The Convergence Commencement?

by Rohit Shukla

November 18, 2002

With more digital content available online, is convergence renewing or is it long dead? Maybe it's time to retire the word itself.

Convergence is a buzzword that has rapidly faded from the lips of charlatan and mogul alike. Yet it was the basis for the mega-mergers in the entertainment industry, which have unraveled one by one over the course of the last few months. And it was the foundation of market-busting efforts by technology providers seeking to accelerate the introduction of multi-capable computing into the home only to be burned by excess across the board, by telecommunications companies who nearly destroyed themselves on accommodating the new demand that the convergence future was bringing their way, of upstarts who dared to open the creative platform and product to a new audience and saw that audience wilt from boredom, done in by Internet Attention Deficit Disorder.

The promise, you will recall, was the coming together, in a large and predictable scheme, of computing, communications and entertainment. With broadband poised to become a commodity, we were told, and with quantum leaps of computing power now available to the average consumer, and with new possibilities for the creation, manipulation, presentation and transport of content between increasingly connected people around the planet, a new era of disruption would be unleashed. The next few years, after this audacious vision was first introduced--and then embraced by virtually every technology executive and entertainment guru--saw a raft of acquisitions, asset reallocations and public market debuts, and the dawn of a whole new industry, "new media", predicated on the creation of new content.

The crowning jewel was the acquisition of Time Warner, the entertainment industry behemoth, by America Online (AOL), the lowly non-broadband ISP. Elliot Borin, writing in this issue of Larta VOX observes that AOL is now falling on its own petard, quite possibly unable for legal reasons to entice customers to its vision for convergence, which in its parlance means controlling both content and distribution.

Meanwhile, the whole shebang is in deep doo-doo: telecommunications companies, overestimating consumer demand and appetite for media-rich content, overpaid for wireless auctions and underestimated the cost of upgrading and installing infrastructure; the technology companies, hardware and software sectors alike were similarly caught unawares by the fall in consumer demand, and the realities of a brutal business slowdown finally caught up with the dream. It is now something of a nightmare, from which Vivendi Universal has awakened, screaming, shedding its entertainment assets. Disney preceded this binge by deciding much earlier to allow its great Internet flirtation to fizzle out. Even Rupert Murdoch has witnessed the downsizing of his dream, as his varied media interests have not succeeded in meshing together a seamless business.

It seems clearer today that the position of large behemoths does not insulate them from the vicissitudes of the technology or from the great fact of our time, that business and individual consumers, when faced with a plethora of choices, and spoiled by the low price points of content on the Web, are loathe to become new, high-paying customers. Thus the ROI case for the indulgent schemes of convergence cannot easily be made.

And yet, both in small and in profound ways, the promise of convergence itself is finding its way to consumers without the mediation of the powerhouses of content. When Eisner accused the technology companies a few months ago of conspiring to undercut the proprietary interests of content producers, he was basically putting a finger in the eye of the greatest technology explosion in consumer history. Consumers have become adept digital downloaders, game players, buyers of personal gadgetry geared to personalized experience--the promise of "what you want, when you want it." If ever there was a slogan for the convergence movement, this is it.

Witness the music industry's desperate struggle with the online music platforms in a battle that cannot easily be won in the courts, because the digital genie is out of the bottle, and it cannot be put back. Convergence, to large entertainment companies, is an opportunity to leverage multiple content assets on new platforms and gain new consumers along the way. Convergence, to millions of consumers, represents liberation from that very same model, allowing them to store their favorite songs and artists, downloaded from the Web, in their own way, and even potentially to manipulate them for their own purposes. This individualistic expression of personal taste and preferences is a powerful new force, and one that calls for radical new content, extended to all spheres of the entertainment experience (indeed to all corners of our content world).

So, Movielink, taking a page from those battles, has embraced that future, confident that the need for personalized experience is a new, credible one in our new world. Despite technical and convenience issues (remember the first VCR's were clunky and difficult monstrosities), what the company will gain is a greater degree of savvy, and along the way, will establish a platform and a standard that promises to be convenient and competitive. Meanwhile, the challenge to build a simple, effective and compelling platform is considerable, in a time when all consumers are creators, when they face an explosion of choice, when chat represents a powerful new form of social interaction, and when the old arbiters of taste are now either irrelevant or worse, curiosities.

It is time to retire the word. We are heading towards convergence, and we may not like it, but like the "moving finger", we are compelled to "move on", regardless of "piety (nor) wit."