• Print

Old Media, New Media and Where the Rubber Meets the Road

vintage-NYT.jpgAnalog (old) media is all about managing scarcity by controlling distribution, the net effect of which is to enable publishers to price access to their “toll roads” as they see fit.

Digital (new) media, by contrast, is premised on the assumption that the tools for content creation, selling, distributing and marketing enable meta-professionals and prosumers to create a surplus of “good enough” content.

This content, in tandem with un-tethered distribution and pretty good search/retrieval functions, operates in complete disregard for the old media-based pricing models that preceded it.

As such, when the forces of analog media collide with digital media, as they have in music, newspapers, yellow pages, books and magazines (and are beginning to collide in television and movies), a brutally efficient “creative destruction” process occurs.

Simply put, if the digital forces can assemble a “good enough” version of the un-tethered content, then in most cases, the analog media provider is in deep trouble (read: devastating business model disruption).

Understanding Media Disruption

My once-beloved San Francisco Chronicle has been “hollowed out,” reduced to a thin pamphlet, thereby accelerating their subscriber attrition.

Why PAY for content that is less deep, less differentiated than I can get online elsewhere for FREE? It’s a vicious cycle.

My once-favorite local news station, KRON, no longer has sports on the weekends; it runs more syndicated content and requires that its reporters operate their own cameras to minimize cost. It’s definitely struggling. KNBR, which is the sports radio station that I listen to, tells a similar story.

vintage yellow pages ad.jpgDo you even know anyone who actually uses the Yellow Pages anymore? That would have been unfathomable when I was growing up.

Now, Google is the Yellow Pages.

On some level, it really is as simple as saying that Craigslist killed the classified ads business, which in turn, killed the newspaper business.

The music business was once supremely cool. Records were cool. The whole chain between record producers, tour promoters and record stores was pretty cool.

tower-sunset.jpgRemember record stores? Whither Tower Records. Heck, even Blockbuster is standing on some wobbly legs.

Strangely, it’s not that the music suddenly is less good. In fact, I probably listen to as much music as I ever have.

It’s just that the “disruption” cow has left the barn (and is living in my iPod), and there is no turning back.

In this case, there are just too many incentives for the performers to maximize their online availability and shift their monetization to other sources, like touring and merchandising.

As a result, the music producer/promoter has been pushed to the backseat (for now).

(Un)Differentiated Media

trueblood.jpgIt seems that the only safe havens are highly differentiated media creators that can’t readily be replicated elsewhere, such as the type of original programming one sees on HBO (e.g., check out: True Blood); the vertical/demographically targeted cable channels (where old media distribution rules still promulgate); and big budget movies, where production values (and production costs) are out of the reach of meta-professionals.

That is what makes the furor playing out with AP, all the more interesting.

AP is a syndicated content and news distribution service that makes its money offering infill content to (traditionally) analog media sources.

In the online world, however, the digital form of AP’s fee-based media is fodder for enabling digital publishers to link to, reference and excerpt from these same stories, typically without paying a nickel to AP.

Now, AP wants to turn back the hands of time by limiting/restricting access to and usage of that content.

Meanwhile, digital media advocates are citing fair use, and you just know that this can’t end well for AP, as their product is fundamentally undifferentiated.

That is not to suggest that they have no case, at least karmically speaking, but it’s akin to arguing about oxygen. This is the atmosphere that they operate within.

The media industry would have to exercise a collective re-set to turn the tide on this one. Maybe they will, but I am skeptical.

Re-thinking The Audience and Your Product

Extending the conversation further, Fred Wilson’s post, ‘Monetize The Audience, Not The Content’ (read the comments section) presents a conundrum.

On the one hand, I totally agree with the objective of building your business around your audience.

But, I also think that a true solution needs to reconcile how the product or service evolves to achieve differentiation in such a universe; and that is a bigger challenge.

Here, my specific assertion is that while not all content is created equal, a whole heck of a lot of it is fundamentally undifferentiated.

In the case of The New York Times (a high profile pub that Fred regularly writes about), there are a few star writers, but none of which are such must-reads as to drive users to pay for access to them (hence, the failure of NYT’s Times Select).

I love reading Frank Rich; Maureen Dowd is pretty entertaining; and Thomas Friedman is thought-provoking. Plus, there are 6-7 other times throughout the month that I find myself reading a Times article.

But, I’ve seriously never considered paying for access to them, and when the Select thing was in effect, and folks like Friedman were behind lock and key, I mostly forgot about them.

howard_stern.jpgCase in point, whatever happened to Howard Stern after he left broadcast radio? Is the King of All Media even relevant anymore?

Don’t tell me how much he is worth now. Tell me this. What happened to his audience?

It’s a hard truth, but while there are 10+ good “enough” quality news/opinions sources for every news story of the day (and they are easy to find and well-indexed vis-a-via Techmeme and Google News), there is no “good enough” cheap/free alternative to the Ridley Scott directed, Christian Bale starring action movie.

As such, the NYT’s of the world face a real paradox. Their brand is their content, and without continuing to cultivate their content and innovate the way it’s presented, which costs money, they have no durable audience.

