In the beginning of the 20th century, there was the automobile boom. In the middle, there was the television boom. At the end, there was the Internet boom. This century starts out with another boom: the new age of media content.
During every boom a lot of money is made and a lot is lost. This boom will be no different; that's what makes it so exciting.
Up until the Internet boom we received content either through TV, radio or newspaper. Now, throw all of that out the window, because we are entering a new era in which the Internet is a huge, although not exclusive, part of content delivery.
The heady predictions about the Internet in the 1990s are now coming true. Internet phone calls, online bill paying, downloadable music and movies, exclusive Web video content, online banking, the transformation of cell phones into our personal computers and high-speed Internet access on those cell phones are now the norm.
In 2000 just 5 million Americans had high speed access. By 2005, the number had grown to 73 million, according to the Pew Internet and American Life Project. Just think, how few people even had cell phones 10 years ago.
While the Net is still an unbelievable growth story, the thing that is truly shocking to me is how the ways in which content is distributed are changing almost daily.
changed how we listen to music. They may not have been the first, but they were the ones that changed the landscape of how music is delivered to consumers. The iTunes music store has sold more than 1 billion songs. Apple will do the same for video content, and I believe its stock is a buy here.
Traditional terrestrial music radio stations are dead; some just have not realized it yet. There are too many ways to listen to music, from iPods to satellite radio. The only thing that is not dead in radio is original content, which cannot be replicated. Anything that can be replicated (e.g. music) is dead.
High definition (HD) radio will technologically leapfrog satellite radio.
XM Satellite Radio
( XMSR) and
Sirius Satellite Radio
still have a pulse, but they are on life support. They may find a niche, but it will not be the widespread market that many once believed.
On April 24
announced that its HD radio service, Format Lab, will be expanded from 28 to almost 50 cities. Clear Channel has 196 stations in 48 markets that are now capable of receiving digital radio and is working with
( MOT) to deliver programming content to cell phones. HD radio will be able to tailor content for local audiences.
There will be many companies that offer HD radio with many channels and local programming. This will be the first nail in the coffin for satellite radio.
On the Go
The cell phones is becoming an indispensable tool in modern life, just as the PC did in the 1990s. Cell phones that play music, videos, video games, and, of course, provide high-speed Internet access, will soon be the norm.
Slingbox already allows consumers to hook up their phones to their
and watch whatever signal is on their television via their cell phone wherever they are. Talk about amazing. By allowing only one stream at a time, the technology avoids copyright infringement.
Advertising agencies are going to have to morph quickly and often to keep their customer's ad dollars well spent. However, the content distributors that also sell ads will potentially make money from ads and subscriptions. This is what the television networks have in mind when they allow their shows to be downloaded almost immediately after they are broadcast. It's also what
is aiming for with its newly launched free broadband channel called "innertube". In fairness, this is what XM and Sirius have in mind as well.
recent $1 billion-dollar buying spree of Internet companies signals its belief in the Web as a distribution method for content. Its MySpace.com unit has gone from 32 million users to 65 million and could soon overtake
in having the Web's biggest audience. Mr. Murdoch has claimed the future of Fox is Internet and radio.
Within the content-media company space, I believe News Corp. is one of the more compelling stocks to own. (Full disclosure: I am a regular guest on Fox News.)
When the railroad boom first came along, the only safe play was the railroad track. In the same fashion, I believe the mobile phone content enablers are a great play.
April 8 because of its acquisition of m-Qube, a content enabler. Motricity is a pure play that will go public later this year. MSpot is a privately held company that works closely with
that brings audio and video to phones.
In the next few years, the way we view content will be forever changed. Those who find the best ways to distribute that content will become very rich. As an investor, this is one of the most exciting times to watch and invest in the new media age.
Feeling at Home
This week I bought some homebuilders. I am not a contrarian; I just believe they are priced at virtually liquidation levels. I bought
, and some more shares of
It's the oldest adage on Wall Street: Buy low and sell high. However, to buy low, you have to have the courage to go against the grain.
being poor is bad, staying that way is stupid.
At the time of publication Layfield was long Toll, Hovnanian, Standard Pacific, VeriSign and a private equity stake in Motricity, although holdings can change at any time. A former All-American offensive lineman at Abilene Christian University, John Layfield played professional football for the then-Los Angeles Raiders and later in the World League. After wrestling in Japan, Mexico and Europe, Layfield arrived in the WWE in the mid-1990's. A former WWE champion, JBL was a featured wrester at WrestleMania 21 and can also be seen on Friday Night SmackDown! on UPN. Outside of the ring, JBL is a self-taught investor who was recruited to write a personal finance book, Have More Money Now, which was released in the summer of 2003. He has appeared on finance shows on CNN and Fox News Network. He is co-chairman of the Smackdown Your Vote! Campaign and he has joined both the USO and Armed Forces Entertainment (AFE) for tours through Iraq, Afghanistan and other Middle East countries. He regularly visits the Walter Reed Army Medical Center and the Bethesda naval hospital to meet with wounded troops.