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. Apple ( AAPL - Get Report) 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 and Sirius Satellite Radio ( SIRI - Get Report) 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 Clear Channel ( CCU - Get Report) 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 Motorola 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.
News Corp.'s ( NWS - Get Report) 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 Yahoo! ( YHOO) 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. I profiled VeriSign ( VRSN - Get Report) on
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 Sprint ( S) 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.