer dollars are decreasing — and they would rather give up TV than cellphones. Cellphone bills average more than residential line bills used to. And for a family of 4 it is easily 4 times what the home phone used to cost. Granted you can do more with it, but dollars are dollars. And with 16% of the population at poverty level starting thinking what that means for the service economy engine and all types of businesses.

You have economic and technological forces working to breakdown old school content systems. It will be interesting to see if any lessons are learned and applied in 2012. I highly doubt it because:

Lightsquared is facing numerous obstacles on its way to launching a nationwide (*cough*cough*) 4G network with its spectrum.

One obstacle: MONEY!  Sprint gave them until next month to start or lose the Sprint investment (which Sprint needs to continue to fund Clearwire).

2nd obstacle: GPS! Studies show that the spectrum – which abuts the GPS spectrum – interferes with GPS about 70% of the time.

3rd obstacle: Congress. A new Defense bill in Congress will make it harder for Lightsquared to use the spectrum. The bill requires the FCC to wait until all issues with interference are cleared up. That could take a while – if ever, since no one checks power output on radio transmissions.

IMO, it’s unlikely Lightsquared will ever get this off the ground, which means that the spectrum that DISH owns will become significant. It also means that if Clearwire can get its act together, it could become the go-to 4G supplier for a lot of companies – like T-Mobile, Sprint, Leap, Cricket, US Cellular, etc.

So here is the new strategy for the Channel for Level3.

“Late 2011 was a busy time for the Level 3 Indirect Channel. Our first priority after the acquisition closed was to determine a partner program structure that best supports our partner bases followed by the immediate need to create an organization which can provide greater resources to further enable your success.< br/>”After gathering feedback and careful consideration, we are instituting a model that will provide support at a national level for our Master Agents and a regionally focused Channel Manager strategy for our Direct and Sub Agents.< br/>”Our newly created National Partner Sales team will focus on the Level 3 Master Agents, facilitating the strategic relationship with the Master Agent as well as their sub agent base. The team will work closely with our Master Agents to reignite the sub agent community with targeted recruitment and joint sales activities. In conjunction, we will continue to have regional sales teams, concentrating on driving sales with local partners. Direct Agents will receive dedicated regional resources which will provide greater attention and ability to become more intimately engaged at the partner level. With the combined sales teams, we now have more resources available allowing smaller territories per Channel Manager equating to more time to support you on sales opportunities.< br/>”Furthermore, our partner support has expanded with a larger Sales Engineering team focusing on the pre-sales solution design. We also created the Partner Experience Team, which will be focused on empowering the partner and providing the tools and knowledge to be able to take an opportunity from Quote to Order. There will also be an expanded Quote Desk which will provide dedicated resources to our Channel Managers during the sales engagement cycle.< br/>”The new structure is effective today, January 5th, although the Partner Experience Team Pod structure is currently in development. We look forward to sharing those details with you as they become available. Please continue to leverage your legacy processes and teams for Partner Support. In addition, Partners should continue to use MasterStream and uCommand for quotes for the legacy companies.< br/>”We will notify partners of their new Channel Support Team over the next few days and look forward to providing more resources and assistance to be successful.< br/>”We look forward to working together to achieve mutual success in 2012!”< br/>Regards,< br/>Mike Jerich, Vice President, Indirect Channels, Level(3)

Seems like a good plan: add more people. And L3 already has an effective online portal for quoting, so this should help with sales increases for 2012 (which they desperately need.)

Yesterday I mentioned that Gladstone is the new landlord for one of Expedient’s data centers. Today, zColo (of the Zayo Group) “acquired MarquisNet’s data-center business in Las Vegas, Nevada. The 28,000 square foot data center, located at 7185 Pollock Drive, will be the twelfth zColo Colocation facility,” according to the release.

And the Channel dumping InterNAP buys Voxel for $30M. “Internap, the leader in intelligent IT Infrastructure solutions, has joined with Voxel, the “go to” partner for scaling demanding web applications to provide you significantly enhanced IT Infrastructure.” It just adds some virtualization and apps to the mix, along with some revenue. InterNAP needs the revenue, since it canned its Channel last year.

I have been reading some good stuff that I want to share.

Rich Tehrani, CEO of TMC, writes about Apple hardware versus the rest of the computer/tablet business. Kindle sold 4M units in December alone. The Amazon Kindle Fire is based on Android. It adds to the Android family. Rich points out that Apple products are still expensive, but competitors are selling units due to price points.

Another post is by Dan Rayburn about the Akamai deal to buy Cotendo, but the interesting stuff was his take on AT&T and CDN.

It amazes me wonder why there is always so much speculation about AT&T but very little about VZ. sure, recently we have the “Will VZ buy Netflix?” but with AT&T it’s always something – cell, wireline divestiture, CDN, International, cloud – maybe its because AT&T moves so slow. Perhaps if the company wasn’t a labyrinth of silos of legacy business – SBC, LD, Ameritech, BST, etc. – it could do business more efficiently and not piss off so many people. Then again, probably not.

NY’s Broadsoft based Hosted VoIP Provider, Stage 2 Networks, started the new year with the acquisition of the Hosted VoIP Division of Consolidated Technologies, Inc., a New York City area Avaya partner. Stage 2 needed the growth is my take from the PR comments from CEO Joe Gillette. There will be more of this in 2012, because there are too many VoIP Providers and most have very little growth. This transaction is similar to Telovations grabbing FeatureTel. It costs money to run a Broadsoft. Organic sales aren’t coming fast enough to hit scale, so buy some customers and some revenue.

With 2012, the market will see the MSO Giants – Cox and Comcast – start crushing it in the Hosted VoIP space. They own the network to deliver QOS and to price beat any competitor.

IN data center news, the REIT (real estate investment trust) Gladstone purchased the 20K square foot data center at 810 Parish Street in Pittsburgh, home of Expedient Communications, for $4M.