6 ms·

Why is there a "Tech, Media, Telecom" sector?

40 points by gumby 3y ago

jeffbee 3y ago
Much simpler answer: it's because of NAICS 51. https://www.bls.gov/iag/tgs/iag51.htm https://www.bls.gov/iag/tgs/iag51.htm
- mitthrowaway2 3y ago
  Which the BLS calls the "information sector", and does not mention "tech" anywhere. This seems like the most appropriate label, because there's no reason that people inventing femtosecond lasers, fusion power, hydrogen catalysts, bipedal robots, rare-earth-free magnets, self-driving cars, and any other manner of novel technology belong in the same category as media licensing. But internet service providers and people writing video-compression algorithms probably do.
  - derefr 3y ago
    > there's no reason that people inventing ... novel technology belong in the same category as media licensing Well, sure they are. Patents are information: R&D insights distilled into a useable implementation. Insofar as the final output of your company is a patent for other companies to license, your company is, in an economic sense, an information creation company — regardless of what happens "inside" the company on a day-to-day basis. Boston Dynamics, for one example, isn't a robot company; it's a robotics R&D lab — which is to say, it's an "information about how to build robots" company. Information about how to build robots is what they create, and what they sell (or rather license); other companies (and governments/militaries) then buy that information / license to use that information — and supporting informational materials like trained data models, designs for FPGA programs to execute those models on, and robotic sensor- and motor-complex designs that those models were trained to use — and put it together themselves, or have some other subcontractor put it together, into actual robots.
    - mitthrowaway2 3y ago
      We can include oil and gas exploration in the infotech-entertainment-telecom economy too! After all, all those geological surveys are just information about where the oil and gas is located! And quantitative finance too, etc...
    - amenhotep 3y ago
      Other things that are information: romance novels, interior design layouts, daily of routines of possibly cheating husbands. Are you going to contend that authors and decorators and private detectives are also information workers? I'd respect the commitment to consistency if so, but it seems to stretch the definition past the point of usefulness.
KirillPanov 3y ago
[flagged]
leroy_masochist 3y ago
Someone else in this thread answered that it's because of NAICS standards, which is an interesting hypothesis, but I think the real reason is, "because investment banks organize their coverage groups that way". And the reason that investment banks do this is primarily because the core of the value in these businesses is driven by intellectual property and/or exclusive licenses to deliver content. In other words, assset value across these three verticals is driven by legal rights to exclude other people from creating a similar asset, whether that asset is a piece of code, monopoly-protected land-line phone service (not really a thing anymore but very much so in the 80s/90s when the TMT category came into being), or episodes of a TV show. TLDR: because dealmakers think it makes sense that way.
gumby 3y ago
I long wondered why businesses that don't develop technology are called "tech" businesses. The TL;DR is that it's all in the economics of being an analyst. Consolidation hits them too.
- onionisafruit 3y ago
  I would say that tech companies sell technology. If you develop tech to sell, you are a tech company. If you buy and resell tech, you are still a tech company. But if you develop tech to use internally, you aren't a tech company. Unrelated, when did you post this comment? The display text says "1 hour ago", but the tooltip says "2023-10-10T15:00:00" which was much more than an hour ago in any timezone that makes sense for HN to be using.
  - jsnell 3y ago
    This post was submitted yesterday, didn't make the frontpage, and came in via the second-chance pool (https://news.ycombinator.com/pool https://news.ycombinator.com/pool) that promotes high-quality posts to the frontpage temporarily to give them a second shot at visibility. When that is done, the timestamp of the article and the existing comments are temporarily shown as happening around the time the article got re-surfaced, not the original submission.
  - RcouF1uZ4gsC 3y ago
    Based on your definition, Netflix is not a tech company, it is a media distribution company. Amazon’s AWS makes it a tech company, otherwise it would just be a retailer.
    - HPsquared 3y ago
      Sounds about right.
    - onionisafruit 3y ago
      Even outside my definition, Netflix should be considered a media company first. They spend a lot more money licensing and creating media than they do on developing tech. Of course both media and tech are in the TMT sector, so either way Netflix belongs there.

