HITVIEWS Pro: Content Worth $30,000,000,000. Hardware Patents, Almost Zero. The Financial Vitality of Content as Revealed by Hitviews - Walter Sabo - MediaBizBloggers

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Welcome Walter Sabo our newest MediaBizBlogger

A turntable in your car would have been an exciting music source before 8-tracks and cassettes. Select your favorite records and play them in your car. An in-car record player actually existed in top-of-the-line 1956 and '57 Chryslers. The product was called THE HI WAY HI FI.

Logically you would assume that the reason it failed was that the records skipped when the car hit the road. Amazingly, they didn't.

The reason they didn't skip is the reason the Hi Way Hi Fi was a failure among consumers.

Chrysler engineering secured a long list of patents for their solution. A robust collection of proprietary processes protecting the product. The solution was, custom records. These were patented groove records that could only be played on the patented stylus. The combination of unique stylus and records prevented the songs from skipping.

No, customers could not bring their records from home into the car or their records from the car into the home. Who selected the songs? The songs were selected by the skilled "entertainers" at Chrysler engineering and legal.

Not wanting to offend families, all of the songs were pop standards, primarily from Mitch Miller's department at Columbia. How Much Is That Doggie in The Window?

Rock and Roll was not on the playlist.

Family safe music picked by corporate staff played on a patented technology resulted in an entertainment system that offered customers nothing that they wanted.

Radio is dead in 1926.

RCA was originally a patent aggregator. Yes, they invented some radio innovations but primarily the company was comprised of a group of lawyers whose goal was to aggregate radio patents made by others, secure them, then monetize them by licensing them to other manufacturers. Safe, proprietary patents.

David Sarnoff, a young lawyer in the department, noticed a progressive problem with the value of those aggregated patents. Radio set sales were declining. In the mid 1920s, a time of great economic prosperity, the novelty of radio hardware was diminishing.

In 1925 Sarnoff was quoted, "Programming created by engineers, lawyers and accountants will not sell radios."* They created family safe farm news, operas and educational programs of little interest to a mass population.

Boxing saves the business.

Sarnoff took action to increase the value of RCA's radio hardware patents. First, he noticed that there was a Jack Dempsey fight coming up and he decided to broadcast it. Such a broadcast – content – had never been offered. He made the deal, announced it to the public and radio hardware sales exploded, making those patents an appreciating asset.

Next Sarnoff knew he had to take the content decisions away from lawyers, accountants and engineers. He formed a new company, one that would celebrate exclusive content. The goal of the company would be to produce shows that would sell radios. He invented a creative hot shop.

Sarnoff, almost 100 years ago, realized that "safe" investments in patented hardware were dangerous if the public saw no reason to buy the hardware. The public wanted a show. A great show. He believed in the tangible safety of the large crowd rather than the imagined safety of a registered patent.

The business Sarnoff started to make the shows recently sold for $30,000,000,000. It's called NBC. Its value increased when it merged with another content company, Universal. The value of the radio hardware patents? Most of them have expired. But the show goes on. It must be because no one buys a box to have a box. They buy it to enjoy a show.

It is shocking how often investors believe that a patent for a media delivery product is safe without considering the importance of the show it will deliver. In almost every case they will find that a superior show, not box, returns the greatest value.

HITVIEWS started two years ago to monetize the remarkable ability of online video performers and producers to capture hundreds of millions of viewers. Fans sit with computers in their laps anxious to watch videos that inspire them to react, type, click thru, and even make response videos. Not one viewer, not one, is watching a blank screen. All of our A Round investment came from people who made their fortunes monetizing celebrity through press, radio, film or TV. Those millionaires "got it" instantly.

* Source: THE BOY GENIUS AND THE MOGUL By Daniel Stashower

Walter Sabo is the Founder and Creator of the business concept. He is an experienced leader of new organizations and is currently CEO of Hitviews. Walter can be reached at walter@hitviews.com.

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