by Norman Horowitz
In the early ’50s, a senior executive at Fox was trying to interest his boss Spyros Skouras in “the business of television.” Skouras dragged him over to a ten-inch, black-and-white TV set and said, “Do you think that anyone is going to watch this when they can go to the movies and see films in Cinemascope and Technicolor?”
Screen Gems, the television division of Columbia Pictures, was formed in the early ’50s with the management of Columbia Pictures similarly convinced that television couldn’t compete with the experience of going to the movies. Fortunately for Columbia, Screen Gems not only embraced television production, but they started a television stations division, among many other activities.
Over the years, I’ve tried not to be a Luddite, rejecting new technologies, but like Skouras and Columbia Pictures, it’s a difficult thing for me to do.
As television evolved, I admit that I, a bit more than a generation later, diminished the commercial viability of the delivery of any content to a cell phone. Through the years, I followed up this bit of stupidity with my denial of the viability of the delivery of “content” to other handheld devices. As my predecessors did 50+ years ago, I doubted that people would watch any content on a comparatively itsy bitsy screen when they could go home and watch it on their wall-sized television set.
And now, a new opportunity for me to be wrong:
Amazon.com Inc., the world’s largest online retailer, unveiled its Kindle Fire tablet computer, taking aim at Apple Inc.’s bestselling iPad with a device that’s smaller and less than half the price.
The Kindle Fire will have a 7-inch display and sell for $199, compared with $499 for Apple’s cheapest iPad…
Apple started selling the original iPad in April 2010, and introduced the iPad 2 in March of this year. The touch-screen device, which has a 9.7-inch diagonal display, is already Apple’s biggest source of revenue after the iPhone.
In other words, consumers will have a choice between two largely incompatible digital systems where they can read e-books, stream video, and listen to music.
In my business career, a lifetime ago in the ’80s, there were two non-compatible video cassette systems, and it made me and everyone else in the business crazy. One system prevailed, but it was costly for almost everyone that the systems weren’t compatible.
I expect that the existent two incompatible handheld devices will live in peace and harmony together, and both systems will prosper side-by-side. They are, after all, going after different goals:
Amazon is willing to treat hardware as a loss-leader — in order to sell more media.
Apple has historically made higher margins on its hardware and treated media as an adjunct.
Sixty years later and here I am, just like Skouras, wondering why anyone would hang out and watch a device with a small screen when they can go home and watch it on a gigantic device.
Twenty years ago, my friend Sam Turcotte of Sun Microsystems asked me if I had watched a movie on my cell phone on the way to the meeting, and I laughed and said no. We agreed, however, that watching movies on mobile devices would happen someday.
Well, someday is here. I wonder what tomorrow will bring.