Capsule: Apple took another bite out of the competition last week with its sleek AT&T 3G-powered iPad for newspapers, magazines, e-mails, movies and TV. While Steve Jobs' iPad demo showcased free clips from The New York Times, National Geographic, Time magazine and Google's YouTube, Apple debuted pricing requirements with the major TV networks: hit TV shows sold in the iTunes store were asked to drop their per-episode a la carte retail prices by half to $1 each. In other media news, Eric Schmidt opened a new front in the Chinese American war of search words with his World Economic Forum remarks criticizing Sino-censorship in terms reminiscent of Secretary of State Clinton's January freedom-of-speech speech. If Google and Apple team up, who in the media will be left standing?
The Financial Times
Gizmodo
WSJ.com
The Street.com
It's 2010. And, while it's not yet Spring again, it's grand to be in a New Year somewhat disassociated from the recession of 2008-09. Sure, the markets are dodgy and the government is fighting with itself. The weather outside may be frightful, but the confidence fanning the cool fire in the media den is so delightful. Comcast and NBCU are in each other's arms. Time Warner and Time Warner Cable are reporting steady results. AT&T, Verizon, DirecTV and the rest of the usual suspects are still standing, including feisty Sprint, Qwest and Cablevision Systems.
Cable networks had a comparative banner 2009 versus traditional TV. Cisco, IBM and HP continue to produce and, at times, excel in support of the media. The strongest of the major newspapers and magazines remain in business, thrashing against the schadenfreude headlines of online aggregators.
And, just when Wall Street might have thought it safe to go back into the media waters without fear of a recession-based engulf-and-devour story looking for them, Apple the dis-intermediator has risen (yet again) as the unconquerable Steve Jobs tells the tale.
This week, the iPad debuted in a press-and-friendlies demo in San Francisco. Mr. Jobs with his typical laconic intensity described the iPad media tablet as a device that could put out the stars if it wanted to. Many audacious critics--fueled as critics generally are by too-high expectations--ripped the iPad and stripped Apple's pre-pumped stock price for the features the new device didn't have, which Apple promised hastily to add. Appropriately, we've been left to imagine the iPad--which won't be sold in its introductory version until March and in its incarnate ultimate fighting form until at least July--as it seems right to us.
What could a light resolute highly-defined portable full-color screen with demonstrably beautiful commercial internet navigation do for us? Powered by an effective wireless data plan from AT&T--the new whispernet provider to Amazon's Kindle following Sprint--the iPad should bring us infinite entertainments, utilities and distractions.
Recognizing this, Apple has chosen its moment to become the digital WalMart. Apple wants to set the prices and the procurement infrastructure for media in the 21st century. Like the pioneer cable operators of the 1970's and 80's, Apple has invented a new utility. Following cable's reinvention of television content and distribution for the home, Apple has reinvented content and distribution for you and me. Cable created a new market structure and a new product design for TV networks and, again, for internet connectivity and, again, for efficient wired voice service. Apple is creating a new market structure and a new product design for the same three things--TV, broadband and voice--annexed to both wired and wireless partner systems.
There is a crucial fly in Apple's ointment when looked at from the grand historic perspective of the magically successful and always under-sung cable industry. Cable dis-intermediated broadcast television by allying with Hollywood and regional sports to create a new syndication generation. Before cable, broadcast TV followed theaters and airlines and international outlets by months and years with commercial-filled movies and TV. After cable, new pay and basic networks slid into the syndication schedule and created a new money path, with commercials and without, that traveled back to content and distribution outlets.
Apple will dis-intermediate broadcast, cable, satellite and telco TV by sliding an entirely new syndication structure into the mix with its own discrete pricing and a new customer relationship. This time, customers will relate to a highly regarded tech brand--rather than to a franchised cable media company tasked with creating its own brand while building its pay-for-service business--represented by an international device purchased from a seemingly competitive CES marketplace with a supporting distribution and service architecture of its own.
Of course, there would be no Apple iPad without AT&T or a wireless distribution connection to a cable broadband service. But evolution dictates that all of these distribution providers will be somewhat eclipsed by the beautiful Apple device that magically manages customers through the myriad content selections of the internet and its commerce partners. (Of course, when the bill arrives, everyone will remember the utility brands of the distribution companies.)
What if Apple takes its opportunities one step farther and partners with Google? The two companies have shared board representation and advisors over the last few years, until a recent move to drive an apparent wedge between the management teams. Maybe the virtual break-up of Apple and Google was just that--corporate warriors fighting over the iPhone and Android mobile devices and their software. Or, maybe each management team is really in a competitive mind-set when it comes to its past partner--which, more than likely, will draw them toward one another if only for a deeper and winning market comprehension.
Google CEO Eric Schmidt called out China's internet regulation in Davos last week. Schmidt's resistance, as well as the resistance of the US government, has been to China's disintermediation of our western commercial internet structure. The West defines web interaction as a series of roads to be crossed only by government-sanctioned market forces. Accordingly, US search portals, websites and internet service providers stand between western internet users and their personal, institutional and commercial interactions. Internet users know that their navigation, their engagement and their interaction is monitored privately and publicly; but in a peculiarly western compromise, we accept the presence of business and government in partnership in a way that we wouldn't accept business or government individually.
