The quote above is from the opening salvo in a now-famous recent exchange between Boxee CEO Avner Ronen and billionaire entrepreneur Mark Cuban. The beginning of this war of words was Cuban's March 20 blog entry "Why Do Internet People Think Content People are Stupid?", in which Cuban responded to a recent blog entry by Ronen asserting that eventually media content purchasing would be "a la carte" rather than channel by channel. Cuban's mountaintop proclamation is that the cable TV model is the "EXACT RIGHT MODEL" (caps are Cuban's) for content providers, and that content people would be cutting their own throat to upset cable companies who are "the people who pay the bills" by supporting a la carte methods of programming distribution. Unfortunately, you can't make a failing model into a good one by just proclaiming it is so.

Ronen's response to Cuban in the Boxee blog expanded into a lively exchange between the two. One result has been a lot of publicity for Boxee, which Ronen certainly can't think of as a bad thing. The debate has media fans choosing sides, with the extreme "all content should be free" people to one end, the equally extreme "preserve the status quo at all costs" folks to the other — and the majority of media consumers, content providers and other interested parties falling as usual along the spectrum in the middle.

Cuban's assertion that the cable companies are "the people who pay the bills" and Ronen's response that "the user should and will be the one making the decisions on what he is going to pay for" is the heart of the argument. These positions display why Ronen — and Boxee — "gets it" and Cuban obviously does not.

Cuban still thinks that "the people who pay the bills" are the cable companies. A lot of people have called that one wrong in a lot of other industries, and paid for it by being left far behind when the paradigm shifted. The cable companies are the middlemen, whose usefulness is solely in their ability to move the product from the creator to the consumer in the most efficient manner. When a middleman's efficiency starts to falter and another middleman crops up who does it better, the flow of product to consumer will follow the path of least resistance.

Smart middlemen shift their business model to improve their efficiency and stay in the flow. Those who are more stubborn than smart try to force the flow to stay in their channel, despite their growing inefficiency. The latter can succeed for awhile by spending more and more of their profits on building dams to artificially hamper the efficiency of other channels, and/or trying to punish providers and consumers who seek more efficient flow outside of the traditional middleman channels. Eventually, these efforts fail, though a middleman who has been very successful for a long time can slow the process of change down by throwing money at it until they are too broke to continue. The people who really pay the bills are the consumers, and sooner or later the consumers get what they want. This is not to say they always get what is best for them, but in the long run the most efficient flow of desired product to hungry consumer will win out. 

Technological change is the disruptive force that changes the paradigm, taking what used to be an efficient middleman and turning them into an obstruction that the natural flow will tend to try to move around. For a long time, the most efficient methods of moving entertainment media content to consumers were physical delivery of recordings and broadcasting. Physical delivery offered selectivity — you could choose exactly what you wanted. But physical recordings took up physical space and cost money to produce and move around. If you wanted to consume a lot, but were less selective about what you consumed, broadcasting was the way to go. You got a lot, but you had to take what everyone else was getting.

Cable TV was itself a disruptive technology, as it began to make "narrowcasting" possible. The ability to have more and more channels made it efficient for those channels to be aimed at more selective audiences. In turn, digital recording methods made it less difficult to duplicate and store recordings. The gap narrowed as choice flourished.

The intersection of personal computers and world-wide networking brought the watershed moment, however, as broadcasting and physical delivery intersected at last due to technological change. The computer made it possible for anyone to easily digitize content and store it compactly. World-wide computer networking touching every home and business made it possible to "broadcast" content as specifically as we wanted, instantaneously. The Internet changed everything. One creator can now deliver content efficiently to a single target consumer, or a dozen, or a million — on the consumer's desired time schedule. Middlemen are still useful, but they serve more as computer-enhanced traffic cops and ultra-efficient librarians, making it possible for all that content to flow freely and for consumers to make sense of the flood of content now available to them.

