At a panel discussion at the Media/Options '94 conference in New York last week, executives from Simba Information, a Wilton, Conn., research and consulting company, said content providers should leverage their strengths as interactive technologies develop.
Simba President Alan Brigish said publishers should renegotiate their deals with online services amid word that Microsoft Corp. will share revenues equally with content providers in its upcoming service. Currently, online services pay publishers only 10% to 15% of revenues derived from them.
But despite Microsoft's expected online move (and its other interactive developments), Mr. Brigish believes that company has already "peaked," largely because it has little control over "enabling technology of the future," like digital compression.
Instead, Simba expects companies like Oracle Corp., General Magic, Sega of America and AT&T Bell Labs to have the edge because of their strengths in such technology.
Meanwhile, Mr. Brigish believes stalled telephone/cable deals will have "positive effects for consumers and publishers," because the companies "will be forced to accelerate their plans for upgrading phone and cable networks for broadband use."
Simba predicts regional bell operating companies like Southwestern Bell will sell non-core assets to focus on new capital investments in these areas, but cable companies may be left in the dark. Diminished returns for cable operators, especially those burdened with debt, may make it hard to fund new ventures.
One investment such companies may make is in online services. Simba predicts America Online and CompuServe will be sold within five years, probably to large cable TV or phone companies.
And despite the technology talk, "content is still king for one main reason: leverage," Mr. Brigish said, adding that content providers can simply repackage material for different formats.
The Media/Options conference was sponsored by Cowles Business Media, which also owns a minority stake in Simba.