In contrast, China's regulation is centralized and obvious in its resistance to contrary views. It opposes all those that differ with the state. Since the US is perpetually in opposition to China on trade and monetary policy, military influence and government controls, US internet policy is a perfect place for international war games. The internet represents virtually every brand of infrastructure; and, as the most prolific universal gateway to the Internet, Google stands in the middle of conversations that will determine the future as a set of apportioned losses and gains.
As President Obama might say, understanding all of the possible international permutations of the internet requires a higher pay grade than most of us enjoy. But we can understand the justifiably high brand esteem and related productivity that companies like Google and Apple--the GM of their service generations--enjoy.
It's also safe to say that most media content brands should be careful before ceding pricing control to any new distributor, even when it's wearing fashionable clothes. Unlike cable, satellite and telco TV, both Apple and Google slice the media into marketable fragments more valuable than the media bundle as a whole and keep the lion's share of a la carte advertising, equipment and download profits for their highly efficient, low-cost digital businesses.
On the plus side, like cable, satellite and telco TV, both Apple and Google provide a brilliant product context for other people's ideas. They make content slices more valuable--down to every search phrase, product, service, channel, VOD, network, movie, TV show, music download, article, essay, report or blog--than they would otherwise be.
But these new content values come about only within the context of each distributor's brand. For now, the extraordinary brand constellations of Google and Apple are still too new to create enhanced value for the media they absorb and replace. Too often, once competitive media gets pulled into these constellations, they lose their independent value: witness print and TV advertising's fall and the resulting parasitic destruction of much of the print, broadcast radio and broadcast TV landscape over the last three years.
It's hard to search for a proper historical reference that defines today's media position facing the pure commercial power of Apple and Google. It's probably somewhere in a transportation analogy between the train, the truck, the bus, the car and our own walking stride being complemented and somewhat overtaken by the airplane.
Of course, there's always the more primitive idea of the motor-coach replacing the horse. But nobody wants to be the horse.
Saturday, January 30, 2010
Saturday, January 23, 2010
Eenie Meenie Miney More
Capsule: What's the better model for digital TV distribution--a la carte or the bundle? Does it matter? The question itself may be an illusion. With Google's YouTube opening a new version of Blockbuster for video "rentals" and Apple's Tablet promising to revolutionize traditional media as a profitable sale in a newly portable digital world, what will TV look like five years out? Will cable packages persist ? For fans of a la carte, the 2011 New York Times' metered model--where you get a finite amount of content for little or nothing extra and pay a la carte for what you choose above the norm--could demonstrate a new efficiency for TV distribution. With all these new TV aggregators entering the ring, will traditional network and pay syndication models get knocked out or knocked up?
The New Yorker
The publishing industry blames the hit-driven efficiency of the mega-book store for the loss of its long tail. It's hard to see today's struggling Borders and Barnes & Noble as powerhouse retailers changing the course of literature; but these brands were running the tables for publishing until recently when portable digital e-readers began to turn the tide. The content commissioned and licensed by the Random Houses of old was seriously changed by big bricks-and-mortar from a broad signature list of classics, educational texts and popular works to a narrow list of popular sale-able titles that people were willing to pay for in volume.
What are people willing to pay for now? It's likely too early to tell given our still unfolding transition to digital publishing with its impulse gratification and everyday low prices. Amazon announced a new deal this week that will share 70% of a book's royalties with the publisher and writer, provided the digital book is brought to market for no more than $10. This is a model that only a consumer can love, provided we all have access to the content we want via portable digital download.
Amazon's new distribution model is aimed at driving book prices down and reading volume up, creating new opportunities for the most popular books on the digital shelf. But will it also make the cost of publishing the more obscure difficult works that we all know we should read from time to time as part of a life well-lived--the digital vegetables--more expensive and harder to get? Is Amazon cutting more meat off the publishing long tail or has it chopped off the tail entirely?
Bricks-and-mortar booksellers and digital retailers are all pushing the bundle--as distinct from classic bookstores like the legendary Strand in NYC that used to house hundreds of choices from the best-seller to the scholarly limited edition. In modern retail, bundles of books make up the retail brand, bringing customers in the door and creating loyal relationships for the storefront (as opposed to the author or publisher) while selling a little extra of the special of the day.
Cable, satellite and telco TV models perform like mega booksellers. They sell their brand in the form of TV bundles at price points from $50 a month to three times that amount, even though viewers still watch TV one show at a time. The cable bundling model helped networks reproduce through bundled carriage fees, charging the most for the best and freshest of a multiplexed network group and practically throwing the narrower cable channel off-shoots in for free. It also helped grow advertising revenue for new channels that got in front of audiences purely because of their required place in a network bundle.
