The explosion of TV and the exquisite timing of AOL's apology

In an interview last week (Reuters) Steve Case, founder of AOL, finally apologised for AOL's merger in 2000 with Time Warner. At the time, the deal, reported by Reuters as being "known as one of the worst corporate mergers in history" destroyed some $200 billion in shareholder value and was the subject of one of the Onion's better send-ups in which Ted Turner sends himself back in time to prevent the move.

So it's odd that Steve Case should be apologising for the merger now, really, because it is right about now that the imaginary synergies between AOL and Time Warner become more realistic.

Video-downloading site YouTube is doing the Skype dance (TechDirt) and looking for an increasingly plausible-looking $1 billion valuation.  Meanwhile, in the UK broadcaster Channel 4 has dropped the ads (BrandRepublic) from its IPTV "simulcast" of reality show Big Brother for fears it has not properly secured the rights to run ads against the content online. Shares in online DVD rental pioneer NetFlix have plunged 20% (CNet) on the back of disappointing earnings (SeekingAlpha). And while Amazon is readying the launch of its own video download service (AdAge), Yahoo! is experimenting (P2P.net) with DRM-free music downloads.

The pattern, of course, is the disintermediation of traditional gatekeepers - broadcasters, radio stations, perhaps in this context iTunes whose own draconion DRM policy puts it alongside ITV in the endangered gatekeeper camp - by a combination of content rights owners and online brands with the power to aggregate a mass consumer audience. The ownership of spectrum licenses and broadcasting stations is increasingly irrelevant. The launch by the NBA of its own basketball channel in the US and of ECBtv by English cricket; the increasing success of YouTube and the consequent decline (Micropersuasion) of TV broadcast audiences; Amazons's imminent video store (TechDirt); all point in one direction.

Power is shifting from intermediaries to the owners of content and the efficient aggregators of mass web audiences. Which brings us back to AOL and Time Warner. Why apologise now, just as they find themselves sitting on the perfect combination of assets? This is the broadband age. Users want video content online. Websites need video content to show them. The AOL Time Warner thing still has time to work.