Corporate Conglomerate Contradiction

I love watching when companies get so big that sometimes their sub-units have conflicting business interests. I find it amusing (if not annoying) that I can burn music onto a blank Sony CD, using a Sony CD burner, but it won't play on my Sony DVD player, and that Sony Music releases commercial audio CD's that could crash my computer (say, a Sony VAIO) in their efforts to prevent me from loading the audio onto the computer itself. Sony owns both sides of the house when it comes to allowing and preventing me from trying to copy music.

Today, I read that AOL Time Warner faces the same contadiction. As reported on AOLTW subisidary CNN's web site, TimeWarner Cable is going to start testing a set-top box (like TiVo) that would allow customers to record / pause / fast forward / etc TV programs — a trend that the chairman of Turner Broadcasting said last week could lead to increased programming costs for consumers, because lost advertising revenue has to be made up somewhere.

48 years ago, Walt Disney stunned his fellow movie studios by embracing television, which they felt was completely at odds with the revenue stream from movie-house attendance. Instead, he parlayed the revenue from the TV show to build Disneyland (which, by the way, celebrated 47 years of operation yesterday), and used the revenue from films to improve the theme park. Today, however, even Disney isn't immune to conflicting internal interests. The arm of the company that makes revenue by licensing the characters to tacky T-shirt shops all over the country isn't accountable for any damage to potential income by the mall-based retail stores or theme park merchandise operations. Who cares if the consumer can get a nearly identical product for less money rom a competitor? Licensing got its cut.

Sometimes, the smaller companies have the advantage of a singular focus.