Cable, satellite and telco-tv's $50, $100 and $150 TV bundles encourage TV viewing as an all-you-can-watch buffet. Audiences who find a value in having access to hundreds or thousands of program choices rationalize their cable bills with a per-program math that keeps demonstrating value. Cable distributors reinforce the value of all-you-can-watch when rate increase time arrives each year and the number of available viewing options is promoted (and occasionally increased.)
But TV's tail isn't getting any longer when another dozen networks or several hundred VOD viewing choices are added to the bundle. Most likely, new networks are vaguely similar to the content already purchased; and, where a new original channel is added, it comes at its own relatively high a la carte cost. In this way, TV distribution is able to control the cost of TV content and to finance the development of a few original series that improve brand quality--be the brand in question HBO, Showtime or AMC or Comcast, Time Warner, Verizon or DirecTV. Savvy distributors know that quantity additions--like so many books on the shelves--can't be the real ratings-drivers. By design, quantity in TV land means a few star performers amidst a sea of facsimiles creating a sense of brand abundance.
When Apple and Google's YouTube enter the fray, will they adopt a similar bundled stance? On a practical level, Apple and Google's cable-like TV bundles are guaranteed. Apple and Google will have to replicate the best economics of modern TV distribution in order to place those economics on steroids to drive efficiency. Like Amazon, Apple and Google are efficiency models--larger than their bookseller and cable distributor forebears and capable of beating cable at its own game only if they can do more of the same on a significantly larger scale.
What does all of this mean for the future of content and distribution and their accessibility to the consumer? One view is that efficiency--and only efficiency--wins. The newest distribution models that will prevail and ultimately overtake the guys that "brang 'em" will price in the aggregate--in the sense of the bundled value of a distribution brand--just like today's distributors. But they will look different in that they may enter the market with more a la carte content than the competition only to bring that content back into a bundled model once they've established distribution dominance.
Anyone who has teenagers running up iTunes credit card bills in the low-to-mid three figures each month knows that the Apple pricing model is ripe for a bundle. Once those teenagers are emancipated and have to pay their own freight for music as well as food, fuel and shelter, new realities will claim the day. The true choice quotient inside digital media will be only slightly better than the range of content and distribution choices at present. But everything will look bigger and newer, which may make digital media seem better to a new generation; until that new generation looks around for the long tail it lost.
The New Yorker
The publishing industry blames the hit-driven efficiency of the mega-book store for the loss of its long tail. It's hard to see today's struggling Borders and Barnes & Noble as powerhouse retailers changing the course of literature; but these brands were running the tables for publishing until recently when portable digital e-readers began to turn the tide. The content commissioned and licensed by the Random Houses of old was seriously changed by big bricks-and-mortar from a broad signature list of classics, educational texts and popular works to a narrow list of popular sale-able titles that people were willing to pay for in volume.
What are people willing to pay for now? It's likely too early to tell given our still unfolding transition to digital publishing with its impulse gratification and everyday low prices. Amazon announced a new deal this week that will share 70% of a book's royalties with the publisher and writer, provided the digital book is brought to market for no more than $10. This is a model that only a consumer can love, provided we all have access to the content we want via portable digital download.
Amazon's new distribution model is aimed at driving book prices down and reading volume up, creating new opportunities for the most popular books on the digital shelf. But will it also make the cost of publishing the more obscure difficult works that we all know we should read from time to time as part of a life well-lived--the digital vegetables--more expensive and harder to get? Is Amazon cutting more meat off the publishing long tail or has it chopped off the tail entirely?
Bricks-and-mortar booksellers and digital retailers are all pushing the bundle--as distinct from classic bookstores like the legendary Strand in NYC that used to house hundreds of choices from the best-seller to the scholarly limited edition. In modern retail, bundles of books make up the retail brand, bringing customers in the door and creating loyal relationships for the storefront (as opposed to the author or publisher) while selling a little extra of the special of the day.
Cable, satellite and telco TV models perform like mega booksellers. They sell their brand in the form of TV bundles at price points from $50 a month to three times that amount, even though viewers still watch TV one show at a time. The cable bundling model helped networks reproduce through bundled carriage fees, charging the most for the best and freshest of a multiplexed network group and practically throwing the narrower cable channel off-shoots in for free. It also helped grow advertising revenue for new channels that got in front of audiences purely because of their required place in a network bundle.
Cable, satellite and telco-tv's $50, $100 and $150 TV bundles encourage TV viewing as an all-you-can-watch buffet. Audiences who find a value in having access to hundreds or thousands of program choices rationalize their cable bills with a per-program math that keeps demonstrating value. Cable distributors reinforce the value of all-you-can-watch when rate increase time arrives each year and the number of available viewing options is promoted (and occasionally increased.)