40 points by gumby 3y ago

Much simpler answer: it's because of NAICS 51. https://www.bls.gov/iag/tgs/iag51.htm https://www.bls.gov/iag/tgs/iag51.htm

mitthrowaway2 3y ago
Which the BLS calls the "information sector", and does not mention "tech" anywhere. This seems like the most appropriate label, because there's no reason that people inventing femtosecond lasers, fusion power, hydrogen catalysts, bipedal robots, rare-earth-free magnets, self-driving cars, and any other manner of novel technology belong in the same category as media licensing. But internet service providers and people writing video-compression algorithms probably do.
- derefr 3y ago
  > there's no reason that people inventing ... novel technology belong in the same category as media licensing Well, sure they are. Patents are information: R&D insights distilled into a useable implementation. Insofar as the final output of your company is a patent for other companies to license, your company is, in an economic sense, an information creation company — regardless of what happens "inside" the company on a day-to-day basis. Boston Dynamics, for one example, isn't a robot company; it's a robotics R&D lab — which is to say, it's an "information about how to build robots" company. Information about how to build robots is what they create, and what they sell (or rather license); other companies (and governments/militaries) then buy that information / license to use that information — and supporting informational materials like trained data models, designs for FPGA programs to execute those models on, and robotic sensor- and motor-complex designs that those models were trained to use — and put it together themselves, or have some other subcontractor put it together, into actual robots.
  - mitthrowaway2 3y ago
    We can include oil and gas exploration in the infotech-entertainment-telecom economy too! After all, all those geological surveys are just information about where the oil and gas is located! And quantitative finance too, etc...
  - amenhotep 3y ago
    Other things that are information: romance novels, interior design layouts, daily of routines of possibly cheating husbands. Are you going to contend that authors and decorators and private detectives are also information workers? I'd respect the commitment to consistency if so, but it seems to stretch the definition past the point of usefulness.

KirillPanov 3y ago

[flagged]

leroy_masochist 3y ago

Someone else in this thread answered that it's because of NAICS standards, which is an interesting hypothesis, but I think the real reason is, "because investment banks organize their coverage groups that way". And the reason that investment banks do this is primarily because the core of the value in these businesses is driven by intellectual property and/or exclusive licenses to deliver content. In other words, assset value across these three verticals is driven by legal rights to exclude other people from creating a similar asset, whether that asset is a piece of code, monopoly-protected land-line phone service (not really a thing anymore but very much so in the 80s/90s when the TMT category came into being), or episodes of a TV show. TLDR: because dealmakers think it makes sense that way.

gumby 3y ago

I long wondered why businesses that don't develop technology are called "tech" businesses. The TL;DR is that it's all in the economics of being an analyst. Consolidation hits them too.

onionisafruit 3y ago
I would say that tech companies sell technology. If you develop tech to sell, you are a tech company. If you buy and resell tech, you are still a tech company. But if you develop tech to use internally, you aren't a tech company. Unrelated, when did you post this comment? The display text says "1 hour ago", but the tooltip says "2023-10-10T15:00:00" which was much more than an hour ago in any timezone that makes sense for HN to be using.
- jsnell 3y ago
  This post was submitted yesterday, didn't make the frontpage, and came in via the second-chance pool (https://news.ycombinator.com/pool https://news.ycombinator.com/pool) that promotes high-quality posts to the frontpage temporarily to give them a second shot at visibility. When that is done, the timestamp of the article and the existing comments are temporarily shown as happening around the time the article got re-surfaced, not the original submission.
- RcouF1uZ4gsC 3y ago
  Based on your definition, Netflix is not a tech company, it is a media distribution company. Amazon’s AWS makes it a tech company, otherwise it would just be a retailer.
  - HPsquared 3y ago
    Sounds about right.
  - onionisafruit 3y ago
    Even outside my definition, Netflix should be considered a media company first. They spend a lot more money licensing and creating media than they do on developing tech. Of course both media and tech are in the TMT sector, so either way Netflix belongs there.