The state of media 2.0 – challenges and opportunities
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Well, you didn’t think I was going to leave it at my last post, did you? In my previous post, I asked whether there has been trully substainable innovation in web/software-services, if you segment it into functions like: work, media, commerce, and communication, and look at it in terms of business models. However I did not have that much time to go into the why, which is why I dedicate this post to media alone, and hope* to do the same with the other segments at a future date (*: I imagine, I won’t have that much to say about work and communication).
Let me start by saying that I think media is in trouble, big trouble. The reason is quite simply that media is information, and it is very hard to place a value on information. Or is it? I happen to think there are some exceptions to this, which are firmly grounded in the economic principles of supply and demand. When supply is limited, demand goes up as does the value of the product or service. And vice versa. Sadly, today it seems like the media-world is swamped with TV-shows, films, blogs, newspapers, pop-music, you name it. There is an abundance on all these fronts, which means that the value of these types of media will automatically fall to zilch, explaining the trouble media is in today.
Because of this fall in value, and the general nature of media, there is a constant shift towards building platforms—(s)he who controls the flow of the media, makes the money. Offline, this has lead to consolidations of producers and distributors, online the same has happened (e.g. blogging-platforms, podcasting-networks, group-blogs, etc.), not to mention a merging of off-line and online networks (e.g. AOL-Times-Warner, Newscorp-Myspace, most recently MSNBC-Newsvine, etc.). Noteworthy is also that old media-platforms can easily transform into new media-ones, as they enjoy a lot of advertiser-loyalty, which gives them an advantage over younger platforms, also making the latter easy acquisition-targets.
But, while I paint a depressing picture, this is not the case for all types of media. There are in fact several types of media that are extremely valuable, namely “scarce” media, skill-intensive media, and interactive media.
Scarce Media
This in a way an umbrella term, which can mean anything from old media to the ones I discuss below. There’s an enormous back-catalogue of non-digitalised media, which is waiting to be put online, hopefully in a commercial fashion. The challenge is that this media’s value is high, exactly because it is so scarce, which is completely at odds with the ease of replication that digital/web technology provides.
Some examples include music, which my blogday-pick, New Music Strategies, wrote about recently, and I quote:
If [...] you can give old and forgotten recordings new life, there is a market for them. [...] Especially if you polish it up, put it in context, give some detailed information about it and make it part of a narrative that will allow people to connect it to their own understandings of music, and their own relationship with it.
What worries me a little is the fact that the New York Times recently released their archives for free, which is great, but also suggests that business-models based on “old” media, may be ineffective.
Skill-intensive media
Of the three, this is the most valuable, because it is often based on tacit knowledge and hard to replicate. This type of media is also very future-driven. By investing in skills, you not only ensure good content today, but also tomorrow.
Some examples include Pixar, which I wrote about before and which leverages its skill in story-telling with state-of-the-art technology. There’s Harvard Business Review, which has has an excellent business-model, based on both expertise, quality-presentation, and worldwide-distribution—not to mention that it acts as a marketing-vehicle for a very profitable university. Online, the most interesting collection of skill-intensive media can be found on Google-scholar, which—to the frustration of many poor students—is also closed off like Fort Knox. This is due to another advantage that scholar-based media possesses. It is typically created by universities, who are public institutions, and in which the government has a stake to protect it.
Interactive media
Essentially, we are talking about rich media, which reaches audiences on several levels, making it very hard to replicate. Examples include IMAX, i.e. 3d-cinema, which represents a clear added value to the home-theater or even the regular cinema-experience. Then there is the Starbucks-Apple partnership, which fascinates me. There’s tremendous power in third-place environments, and combining this with media-based business-models is gold. Similarly, hardware-software synergies, like iPods and iTunes, are interesting, leveraging software, service, and distribution. This flawless synergy is something which a lot of media-producers and platforms are lagging in. And social networks are another type, where parallel streams of user-generated and commercial content shape communities. Last.fm and Hypem.com, which allow users to play music and link to concerts and media-stores, are a great example.
Final thoughts
Bringing this back to technology, it is an enabler, yes, but only until your competitors manage to replicate it, which will certainly happen. The only way to protect yourself against it is by investing heavily in people—both on the media and the technology-side, being a first-mover in technology, increasing the bandwidth of how you reach and please your audience, and by implementing protective measures—i.e. lobbying / suing the crap out of people, as well as all the usual stuff (make money, build communities, etc.). All of which needs to be a continuous process!
The picture is courtesy of MyWorldNow.
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