But TV's tail isn't getting any longer when another dozen networks or several hundred VOD viewing choices are added to the bundle. Most likely, new networks are vaguely similar to the content already purchased; and, where a new original channel is added, it comes at its own relatively high a la carte cost. In this way, TV distribution is able to control the cost of TV content and to finance the development of a few original series that improve brand quality--be the brand in question HBO, Showtime or AMC or Comcast, Time Warner, Verizon or DirecTV. Savvy distributors know that quantity additions--like so many books on the shelves--can't be the real ratings-drivers. By design, quantity in TV land means a few star performers amidst a sea of facsimiles creating a sense of brand abundance.
When Apple and Google's YouTube enter the fray, will they adopt a similar bundled stance? On a practical level, Apple and Google's cable-like TV bundles are guaranteed. Apple and Google will have to replicate the best economics of modern TV distribution in order to place those economics on steroids to drive efficiency. Like Amazon, Apple and Google are efficiency models--larger than their bookseller and cable distributor forebears and capable of beating cable at its own game only if they can do more of the same on a significantly larger scale.
What does all of this mean for the future of content and distribution and their accessibility to the consumer? One view is that efficiency--and only efficiency--wins. The newest distribution models that will prevail and ultimately overtake the guys that "brang 'em" will price in the aggregate--in the sense of the bundled value of a distribution brand--just like today's distributors. But they will look different in that they may enter the market with more a la carte content than the competition only to bring that content back into a bundled model once they've established distribution dominance.
Anyone who has teenagers running up iTunes credit card bills in the low-to-mid three figures each month knows that the Apple pricing model is ripe for a bundle. Once those teenagers are emancipated and have to pay their own freight for music as well as food, fuel and shelter, new realities will claim the day. The true choice quotient inside digital media will be only slightly better than the range of content and distribution choices at present. But everything will look bigger and newer, which may make digital media seem better to a new generation; until that new generation looks around for the long tail it lost.
Sunday, January 10, 2010
Bang Bang You're Dead
Capsule: Parts of the 2010 media life-cycle promise new sustainability when viewed from the vantage point of the technologies on deck at last week's CES. It's not that the latest consumer hardware is a slam dunk success; it's that the hardware and software components are integrated across industries, promising fertile immediate links to the commercial marketplace. In the same week that CES was attempting its own lingua franca, traditional media wars continued to rage. A broadcast network shot its own TV talk show legend in full public view rather than concede that advertising-reinforced TV time slots are so 2009. At the same time, cablers and cable nets aimed old-fashioned revolvers at one another in the name of program access and controlling content costs. Will a sped-up media maturation process propelled by markets coming slowly back to life result in evolution or a new spate of media homicides?
Financial Times (registration required)
The Wrap
Multichannel News
Gizmodo
What's with the 2010 reruns of generations-old media wars? If the last five years have taught anything to the multi-billion-dollar world of content and distribution, it's that divorce hurts, only slightly less than homicide.
Newspapers and magazines have absorbed the Solomonic wisdom that dividing their brands into two separate businesses--traditional dual-revenue stream print and seemingly modern single-stream internet--is like cutting the baby in half. It doesn't work for either side.
Representing their new lessons to the world, publishing companies are embracing a hybrid content-and-distribution model by collaborating with equipment manufacturers to get the word out in newly efficient forms. Wherever the ten new electronic readers end up when consumers vote, the resulting consolidation should benefit publishers and their reading public.
The new collaborative media business model embraces subscription revenues--with print and e-readers representing the best of mobility as its own brand value--and advertising, serving both print and the place-based online world. The best of the new collaborative brands borrow from all of the content and distribution participants. Making commercial sense of so many brand attributes--accurate information, meaningful advocacy, quality presentation, complete portability and ease of access and use--will be the challenge of the new media decade. Media marketers will succeed when their promotional messages trumpet a winning consumer proposition that includes product design, service design and financial integrity.
Conveying a brand's financial integrity will be tough for most marketers, especially in a market where so many brands suffered significant losses and some were lost entirely during the last three years. But financial integrity is a value that has assumed significance following a major recession that forced a new American frugality as well as a healthy distrust of major corporate brands. Pricing and offers that look too good to be true are more likely to be judged as false by the post-recession consumer. Witness the last two lackluster holiday seasons where sales were lost in a sea of for sale signs.
The fractionalized look of today's media just may suit the consuming public. Seeing big companies who used to make big profits broken into little pieces might feel like payback against the last decade's commercialism and its demonstration of the unbalanced power of American banks versus the people who funded them. The problem is that most brands can't survive cut up into pieces, requiring companies to find new ways to reconstitute themselves into commercial models that work.
One model that might work for multi-channel broadband distributors is to construct a pay content and commerce layer on top of their broadband services. This pay layer could embrace the distributors' content partners akin to the aspirations of TV Everywhere. But the new brand requirements of excellence in product and service design, as well as financial integrity, will require greater versatility than simply duplicating the TV model in the internet space.
Maybe it's time for cablers and cable content brands to look at the near-death experiences of publishing with some healthy humility and a respect for the adaptive abilities of the survivors. If TV online looks and is controlled and priced in exactly the same way as TV through traditional cable service, there'll be nothing new for audiences to buy. Of course, rate increases are a possibility; but jacking up the rates for an appreciably unchanged product seems tried to the point of conviction and no longer commercially true.