Thus, I think a better path is to:

  1. Come up with well-defined linkages between online and offline workflows. For example, print subscribers get access to deeper analysis, better tools for saving, excerpting, sharing and finding related content;
  2. Create new types of media/engagement units that reward loyalty, communit-ize it, perhaps game-ify it;
  3. Re-think segmentation (and pricing) across high-end, low-end, hyper-local, and vertical-specific distinctions, and re-work the product accordingly.

Apple, Record Labels serve up ‘Cocktail’

cocktail.jpgSo it seems fortuitous, that as I am updating this post, word filters into the blogosphere that Apple’s long-rumored Tablet computing device is due in September (the Friday rumors said Q1, 2010), and that Apple is working with the record labels to re-invent the packaged music experience for the digital realm. Smart!

Here’s an excerpt from the article:

Apple wants to make bigger purchases more compelling by creating a new type of interactive album material, including photos, lyric sheets and liner notes that allow users to click through to items that they find most interesting.

Consumers would be able to play songs directly from the interactive book without clicking back into Apple’s iTunes software, executives said.
“It’s not just a bunch of PDFs,” said one executive. “There’s real engagement with the ancillary stuff.”

New York Story

empire-state.jpgEnding where we began, creative destruction has had a field day with the media business (and by virtue of its association, advertising as well).

To get to the other side intact, the NYT’s of the world have to figure out what they are that a focused, less expensive blogger, prosumer or meta-creator can’t emulate.

With brutal efficiency, this truth will separate those that can meaningfully, unquestionably differentiate from those that can’t.

Prognosis: more hurting ahead; then the industry finds its footing, begins a renaissance, and gets back on offense.

Related Posts:

  1. Digital Media Rules: The Open Sourcing of Information
  2. Apple, the ‘Boomer’ Tablet and the Matrix
  3. How Social Media Works: It’s About Breadcrumbs and Conversations
  4. The Programmable Fan Site: A New Media/Ad Unit Model
  5. Flip Video News Network: Crowd-Sourcing meets CNN
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  • bowerbird

    nothing new here, but i guess it’s a pretty good summary…

    -bowerbird

  • http://vishk.wordpress.com Vish K

    >In this case, there are just too many incentives >for the performers to maximize their online >availability and shift their monetization to other >sources, like touring and merchandising.

    It is funny that this would bring ‘performers’ back to the 19th century/early 20th century when that was the way they earned a living and their earnings were more in line with the average folk. There sure is some poetic justice in that.

  • bowerbird

    vish said:
    > It is funny that this would bring ‘performers’
    > back to the 19th century/early 20th century
    > when that was the way they earned a living and
    > their earnings were more in line with the average folk.
    > There sure is some poetic justice in that.

    that _is_ poetic justice.

    the vast concentration of power that accrued to
    those who had monopoly control over the media
    did indeed bring a similar excess of riches to those
    recording artists who were favored with contracts,
    and thus received far greater exposure thereby…

    they only had to compete with other signed artists,
    not with every recording artist in the whole world,
    signed and _unsigned_, which is the case today…

    broadcast networks used to get _all_ the viewers…
    then, when they had to start competing with cable,
    they got _most_ of them. now, cable channels get
    more viewers (combined) than broadcast networks.

    and the same is true for book authors. in the past,
    the published authors competed against each other.
    now, everyone is their own publisher, has has to
    compete with everyone else. it’s a flatter world, or
    — as some would put it — a level playing field…

    -bowerbird

  • http://www.thenetworkgarden.com Mark Sigal

    @ Vish, thanks for the thoughts. On some small level you have to feel for these folks in that their toll bridge suddenly became a not a through street, and when that happened, very little of their in-house DNA was tuned for disruption/reinvention mode.

    That said, it’s not like Netflix appeared overnight and it’s not like they embraced the Apple credo that we’d rather cannibalize ourselves than have the competition doing it for us so poetic justice it is, I guess.

    However, I am hardly celebrating as I liked a lot of what old media had to offer.

    @ bowerbird, you hit the nail on the head as to the goodness of a level playing field, although again when craigslist is the survivor and NYT is the deceased somehow level feels like less.

    I caveat that one, though, with my last assertion/prognosis that what we see now is the intermediate grass that grows after a forest fire…before a new forest grows in its place.

  • bowerbird

    mark said:
    > when craigslist is the survivor and NYT is the deceased
    > somehow level feels like less.

    except that the new york times shouldn’t have financed itself
    on the backs of the people who needed to run classified ads.

    > I liked a lot of what old media had to offer

    so did a lot of people. because they offered mainstream stuff,
    which is, by definition, stuff that lots of people like. fair enough.

    but people who wanted something different, something unique,
    something niche, something unusual, were left out in the cold…

    and the artists who were offering those things got zero exposure.
    (sometimes because they were actively excluded from the market,
    by the content cartel, but mostly just because there was no conduit.)

    what we are now seeing is that artists can go directly to audience,
    and get enough traction that they can make a living doing their art.

    so instead of a few big artists doing mainstream art and getting rich,
    we have lots of smaller artists doing unique art and making a living.

    i might be biased, but i like that situation a whole lot better myself.
    and i think it’s gonna create a more interesting society long-term…

    -bowerbird

  • J Kent Ripperman

    Howard Stern is still relevant it’s obvious you are not a subscriber however during Sterns show his guest or the main topic is always number one or two on google trends that day, that is still very powerful.

