Code and Content's Cautionary Tale

Feb 08 1999

Silicon Alley is no stranger to corporate attempts to merge the worlds of code and content. Despite the potential, it hasn't always worked out well for the pioneers. Witness the tale of David Rose and AirMedia Live.

Three years ago, Rose thought there might be a better way to bring high-quality news, sports, weather and entertainment from the Internet to PC desktops. His company, AirMedia, developed a software package that enabled users to download streamed content onto a proprietary desktop interface using a pyramid-shaped wireless receiver.

The AirMedia Live system was aimed at media companies, who were looking to find better ways to get their Internet-based content to users. AirMedia would use its software to create a new kind of digital network and reap the benefits accordingly.

Rose's ambitious, failed attempt to build a media platform on the back of a new technology provides a cautionary counterpoint to the grand dreams of the entrepreneurs at Comet Systems, Togglethis and NeoPlanet.

The scion of one of New York's great family real-estate dynasties, Rose was prescient about the relationship between code and content in the digital telecommunications universe. He founded the company 10 years ago with early mobile messaging systems.

Eventually Rose managed to build a thriving business supplying client- and server-side software for computer messaging via pager networks. In 1992, Motorola selected AirMedia to develop Advise, the first consumer alphanumeric paging software. Today AirMedia's Notify Group remains the largest provider of such services to the PCS and pager-messaging networks of clients like GTE , MCI and Sprint PCS, with annual revenue of $4 million to $5 million, paid through a mix of flat fees and per-user fees.

In 1995, Rose decided to make a broad consumer content play. AirMedia applied for a patent on a system for delivering news and information, as well as e-mail notifications and other messages, directly to PC desktops that weren't logged onto the Net. The messages would go through a proprietary hardware device that received messages over pager networks. AirMedia would license the hardware technology to modem makers, get the pyramid-shaped receivers bundled with new PCs and then sell a range of messaging-update services to consumers.

AirMedia cut deals with blue-chip media companies that gave those companies the opportunity to deliver branded news and information updates to the desktops of people plugged into the AirMedia Live service. And the company found several modem manufacturers willing to make and market AirMedia receivers.

Unfortunately, between conception and market rollout, the potential market for AirMedia Live evaporated. The product was developed when online services and ISPs charged their customers by the hour for access. But the model changed, and $19.95 all-you-could-eat pricing became the norm. The AirMedia package hit the junk heap. Rose was forced to close his West Coast office, lay off staffers and rethink the efficacy of building a business focused on both code and content.

Rose has successfully retrenched, finding new niche markets for his technology in the burgeoning field of delivering content wirelessly to devices like personal digital assistants.

"Originally, the thought was that content was king and the Internet was this wonderful way of publishing that content - but it didn't work out that way," says Rose. Nowadays, Net content is all about utility; whether traditional content providers like it or not, both a person selling a baseball-card collection on eBay and a GeoCities publisher erecting a Star Trek fan site are creating meaningful Internet content.

But AirMedia is focusing once again on the plumbing. Although Rose has tried to find niche markets for AirMedia services , Rose again sees the upside in the pipes, not the content.

With wireless devices ranging from cell phones to pagers to PDAs all using multiple incompatible formats, the market for a wireless mix of code and content may be returning. Rose believes the software and system architecture he built for the AirMedia network can be put to use as a sort of wireless messaging Rosetta stone - a central hub for the transmission of data to and from myriad devices.

It's not a direct content play like his original AirMedia Live package, but it's creating a path to be used by content providers - a system that will process a message, intelligently know whether the message is going to an 80-character pager or a 500-character text device or both, and then process and send the message.

"Nobody wants to do that yucky work in the middle, that really shanky area of getting this stuff out of one format and into another," Rose says.