If TV Everywhere becomes an exercise in customer retention rather than product expansion and revenue growth, the cable industry will see a further economic softening. As it is, TV's commercial situation is reminiscent of publishing, humbled by divorcing its essential elements into two separate businesses without enough of a commercially sustainable representation on either side of what customers really want.
What customers want is to have their content delivered through an affordable unified place-based system that includes a mobile product and service experience. If the media puts the customer at the top of its new marketing hierarchy, a set of complementary products that fit the bill with better ways to watch TV news, sports and entertainment will result. Of course, these complementary products will force a breakdown of the "not invented here" resistance inside many major media companies.
Better entertainment as well as better business models are already beginning to follow technology across new collaborative corridors. Hastening the transformation is a strong realization that advertising alone can't make the world spin, especially since advertising economics are at war with the economics of internet search, whose supreme efficiency has temporarily forced all ad media prices to the floor.
Google isn't to blame for overtaking advertising with the best available search system. Traditional media failed to keep pace. Multi-channel content and distribution failed to imagine better navigation, keeping the broadcast channel model predominant rather than expanding Tivo-like-models across their TV platforms. It seems clearer in retrospect that for the media like the banks and the insurance companies the last decade was a harvesting decade after all.
So, what follows the harvest? We'll see. Not even the biggest of yesterday's distribution giants have enough of their profits left to support endless content fee increases. At the same time, the traditional media doesn't have enough of its traditional media luster to retain customers while raising subscription prices in a stagnant or even slow-growing economy.
Most importantly, today's consumers with options--exhausted by bickering between political partisans, between new media and old, between content and distribution--don't have the spending mojo to support the familiar. With all of these factors converging, the media brands that survive will have to right a world turned upside down by putting the customer back on top; and, the rest will be consigned to our collective media memory.
Financial Times (registration required)
The Wrap
Multichannel News
Gizmodo
What's with the 2010 reruns of generations-old media wars? If the last five years have taught anything to the multi-billion-dollar world of content and distribution, it's that divorce hurts, only slightly less than homicide.
Newspapers and magazines have absorbed the Solomonic wisdom that dividing their brands into two separate businesses--traditional dual-revenue stream print and seemingly modern single-stream internet--is like cutting the baby in half. It doesn't work for either side.
Representing their new lessons to the world, publishing companies are embracing a hybrid content-and-distribution model by collaborating with equipment manufacturers to get the word out in newly efficient forms. Wherever the ten new electronic readers end up when consumers vote, the resulting consolidation should benefit publishers and their reading public.
The new collaborative media business model embraces subscription revenues--with print and e-readers representing the best of mobility as its own brand value--and advertising, serving both print and the place-based online world. The best of the new collaborative brands borrow from all of the content and distribution participants. Making commercial sense of so many brand attributes--accurate information, meaningful advocacy, quality presentation, complete portability and ease of access and use--will be the challenge of the new media decade. Media marketers will succeed when their promotional messages trumpet a winning consumer proposition that includes product design, service design and financial integrity.
Conveying a brand's financial integrity will be tough for most marketers, especially in a market where so many brands suffered significant losses and some were lost entirely during the last three years. But financial integrity is a value that has assumed significance following a major recession that forced a new American frugality as well as a healthy distrust of major corporate brands. Pricing and offers that look too good to be true are more likely to be judged as false by the post-recession consumer. Witness the last two lackluster holiday seasons where sales were lost in a sea of for sale signs.
The fractionalized look of today's media just may suit the consuming public. Seeing big companies who used to make big profits broken into little pieces might feel like payback against the last decade's commercialism and its demonstration of the unbalanced power of American banks versus the people who funded them. The problem is that most brands can't survive cut up into pieces, requiring companies to find new ways to reconstitute themselves into commercial models that work.
One model that might work for multi-channel broadband distributors is to construct a pay content and commerce layer on top of their broadband services. This pay layer could embrace the distributors' content partners akin to the aspirations of TV Everywhere. But the new brand requirements of excellence in product and service design, as well as financial integrity, will require greater versatility than simply duplicating the TV model in the internet space.
Maybe it's time for cablers and cable content brands to look at the near-death experiences of publishing with some healthy humility and a respect for the adaptive abilities of the survivors. If TV online looks and is controlled and priced in exactly the same way as TV through traditional cable service, there'll be nothing new for audiences to buy. Of course, rate increases are a possibility; but jacking up the rates for an appreciably unchanged product seems tried to the point of conviction and no longer commercially true.
If TV Everywhere becomes an exercise in customer retention rather than product expansion and revenue growth, the cable industry will see a further economic softening. As it is, TV's commercial situation is reminiscent of publishing, humbled by divorcing its essential elements into two separate businesses without enough of a commercially sustainable representation on either side of what customers really want.