  • http://www.thenetworkgarden.com Mark Sigal

    @ J Kent, I am a long time Howard Stern fan, and you are right, I am not a subscriber, but I will say relative to my circle, Stern pretty much never comes up, and his pervasiveness across media is unquestionably dropped.

    @bowerbird, I hear you. Yin and yang.

  • http://yakshaving.net Ash [Bettr@]

    Great article, Mark. an entire response is here.

    1. Come up with well-defined linkages between online and offline workflows. For example, print subscribers get access to deeper analysis, better tools for saving, excerpting, sharing and finding related content;

    I mostly agree with this one. It seems that on the Internet the two activities synonymous with building social currency are: 1 sharing links that might be relevant to a friend or colleague, and 2 contributing concise, snarky commentary (most often in a 140 character snippet).

    However, I’m not sure that having a print subscription would enable me to do this any better. I assume it should still be possible to have an online version with the deeper analysis, and better tools. It seems like this is probably what is floating around in the New York Times lab. Now, being a technophile, I realized that my viewpoint on this is probably skewed. But I do believe that releasing the cool new features they have envisioned in the lab that are better ways to solve the same problems that people seek to solve anyway (I have many friends whose parents send them snippets from a newspaper from one state to another… Really? You couldn’t just e-mail that, Mom!?)

    2. Create new types of media/engagement units that reward loyalty, communit-ize it, perhaps game-ify it;

    This is also pretty interesting idea. Personally, my take on this would be to deliver information in smaller chunks, more visual, and better suited to mobile applications. If I weren’t already starting a company right now, this would be a really interesting design project to undertake.

    The game idea is a distinctly remarkable possibility. More engaged ways to consume content interactively are always welcome in my book.

    3. Re-think segmentation (and pricing) across high-end, low-end, hyper-local, and vertical-specific distinctions, and re-work the product accordingly.

    This is probably the best idea, not just for the New York Times but any content producer. Variable pricing, and some mode of price discrimination for different access levels is easy to do ( and easy to prototype), but has not yet been attempted for some reason.

    I know that my next answer might be kind of unpopular, considering that it’s been tried so many times now unsuccessfully: I still think that the distribution of micro-content, provided that it’s really good (engaging) content will sell. If the user interface were as easy as purchasing via one click (like on Amazon.com), and there was a quick way to verify/authenticate a user, I would not at all mind having an account on NYTimes.com and pay-as-I-read.

  • http://www.longhill.com Marty Himmelstein

    Hi Mark,

    I wrote an article that was published in the Feb 2005 issue of IEEE Computer, entitled
    Local Search: The Internet IS the Yellow Pages (http://www.longhill.com/resources/ieee-local-search.pdf“), which you and your readers might find interesting.

    I described the idea of trusted authorities, to accumulate and provide editorial oversight for a base layer of YP-type content. It his here that newspapers can play a crucial role, as intermediaries who are trusted by the two most important local search constituencies – consumers and local businesses. Yellow Page content has got to be trustworthy if it is to be worth anything, and unmediated user-contributed content isn’t sufficient. The article describes other prior work, particularly Dan Bricklin’s SMBMeta initiative.

    Thanks,
    Marty Himmelstein

  • http://Http://thenetworkgarden.com Mark Sigal

    Hi Ash,

    Great feedback, and sorry for the delay in the comment showing up. Will check out the full post you made but some quickie comments. As to linkage between print and online, one could see info lookup code that allows you to either type the shortcodes in or use your mobile camera to take picture of icon that auto recognizes and auto calls up the content, which in case of an iPhone app could facilitate a lot of value add, automated handling, etc. Thought process on games and ad units is that could create units that reward dedicated readers, align on specific psychographic patterns of interest to advertisers, increase viral spreading, etc. Re vertical focus, think of how nyt could better harness the real time and historical data they have on users and usage as one example.

  • http://Http://thenetworkgarden.com Mark Sigal

    Hi Marty,

    Thanks for the feedback. Will check out your article, as a key area of interest is the question of aggregated vs federated data model approaches, and distinctions between crowdsourced and trusted data sources.

    Cheers,

    Mark

  • Jennifer

    Interesting summary! After all social media is a very powerful tool.
    David Plouffe’s,( President Barack Obama’s point man on social media) innovative strategy not only got Obama elected but also managed to raise the largest amount of campaign funding in election history.
    At the IMD OWP 2010 , David Plouffe will share his insights on the historic Obama campaign

  • Mark Sigal

    @Jennifer, thanks for the note here, and will be especially interested to see if iPad gives old media some new tools to get back on offense. You are dead-on as to the potency of social media when played earnestly, with a clear message and clear differentiation from the alternative.

    Best,

    Mark

  • http://www.tarifemonster.de Tarifvergleich

    Welcome to the 21st Century. Maybe we´ll come to another one.