A lot of big companies have gotten big headaches dealing with the implications of a wired world. Instead of embracing change and developing new business plans to win profits from online users, many see the net as the enemy or something that must be controlled.

Guest post by Phillip Dampier of StoptheCap.com

When Netizens out-think corporate efforts to protect fat profits and market control, an executive throwing a hissyfit sooner or later goes public.

That’s precisely what happened at one of those elite breakfasts with “important people” this past Thursday. Sony Pictures Entertainment CEO Michael Lynton let loose in a mini-tirade against what the Internet had done to Sony Pictures:

“I’m a guy who doesn’t see anything good having come from the Internet… (The Internet) created this notion that anyone can have whatever they want at any given time. It’s as if the stores on Madison Avenue were open 24 hours a day. They feel entitled. They say, ‘Give it to me now,’ and if you don’t give it to them for free, they’ll steal it.”

At the breakfast, co-hosted by the S.I. Newhouse School of Public Communications at Syracuse University and The New Yorker, Lynton wasn’t alone in whining about the online revolution’s impact. Co-panelist Nora Ephron wanted to share her pain about how the Internet in impacting the newspaper business:

The Internet has had a greater effect on “our beloved print than it’s had on the movie business.” But, she conceded, “We’re in the last days of copyright, if you want to be grim about it…. Stop it. I dare you.”

The Internet’s DMV

When Hollywood or the folks who work for the dead tree format feel threatened, demanding control and order usually comes next, which is really just code language to hand power over to the entities feeling threatened.

Lynton didn’t disappoint, complaining the Obama Administration’s plan to improve broadband without first obsessing about piracy control measures was the equivalent of building highways with no speed signs or licensed drivers.

Of course, Lynton’s world view would have companies like Sony serving as the DMV, mandating the same kinds of onerous, consumer-unfriendly digital rights management schemes, lock-outs on content, or ludicrous high pricing — the very things that fuel piracy in the first place.

Getting Less for More

The newspaper industry’s problems didn’t start with the Internet. The merger and acquisition frenzy of the 1980s and 1990s in the newspaper business created enormous debt, resulting in inevitable “cost-cutting” measures, laying off the very journalists that made newspapers worth reading to begin with.

Today, many newspapers print a dozen or less locally written stories per day, often shallow in scope, with the rest being wire service copy, columns, and lots of ads. Is it any surprise many people drop their subscriptions for a paper that increases in cost and decreases in quality?

When movie studios shovel junk to moviegoers who pay $10 or more per person, bombard them with ‘preview’ commercials, and require “easy credit financing” to afford the popcorn and soft drinks, why be surprised when people rely on Netflix or other rental services to watch for less?

Controlling the Internet isn’t just limited to big media companies or newspapers. Most of those opposing net neutrality have a vested interest in protecting their brand or service from the online free-for-all. Some new media companies manage to make enormous profits that other older companies wish they could still earn.

It’s not always an issue of price or piracy. More often, it’s about developing a product or service that consumers want and charging a fair price for it. Consumer Reports online represents a success story. Many are willing to pay a yearly access fee for their online content because of its quality and trustworthiness.

Success for the Best

Meanwhile, several online news sites trying to monetize their content also want to hang onto profits from their littered-with-ads look, driving readers crazy with video ads, sales pitches taking over your screen, and the usual pop-ups and pop-unders. You still get all of the irritation, but now you also have to pay for the right to be irritated. No wonder web audiences simply move on.

Instead of learning lessons from customers that reject limits on things they’ve already paid for, denial of access for ‘business reasons,’ or trying to reduce the quality of a product while charging the same or more for it, cartel thinking takes over.

Enormous sums are spent trying to impose limits or order on the net to protect themselves, even if it means shutting down the Internet’s own “model,” where a level playing field means success to those with the best ideas, not just to those with the best connections and influence.