What customers want is to have their content delivered through an affordable unified place-based system that includes a mobile product and service experience. If the media puts the customer at the top of its new marketing hierarchy, a set of complementary products that fit the bill with better ways to watch TV news, sports and entertainment will result. Of course, these complementary products will force a breakdown of the "not invented here" resistance inside many major media companies.
Better entertainment as well as better business models are already beginning to follow technology across new collaborative corridors. Hastening the transformation is a strong realization that advertising alone can't make the world spin, especially since advertising economics are at war with the economics of internet search, whose supreme efficiency has temporarily forced all ad media prices to the floor.
Google isn't to blame for overtaking advertising with the best available search system. Traditional media failed to keep pace. Multi-channel content and distribution failed to imagine better navigation, keeping the broadcast channel model predominant rather than expanding Tivo-like-models across their TV platforms. It seems clearer in retrospect that for the media like the banks and the insurance companies the last decade was a harvesting decade after all.
So, what follows the harvest? We'll see. Not even the biggest of yesterday's distribution giants have enough of their profits left to support endless content fee increases. At the same time, the traditional media doesn't have enough of its traditional media luster to retain customers while raising subscription prices in a stagnant or even slow-growing economy.
Most importantly, today's consumers with options--exhausted by bickering between political partisans, between new media and old, between content and distribution--don't have the spending mojo to support the familiar. With all of these factors converging, the media brands that survive will have to right a world turned upside down by putting the customer back on top; and, the rest will be consigned to our collective media memory.
Saturday, January 2, 2010
Keeping It Real
Capsule: What useful media legacies will the 2000-2009 decade claim? With a powerful surge of digital media soaring like a tsunami over traditional media forms, what can the media mash-up that's left teach? Are we finally grown-up enough to admit our new realism? What hard-earned wisdom have we earned as we rebuild the media in the decade ahead?
Forbes.com
For those still standing as we enter 2010, and even for those laid waste by the last decade's digital surge, it's a good moment to force a useful idea structure over the hodge-podge of media events we've just survived. We must have mastered something in the volatility and media shape-shifts of the last ten years--or, at least, it would be pretty to think so.
Here are a few observations on our post-2009 New Realism courtesy of a digital media mix that strongly influences the way we think, live and work.
TV News and TV News Blogs
Among the many TV News networks brought to us by cable, satellite, telco TV and the internet, a few real news choices persist in presenting the world as a fair representation of life. TV News is both an art and a business for PBS, the BBC, Bloomberg News, EuroNews, regional cable news channels like Cablevision's News 12 and (most of the time) CNN--to name a representative group. TV News, like its print and radio counterparts at NPR, PRI, The New York Times, The Wall Street Journal and The Washington Post, is expensive. It takes money to maintain international news bureaus and to report on the world with patience and knowledgeable intensity.
TV News Blogs, like Fox News, MSNBC, much of CNBC and a lot of broadcast news, don't report the news in the traditional sense that aims at objectivity. Fox, MSNBC, CNBC and kindred cable and broadcast spirits offer thought leadership in the best sense and opinion uninstructed by context in the worst.
International coverage differentiates real news from news blogs in this newly realistic world. If a TV news network staffs international news bureaus--as distinct from jetting correspondents around the globe when a high-profile headline emerges--it's likely a source of real news. As we've seen through wars, social and religious conflicts and the recession of the last decade, events around the world affect our daily lives just like our behavior in our own backyard affects the rest of the planet. Real news thinks globally even when it acts locally.
Of course, there's nothing wrong with news blogs, provided we keep them real enough to understand that we're immersing ourselves in opinion instead of getting as close to the facts--the ultimate reality--as we can. News is the opposite of entertainment in terms of the cost of capturing real life: in the news, the more real the network, the more expensive the news-gathering process; in entertainment, reality TV is cheap and abundant.
May Carry, Must Pay
Despite the best of public intentions, the media burst out of the constraints of government regulation more during this last digital decade than at any time in media history. Regulations that require multi-channel distributors to carry local broadcasters seem arcane even as they persist. The idea of providing advantages to one commercial TV source over another--in this case, providing advantages to broadcast networks and their affiliated TV stations over other cable or internet based entertainment and information sources--is inconsistent with network neutrality at its core. Regulators can no longer keep ahead of the development force bringing media diversity to American audiences.
The task for the FCC is to stay broad and to attempt a fair perspective as events continue to change the world. At the same time, relationships between media companies have become increasingly private and commercial. Even public broadcasters are sharing resources with a widening network of commercial TV channels, radio stations, news services and bloggers. When the FCC attempts to regulate one medium, it must take into account its interlocking dependencies with the media whole. This was an easier task when analog media and its capital requirements kept the number of participants small and the field broadly visible.
One of the emerging truths in this new real media world is that TV content can no longer assume a guaranteed right to be carried on every distribution network it desires. Must carry has turned into may carry, must pay. The pay part is simple. If we've learned anything in the last decade, it's that media content costs money and someone has to pass the bill along to the consuming public, either directly or through the government. Advertising alone is insufficient; there's just too much advertising available for it to be a dependable link to consumer revenue for each advertiser/investor.
