How Music and Movie Bigs Can Thrive

This column was originally published on RealMoney on Nov. 17 at 11:35 a.m. EST.

Over the past two years, I've devoted a lot of words to the problems that the content owners are running into, including piracy, the death of broadcast and the end of interstitial commercials.

But all is not lost. There are lots of opportunities for the content owners to not just survive but find new avenues of explosive growth. Put simply, they need to leverage the ongoing expansion of distribution channels.

Ten years ago, music labels such as Sony BMG and Warner Music Group (WMG) had but one major consumer distribution outlet: music retailers such as Wal-Mart, Best Buy and K-Tel (remember them?!). They also had subscription companies such as Columbia House, which mail CDs to customers. And, of course, radio stations -- the terrestrial kind -- would play an endless loop of the same ol' tired top-40 hits from today, yesterday and on back to the 1950s.

Ten years ago, video content owners such as Time Warner(TWX) and Disney(DIS) had but one major consumer distribution outlet for their catalogued content: broadcast television.

Fast forward to today (pun intended), and the number of outlets for their content has exploded. You can still go to the store to buy CDs, but you can also download music from dozens of Internet sites. You can listen to satellite radio. You can listen to a podcast. And so on.

Skip to the present (yes, pun still intended) and not only can you flip on your TV to watch video, you can download it from Apple(AAPL), you can catch clips on your cell phone, you can buy a DVD set of your favorite show.

The music and video industries have successfully leveraged new outlet channels for years. The music industry successfully leveraged radio to bring artists to the masses, and it found a boon in MTV putting music on the tube. They've also made consumers go through upgrade cycle after upgrade cycle, from records to cassettes and so on.