Memo to: Media Monopolists

This must really piss you off. So let me be the first to welcome you to a new century. In this new century, all businesspeople have the same goal: to establish a direct and positive relationship with the end user.

It sounds easy. But it's not. It's scary. And it's likely to wreck your business before it saves it. Feel like checking out the new rules? First, go to www.stickyflicks.com . David Burke, a creator of animated whacko content for TV, has assembled a few brilliant scoundrels and put up a site filled with juvenile humor and neat animation. Oh, and by the way: People are flocking to it.

Then visit www.publisherslunch.com, and fill out the subscription form to receive Publishers Lunch, a daily newsletter chronicling what's going on in the book business. It's free, of course, always interesting, and occasionally juicy. Oh, and did I mention that it's written and distributed by one guy, who increases his power by talking to more than half of the influential people in the book business every working day?

Finally, go to www.live365.com -- a site that lists more than 40,000 different radio stations. Every station is on right now. If one station chooses to run a lot of commercials, how hard it is to find one that isn't? Imagine that you're a station manager in, say, Chicago, and you're used to competing against 2 or 3 stations with a similar format. What happens when you have 5,000 nearly identical competitors? And when my car radio can pick up Internet stations?

Here's the problem: You monopolists appear to believe that you have a right to business as usual. You believe that if the rules of the marketplace change, it's not fair. You believe that you somehow deserve the private planes, the great parties, and the obscene profits. You also seem to think that if your monopoly were to go away, so would all of the good ideas.

The truth is, the supply is in terrific shape, thanks. In fact, there's never been more to choose from. The only thing that would go away would be your profits. Ouch.

The Path to the Future

Your response? An overwhelming desire for the monopoly to remain exactly the way it is. This feeling is not original. Nor is your solution original. Since the days of Teddy Roosevelt, members of the monopoly club have always done the same thing: gone directly to Congress.

The government has a long history of helping monopolists. And try as it might, in every single case, Congress has failed. Why? Technology, capitalism, and consumer demand destroy just about any monopoly that can be destroyed. Legislation can prolong the pain, but sooner or later, the monopoly loses. The fascinating lesson is that once the monopolies disappear, they're almost always replaced by markets that are more profitable for more companies (and better for more consumers) than the old monopolized market ever was.

Look at the record business for a second. Here's the good news: Artists can make a record with hardly any cash. Online retailers have infinite shelf space. There are thousands of Internet radio stations that sap the power of a small number of program directors. Near-instant file sharing can help spread a great song across the world. (Check out www.cdbaby.com to see this system working wonders.)

Why isn't this a scenario for tremendous commercial innovation? Isn't it possible that there will be more music, at lower cost, for more consumers? Isn't it likely that many people who would never have made an album will do so now?

There are plenty of winners in this new world. Rickie Lee Jones wins when she can self-publish her new CD (the CD that she really wanted to publish, not her overproduced live-hits Warner Bros. Records CD) at www.rickieleejones.com . If she sells 20,000 copies, she's way ahead of where she might be if Warner Bros. had published it. Better still, Jones and her team could build an entirely new and different business, where the music is free but the concert tickets cost money. With a million fans around the world (enrolled in her email fan club, even!), she could sell out concert venues anywhere on the planet.

Or consider this possibility: I might be wrong! Maybe there's no way at all for her to make a fortune. Perhaps she needs to get a day job. Is that going to force her (and thousands who would like to be her) to retire? Somehow, I don't believe that sucking the money out of the music business will eliminate the musicians. I do believe, though, that it will change the middlemen.

Is this "the answer"? Who knows? But I can tell you this: If it's not the right answer, it's certainly the right direction.

But what about Arnold Schwarzenegger? you ask. How will he be able to make $100 million movies if they're pirated on DVD? Maybe he can't. Maybe a society filled with consumers who pirate doesn't deserve $100 million movies. Perhaps they go away, just as ornate Broadway musicals are a rarity or the June Taylor Dancers are no longer able to get work. Somehow, I think we'll all survive without Terminator 10.