In the name of keeping it real, even the most non-commercial of commercial media are getting wise to the idea that we've got to link to real customers and ask them for more support in order to pay for growth. A few actors in the commercial sphere who dislike getting engaged in real commerce would like to reimagine themselves as fitting into an expanded public TV or radio model, even if their medium is print. The requirements of the marketplace will determine how big the digital public media model will get; but no matter how you look at it, we've all been forced into the messy and interestingly self-regulating business of transacting with our customers for ongoing support. Most likely, public and private media will start to look remarkably similar for the strenuous customer relationship-tending each will require.
Broadband is the Internet
For most American consumers, the internet is a vast value-laden marketplace brought into their homes and businesses by a cable or telephone company through broadband service. The broadband pipes that cable MSO's and telco providers have built and continue to upgrade and maintain are not paid for through taxes or pledge campaigns. The commercial enterprises that sell customers broadband service pay local, state and federal taxes, passing subscription dollars back to the government in exchange for their right to operate.
Although alternative forms of internet access exist--both dial-up and free wireless networks are an intermittently reliable internet source--most of the country benefits from the networks built into private homes, apartments and businesses by companies like Comcast, Time Warner, Verizon and AT&T. These distribution giants will stand behind their substantial broadband investments. They will work with the FCC to ensure that net neutrality means keeping broadband distribution reasonably open to the majority of service and content applications according to rules that don't injure broadband's
commercial existence. They won't give away their capacity and they will work to ensure that regulation is, except in the most extreme circumstances,
benign.
Learning from the last decade's unwitting destruction of substantial media, intellectual and societal value (think the advertising value crash that brought down newspapers and, to a degree, magazines and broadcast TV,) an interlocking private/public partnership will be forged. In this way, government and business can give each other and the people they serve fair warning of what they may lose if new media ingests old media and serves it back, in the most extreme examples, as lightning-fast digital noise.
TV Content and Advertising Change the Face of the Internet
The advertising formats to which we've become accustomed are due to change. The advertising market crash we're still experiencing is forcing the development of new formats for internet and TV advertising. These new ad forms are most likely to resemble the interactive TV we've all dreamed of, energized by the best of Amazonian commerce and Google-ized search.
Because effective TV advertising is expensive, whether it's brought to audiences via multi-channel TV or multi-channel-TV-delivered-broadband, a new advertising market is being created as an outgrowth of our last digital development decade. The new ad market will include expensive interactive TV advertising riding multiple distribution networks, delivering the promise of aspirational fulfillment powered by the impulse for immediate gratification.
The best and the brightest of our new media decade will devote both creative and commercial muscle to developing the new TV landscape for content and content-rich ads across multiple forms. New HD streaming capabilities--think disruptive peer-to-peer technologies like those of Dyyno.com--will become new home and business shopping services. Product placement and interactive advertising will finally step to the plate to deliver high-end commercial value.
A new ecosystem of interactive TV advertising and rich narrative content built according to the formats that the internet and discrete closed network systems can deliver will create the next sustainable media environment, rich enough to coax the most valuable of the dying media formats of our last decade back to life. Alternatively, we can spend the next ten years trying to figure out what knowledge-based and cultural roles we want content and distribution to play, while we numb out on reality as entertainment and news as opinion in a backwards media world.
Forbes.com
For those still standing as we enter 2010, and even for those laid waste by the last decade's digital surge, it's a good moment to force a useful idea structure over the hodge-podge of media events we've just survived. We must have mastered something in the volatility and media shape-shifts of the last ten years--or, at least, it would be pretty to think so.
Here are a few observations on our post-2009 New Realism courtesy of a digital media mix that strongly influences the way we think, live and work.
TV News and TV News Blogs
Among the many TV News networks brought to us by cable, satellite, telco TV and the internet, a few real news choices persist in presenting the world as a fair representation of life. TV News is both an art and a business for PBS, the BBC, Bloomberg News, EuroNews, regional cable news channels like Cablevision's News 12 and (most of the time) CNN--to name a representative group. TV News, like its print and radio counterparts at NPR, PRI, The New York Times, The Wall Street Journal and The Washington Post, is expensive. It takes money to maintain international news bureaus and to report on the world with patience and knowledgeable intensity.
TV News Blogs, like Fox News, MSNBC, much of CNBC and a lot of broadcast news, don't report the news in the traditional sense that aims at objectivity. Fox, MSNBC, CNBC and kindred cable and broadcast spirits offer thought leadership in the best sense and opinion uninstructed by context in the worst.
International coverage differentiates real news from news blogs in this newly realistic world. If a TV news network staffs international news bureaus--as distinct from jetting correspondents around the globe when a high-profile headline emerges--it's likely a source of real news. As we've seen through wars, social and religious conflicts and the recession of the last decade, events around the world affect our daily lives just like our behavior in our own backyard affects the rest of the planet. Real news thinks globally even when it acts locally.
