The content conundrum would be less of an albatross for all traditional media seeking digital footing if the players reconciled a few basic truths.
These tenets are worth contemplating and integrating into the 2011 budget planning, which is underway. Yet many companies continue to avoid the measured risk-taking and experimentation required for break-out growth and change. Here are four touchstones for planners:
There is no denying the laws of economics. Scarcity creates demand and an irresistible value proposition commands price. In the age of information overload, the trick is keeping content away from the ubiquitous beast (if even possible) or creating such a novel or must-have product that consumers will seek it out and pay for it.
Digital's double-edged sword is that the same unwieldy monster makes it possible to reach the widest audience ever. Learning to manage the interactive social-mobile distribution platforms that are the new lifelines for content and information is key. Connect with your target audience, and you have a better chance of successfully traversing the value proposition. Discovery Communications (NASDAQ:DISCK) has been doing it for years; now we'll see if Oprah can with her new OWN Network.
We're hung up on labels created for and from another age. Newspapers are tangible papers printed with the day's news. Today, the news we still crave in special interest slivers is delivered to digital screens, where it is reshaped by engagement and video. That is the publishing world's new reality. It's still all about words and ideas; it's just 24/7. Even new media creations such as The Huffington Post and The Daily Beast aren't there yet.
Video has also morphed to encompass television programs, films and YouTube. The distinctions are less important to consumers than the individual content. Clearly, GE's NBC Universal, Disney's (NYSE:DIS) ABC, News Corp.'s (NASDAQ:NWS) Fox and CBS haven't bought that argument. Comcast (NASDAQ:CMCSA) will be tested when it seizes control of NBCU.
The march of Google TV (NASDAQ:GOOG), Apple TV (NASDAQ:AAPL) and Cisco's (NASDAQ:CSCO) new Umi Telepresence into homes over the next year will deconstruct the last traditional media silo. Viewing will cease to be a layback, stand-alone activity. It will be wrapped in community exchanges, customizing techniques and e-commerce propositions that represent the digital evolution of that thing we call advertising.
It's not so much the chaos as opportunities created by the evolving interactive marketplace that will yield a more vibrant and sustainable marketing business, encompassing pitch, relationships, research and sales. Capitalizing on these new truisms could be reinvigorating and profitable -- if you don't let the old rules and legacy operations get in the way. This continues to be a major problem for consolidated advertising agencies, still prone to relegate interactive marketing to cutting edge subsidiaries.
There is no substitute for just doing it. The next move is to the "cloud," the infinite storage space in the sky, and continuous streaming will make downloads and physical stockpiling obsolete. Amazon (NASDAQ:AMZN), Google and others are already there.
The great media transformation afoot will be systematic and evolve over the next decade. It will take that much time to phase out the old way of thinking and static structures and adapt to new interactive paradigms. The asset swaps, consolidation and reconfiguration of companies -- from Time Warner (NYSE:TWX) and Microsoft (NASDAQ:MSFT) to Yahoo (NASDAQ:YHOO) and AOL -- will be part of the change. And some of it will be forced change, such as over-the-top streaming content a la Netflix (NASDAQ:NFLX) that has upended production, distribution and consumption economics in just the past 18 months. Tech-empowered consumers with weak spending trends are loath to pay for anything they don't need or want. Put another way: Why pay for something labeled "pay TV" or "TV Everywhere," when you mostly watch video on your mobile smart phone or laptop computer?
Relevance is the prize. Clutter busting continues to be as critical as the search for personal relevance. The bottom line: consumers want to instantly and effortlessly locate what they need or want. They are more willing to pay a premium for the content and data most relevant to their lives. That's what has made apps so popular.
Data and information presented in some meaningful context becomes as important as video. Suddenly, content becomes something more: exchanges and interpretation of video and data, communication, recommendations and a life experience. Facebook and other social networks are just the latest iteration; others will follow. When we're all creators and consumers, the interactive experience becomes as compelling as the substance.
All of this changes the equation for producers and distributors of content. The implications are enormous. It may take the distance of time, but when historians look back, they will not see technology, nor the Internet or e-commerce. They will chronicle the unprecedented change in the human condition. As management guru Peter Drucker profoundly observes:
For the first time, literally, substantial and rapidly growing numbers of people (and media companies) have choices. For the first time, they will have to manage themselves. ...And society is totally unprepared for it.