Hollywood Reporter today notes Steve Jobs’ latest entrepreneurial blow to the already wheezing DVD rental market.

This, combined with Amazon’s recent decisions to mimic the success of iTunes with mp3 and movie downloads looks to really force these companies into stress. Wall St has already reacted, with something of an unsurprising response to the news. It will be interesting to see how Blockbuster and Netflix, will fight this challenge. Personally, I’m looking forward to not having to wait for the post before I get to see the latest movies, but that’s just me….

***UPDATE

So, after reading Jose Fermerso’s comments at Wired, the latest restrictions set by Apple on iTunes movie rentals (24 hours only!!) I can’t see it being such a knock out punch to Netflix and Blockbuster. Competition is going to be interesting to see how consumers react. Ease of iTunes vs the flexibility of Netflix…hmmmm

Traditional companies are feeling threatened. I say, bring on the changes.

Everyone knows that networking–once a face-to-face affair, sometimes captured in a Rolodex–is now worldwide, instant, and impervious to constraints of distance, time or cost.

Those of us in so-called old media have also learned the hard way what this new meaning of networking spells for our businesses. Media companies don’t control the conversation anymore, at least not to the extent that we once did. The big hits of the past were often, if not exactly flukes, then at least the beneficiaries of limited options. Of course a film is going to be a success if it’s the only movie available on a Saturday night. Similarly, when three networks divided up a nation of 200 million, life was a lot easier for television executives. And not so very long ago most of the daily newspapers that survived the age of consolidation could count themselves blessed with monopolies in their home cities.

All that has changed. Options abound. Fans of small niches can now find new content they could never before. Going elsewhere for news and entertainment is easier and cheaper than ever. And people’s expectations of media have undergone a revolution. They are no longer content to be a passive audience; they insist on being participants, on creating their own material and finding others who will want to read, listen and watch.

Consequently the old media are threatened by the erosion of our traditional profit centers. Certainly we can’t count on things like print classified advertising being around forever. Similarly, DVRs undermine the mainstay of broadcast television’s business model: the commercial.

Nonetheless, it would be wrong to conclude from this that the age of content is over. On the contrary, people want content more than ever, and there is a role for companies that can provide good stuff–”good” being the operative word. Quality is more important than ever, because the marketplace is more ruthlessly competitive. Options are not merely one click of the remote away; devices undreamed of a few short decades ago are at least as tempting as a change of the channel.

Old media can survive–and thrive–in this new environment, but they must adapt. We must learn how younger generations of consumers prefer to receive their news and entertainment, and we must meet those expectations.

The good news is that we are learning–and fast. Take the type of media I know best–news. News is in more demand than ever, but the vast network of Internet-savvy news junkies want their news with several fresh twists: constantly updated, relevant to their daily lives, complete with commentary and analysis, and presented in a way that allows them to interact not just with the news but with each other about the news. They won’t wait until six o’clock to watch the news on television or until the next morning to read it in isolation. This plainly provides a challenge for news providers but also an opportunity to be far more engaged with the audience.

Companies that take advantage of this new meaning of network and adapt to the expectations of the networked consumer can look forward to a new golden age of media. Far be it from me to suggest that either I or my company have all the answers. No one does. But the future of media is a future of relentless experimentation and innovation, accelerating change, and–for those who embrace the new ways in which consumers are connecting with each other–enormous potential.

Rupert Murdoch 05.07.07

Last 72 hours. I’m watching the clock.