Of course, there's nothing wrong with news blogs, provided we keep them real enough to understand that we're immersing ourselves in opinion instead of getting as close to the facts--the ultimate reality--as we can. News is the opposite of entertainment in terms of the cost of capturing real life: in the news, the more real the network, the more expensive the news-gathering process; in entertainment, reality TV is cheap and abundant.
May Carry, Must Pay
Despite the best of public intentions, the media burst out of the constraints of government regulation more during this last digital decade than at any time in media history. Regulations that require multi-channel distributors to carry local broadcasters seem arcane even as they persist. The idea of providing advantages to one commercial TV source over another--in this case, providing advantages to broadcast networks and their affiliated TV stations over other cable or internet based entertainment and information sources--is inconsistent with network neutrality at its core. Regulators can no longer keep ahead of the development force bringing media diversity to American audiences.
The task for the FCC is to stay broad and to attempt a fair perspective as events continue to change the world. At the same time, relationships between media companies have become increasingly private and commercial. Even public broadcasters are sharing resources with a widening network of commercial TV channels, radio stations, news services and bloggers. When the FCC attempts to regulate one medium, it must take into account its interlocking dependencies with the media whole. This was an easier task when analog media and its capital requirements kept the number of participants small and the field broadly visible.
One of the emerging truths in this new real media world is that TV content can no longer assume a guaranteed right to be carried on every distribution network it desires. Must carry has turned into may carry, must pay. The pay part is simple. If we've learned anything in the last decade, it's that media content costs money and someone has to pass the bill along to the consuming public, either directly or through the government. Advertising alone is insufficient; there's just too much advertising available for it to be a dependable link to consumer revenue for each advertiser/investor.
In the name of keeping it real, even the most non-commercial of commercial media are getting wise to the idea that we've got to link to real customers and ask them for more support in order to pay for growth. A few actors in the commercial sphere who dislike getting engaged in real commerce would like to reimagine themselves as fitting into an expanded public TV or radio model, even if their medium is print. The requirements of the marketplace will determine how big the digital public media model will get; but no matter how you look at it, we've all been forced into the messy and interestingly self-regulating business of transacting with our customers for ongoing support. Most likely, public and private media will start to look remarkably similar for the strenuous customer relationship-tending each will require.
Broadband is the Internet
For most American consumers, the internet is a vast value-laden marketplace brought into their homes and businesses by a cable or telephone company through broadband service. The broadband pipes that cable MSO's and telco providers have built and continue to upgrade and maintain are not paid for through taxes or pledge campaigns. The commercial enterprises that sell customers broadband service pay local, state and federal taxes, passing subscription dollars back to the government in exchange for their right to operate.
Although alternative forms of internet access exist--both dial-up and free wireless networks are an intermittently reliable internet source--most of the country benefits from the networks built into private homes, apartments and businesses by companies like Comcast, Time Warner, Verizon and AT&T. These distribution giants will stand behind their substantial broadband investments. They will work with the FCC to ensure that net neutrality means keeping broadband distribution reasonably open to the majority of service and content applications according to rules that don't injure broadband's
commercial existence. They won't give away their capacity and they will work to ensure that regulation is, except in the most extreme circumstances,
benign.
Learning from the last decade's unwitting destruction of substantial media, intellectual and societal value (think the advertising value crash that brought down newspapers and, to a degree, magazines and broadcast TV,) an interlocking private/public partnership will be forged. In this way, government and business can give each other and the people they serve fair warning of what they may lose if new media ingests old media and serves it back, in the most extreme examples, as lightning-fast digital noise.
TV Content and Advertising Change the Face of the Internet
The advertising formats to which we've become accustomed are due to change. The advertising market crash we're still experiencing is forcing the development of new formats for internet and TV advertising. These new ad forms are most likely to resemble the interactive TV we've all dreamed of, energized by the best of Amazonian commerce and Google-ized search.
Because effective TV advertising is expensive, whether it's brought to audiences via multi-channel TV or multi-channel-TV-delivered-broadband, a new advertising market is being created as an outgrowth of our last digital development decade. The new ad market will include expensive interactive TV advertising riding multiple distribution networks, delivering the promise of aspirational fulfillment powered by the impulse for immediate gratification.
The best and the brightest of our new media decade will devote both creative and commercial muscle to developing the new TV landscape for content and content-rich ads across multiple forms. New HD streaming capabilities--think disruptive peer-to-peer technologies like those of Dyyno.com--will become new home and business shopping services. Product placement and interactive advertising will finally step to the plate to deliver high-end commercial value.
A new ecosystem of interactive TV advertising and rich narrative content built according to the formats that the internet and discrete closed network systems can deliver will create the next sustainable media environment, rich enough to coax the most valuable of the dying media formats of our last decade back to life. Alternatively, we can spend the next ten years trying to figure out what knowledge-based and cultural roles we want content and distribution to play, while we numb out on reality as entertainment and news as opinion in a backwards media world.
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