Content providers who are tied too strongly to one or two old methods of selling their content are going to be hurt very badly in the long run. Middlemen who don't know how to do anything but deliver content in one way will find themselves abandoned unless they change their position in the stream. Consumers will be initially frustrated with attempts to block the efficient flow they desire — but in the long run they will win because they are the only source of money in the chain! They will pay to get what they want, and withhold payment from those who obstruct them.

That's what Ronen and Boxee "get" that Cuban does not. Middlemen cannot sell to each other if the consumer abandons them. They can throw money into blockages and punishing consumers who stray for awhile, but since the money ultimately comes from those consumers, they can't do so forever.

The cable middlemen were among the first to make use of the new digital technologies themselves, and cable systems are still among the most efficient suppliers of digital bandwidth to consumers. Content providers say they cannot afford to make cable companies angry, but that just isn't so. Cable companies are in an excellent position to stay in the efficient flow business, even as the paradigm shifts — if they are smart enough to realize that "narrowcasting" has taken a quantum leap and left the idea of the cable channel package behind. This is not the real reason that the content providers are dragging their feet. They lag behind because they still believe it is cheaper and easier to obstruct change than do the hard work of revamping their distribution models.

The incestuous nature of the links between content creators and content middlemen in media makes change even more difficult. The creative half of a company stands to make a bundle by exploiting new, hot markets with new types of content that could not exist under old paradigms — but the delivery half of the same company fears losing their jobs because they can't change direction fast enough (or is too lazy and fat and set in their ways to try).

Meanwhile, there is always someone who senses the new paradigm and works hard to be in the right place when the new flow pattern is recognized and established. This is where Boxee "gets it".

Boxee's people know that the personal computer and the Internet have created a situation where the pre-bundled content channel no longer makes sense. The flow needs a different type of traffic cop now. There is a torrent of digital media aimed at both ultra-narrow and ultra-broad audiences. The traffic cop who can make sure each consumer can find, control, and direct the media content he wants into whatever space and device he chooses is the one who the consumers and content providers alike will keep on the job.

Boxee is not a "packager" or a "bundler". Boxee is an "enabler". The job of Boxee is to make it possible for all the digital media content available to be efficiently brought together, sorted, and delivered to wherever you are — when you want it. Boxee is designed to be able to embrace any sort of on-demand purchase and delivery paradigm from ad-supported free media to subscription content to pay-as-you-go material with as few restrictions as possible. Boxee is infinitely more efficient than using a hundred different delivery channels because Boxee simplifies and standardizes the human interface for one set of controls. You have content? Deliver it and develop your business model any way you wish. Pump it out digitally and Boxee can display it for your audience, wherever they are. Boxee is in the business of providing a smooth user experience. It does not compete with the content provider; it enhances the end delivery of the product.

Boxee's plug-in architecture keeps getting better. The designers have wisely chosen to keep Boxee flexible, and to embrace as many providers as possible. Some providers fear that embrace, but I cannot understand why any content provider of any sort would want to block Boxee. The idea that a provider should want you to view his content — but not TOO easily — is insane. The more content that is available in one place with one good clean interface, the better. Consumers want both ease of use and massive choice. It is now possible to have both. If a content provider is not embracing that, he is leaving money on the table just because he is too fearful or too lazy to pick it up.

As a consumer, the CouchGuy wants to invest in good hardware that will display all my content to best advantage. then to bring all my available content to that hardware as efficiently as possible. My Boxee/Apple TV combination is a great bridge between my hardware and my content. Here's a big thank you to Avner and the Boxee crew. They "get it" and moved early to show us that they do. They are as strongly consumer-oriented as any company I have seen, and yet their open-arms approach to content providers offers that end of the flow infinite opportunities as well. Time will tell if they are in the right place at the right time to reap the rewards for their vision, but I find myself really rooting for them to do so. If you want ease, and choice, and quality, and a good consumer experience, you should be rooting for them too.