AOL, Time Warner, Amazon and Covey: A New Future for Business

Last week saw the demise of the famed relationship between AOL and Time Warner.  This week saw the newfound relationship between Amazon's Kindle and Stephen Covey, known most notably as the author of The 7 Habits of Highly Effective People.

Think of it as content and channel.  Product and service.  Yin and yang.  Whatever you want to call it.

Because what you really need to do is recognize it as the future.  Your future.

In the world of embarrassing case studies, with AOL/Time Warner we've seen how it doesn't work.  With Amazon/Covey we will be watching to see how it does.  Most important of all, though, we're getting all the information we need on how to use this thinking to create success in your own organization.

Let's take them one at a time.  First, AOL/Time Warner.

Anyone who hadn't drunk the Kool-Aid (and how sad it is that that product is so regularly used in this context) knew from the first that the AOL/Time Warner merger wasn't going to work.  It was, in fact, the corporate version of a doomed romance.

Two lovers meet.  They see in each other exactly what the other believes is the answer to their happiness.  Time Warner, the corporate equivalent of the elegant, gray-haired older man, has content.  AOL, the corporate equivalent of the young, nubile girl (out of control hormones and all), has channel...sort of - but we'll get back to that later.

Let's continue with our doomed lovers.

They merge.  They will be the answer to all corporate questions now and in the future.  They will take on the world.  Analysts everywhere hail the new millennium of business.  The world has changed.  Nothing will ever be the same again.

New media has won.  AOL and its vision for the way that all information everywhere will be both wanted and conveyed is the new King of the World!  Watch their dust.  No one has a look-in.  They've got it - no matter what "it" might be - nailed.


Ultimately, the older man - with the far more valuable portfolio (i.e., content) turns out to be the winner, after all.  After being pushed around, demeaned and manipulated by the girl - who thinks she really can call the tune - our man can stand up for himself once more.  He realizes that, contrary to popular opinion - and even his own when he was allowing the upstart to think for him - trading in his reputation for a "new model" really doesn't cut it.

So he cuts his losses.

It's not that simple, of course.  Nothing in romance - or M&A, for that matter - ever is.  But it does take us back to AOL and its sort of channel.

One of the problems with the merger was that it was done in the midst of the dotcom boom when, frankly, no one was really thinking.  The deals were the thing.  The future was a glorious rainbow, never to stop, with pots of gold all along the way.

Remember when Dow 36,000 was a best selling book?

You see what I mean.

During that time period, new media was the thing.  The only thing.  It was all about channel.  Content was old hat.  It didn't matter.  You could get it anywhere.  The only thing that anyone was thinking about was how to get access to this new-fangled thing that the internet was and get everything you had to say out there.

(Some of that, you'll note, hasn't really changed.  And, as you know from my previous writings, I have never been a fan of AOL under Steve Case's leadership - which made the deal questionable for me from the start.)

What the succeeding years showed us, however, is that it isn't content or channel that's the king.  Not separately - because they aren't.  They are, as with all things corporate, inextricably bound.  Success comes from how you work with them both simultaneously, while keeping a much bigger picture always in sight.

That's why the new relationship between Amazon and Stephen Covey is of interest.  Amazon, of course, has the Kindle and, market driver that the company is, has changed the way that reading materials are delivered.  They created a new channel that has been adopted successfully even though other e-readers existed before.

Publishers have, for years, been worried about the implications of the new electronic media and with good reason.  They neither understand nor quite know how to adapt to or adopt the new technologies as they do the best deals for themselves and, ostensibly, their authors.

Even something as simple as the price wars for hardback books we've been seeing the last few months between Walmart, Amazon and others - penny by penny - has been indicative of the changes in the marketplace that publishers can't manage the way they'd like.

Now, enter Kindle and Covey.

Stephen Covey has given the full electronic rights for e-books on his two best sellers, 7 Habits and Principle Centered Leadership, to Amazon.  For the Kindle.  Not another electronic version to be found.

Granted it's on a time-limited basis, which makes sense for Covey and his company, FranklinCovey.  But it's not a happy-making moment for his print version publisher, Simon and Schuster.  They've just seen their profits on a years-long, successful backlisted book go elsewhere.  Completely.

Content and channel.

Which is, if you're paying attention, no different from any other aspect of how you do business.  Or should.

In every step that every organization takes - within and without - there are links.  There is what you do and there are the ways that you deliver it.  You can't think only of what a great product you have, but how you are going to get it out to the marketplace in a way that people will find it, like it and buy it.

If you're in the middle of the supply chain or you're the end-to-end solution provider, it doesn't matter.  Nor does it matter whether you're a manufacturing or service organization.  Or even public or private sector.

It doesn't even matter if you are the internal provider of a product or service that some other part of your same organization needs to move the final product forward.

It's all in the links.  The relationships.  The respect for each component part as an entity in itself and, simultaneously, as part of a larger whole.

Because, somewhere out there is the customer.  Internal or external, it doesn't matter.  Someone out there is dependent upon your ability to provide what they need, when they need it, in the form they require at a price point that works for them.

Your ultimate relationship and responsibility is with and to them.  Your goal is to fulfill what they want and need - even before they have identified it for themselves.  And, in so doing, you want to make sure that there's a win for everyone every step along the way.

That's why AOL/Time Warner went wrong.  From the first, the AOL players looked upon what they were doing not as a win for their customers, but as a win for them - the young nubile ones - against old media in the form of Time Warner.  They crowed about it.

They never understood that their success would come from a successful partnership between the two.  And that's where Amazon has it nailed.  Amazon, that most customer-centric of all corporations, has its eye on the customer at all times.  Because they know that, as long as they are keeping their eye on the customer, their customer numbers will continue to grow and those customers will keep coming back.

Even when a new channel comes into play.

And that's why content and channel, together, become such an important part of your strategy.  As you think of your future - whether looking at existing products and services or those yet to come - don't think within.  Think holistically.  Look at the relationship between what you have, who will want it and how you're going to get it there - even if those distribution channels don't yet exist.

They will.  And when they do, you'll be the one everybody wants as their partner in success - because you'll know how to work it as a win.  For everyone.