Archive for June, 2009

technology creates media businesses

I stumbled to my feet
I rode past destruction in the ditches
With the stitches still mending beneath a heart-shaped tattoo
Renegade priests and treacherous young witches
Were handing out the flowers that I’d given to you.

“Pop Culture” is an interesting phrase that suggests the ever-changing nature of society. It is nurtured by media. It is never still. It is always searching, looking for more… fed by curiosity or by lust? Doesn’t matter. Only change matters.

Remember the writer’s strike about 18 months ago? At the time I concocted a theory that this was not a new phenomenon, it had happened before. I claimed that it was derivative of a technology change, and furthermore, it proved that the technology at the centre of the dispute has reached critical mass – let me illustrate.

  • The 1960 Writer’s Guild Strike was about writer’s right to receive a share of revenue of the studios from the lease or sale of movies to television (commercially available since the late 1930s).
  • In 1988 the Writers Guild went on strike over the home video market (commercially available since the 1970s), which was then small and primarily consisted of distribution via video tape. It did have an international component and residual agreements also applied to DVDs.
  • In the strike of 2007 the Writers Guild of America, East (WGAE) and the Writers Guild of America, West (WGAW) deemed one of the critical issues for the negotiations was residuals for new media (commercially available since the 1990s), or compensation for delivery channels such as Internet downloads, streaming, smart phone programming, straight-to-Internet content, and other “on-demand” online distribution methods, along with video on demand on cable and satellite television.

Timeline of Media Technology Adoption

Look at the clusters of technologies and potential audience mass preceding each strike. Broadcast TV ushered in changes from Movies and Radio. Strike. TV to Cable and Home Video meant even more access to media. Strike. Expanding further into the home’s total time came IP with its many new ways of providing content access. Strike 3. Thus, every time a new technology became mainstream, was accepted by the consumer and gained critical mass and more penetration – the medium attracted money. This then led to a strike, which led to adjustments in the business model to balance the rewards for stakeholders. In the case of the first strike, it came about 30 years after the introduction of TV. The second and third strikes took about 20 years. This suggests a couple of things given the 20-30 years for business to catch up:

  1. New technologies create new business models (just look at the chart above)
  2. It takes a while for the technology to prove itself
  3. It takes time to be broadly understood, accepted and to create an economy (this is getting quicker with IP)
  4. The timeframe suggests a generational change

So Taras’ Theory of Media Viability is: “A medium’s popularity is a function of  the attention of the talent pool whose creativity drives, and seeks reward on that medium.”

The corollary is: “Not all mediums require talent.”

The extension is: “Popularity, if correctly monetized will ensure viability.”

For in the end, without the content to drive a connection between humans, there is nothing to transact… lonely bloggers like me actually get that! However, sometimes user-generated content is all that matters (telegraph, telephone, fax, email, internet etc.) in that case, the connection mechanism is the business.

Tell me it isn’t so… I’m listening.

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June 25, 2009 at 1:00 am 3 comments

$0 media

I want to break free
I want to break free
I want to break free from your lies
You’re so self satisfied I don’t need you
I’ve got to break free
God knows God knows I want to break free

Just over 25 years ago at the first Hackers’ Conference, Stewart Brand the pioneering publisher of the legendary Whole Earth Catalog*, delivered his “Information wants to be free” manifesto. He then continued, “Information also wants to be expensive. Information wants to be free because it has become so cheap to distribute, copy and recombine — too cheap to meter. It wants to be expensive because it can be immeasurably valuable to the recipient. That tension will not go away. It leads to endless, wrenching debate about price, copyright, intellectual property, the moral rightness of casual distribution, because each round of new devices makes the tension worse, not better.”

A quarter century later and devices are approaching $0. Smartphones and netbooks are being subsidized by carriers, Kindles are being promoted as a low cost alternative to paper pulp and bulk, and the tension is starting to concentrate on the distribution and the content. In relative terms, devices and bandwidth are approaching assymptotically approaching $0.

So has content won?

No, it is still being copied. At a much faster clip than photocopiers, audio cassettes and VHS tapes.

How is this tension going to be resolved?

Monetization. I hear it all the time. ‘Monetization’. Thrown freely about without meaning, used as a verb, adjective and noun as, when and how convenient.

But what does that mean? In reality, it means that somehow, somewhere a deal needs to be struck. A deal between between the content owner, the publisher and the technology ecosystem. Somewhere, someone has to pay. We have a ton of experts saying that the system is broken. Yes, the past is broken, but the future is yet to be invented.  It is just that the way everyone gets paid is changing. And the way they get paid may mean that traditional business models cannot sustain their current cost base and/or modus operandi.

This is a time of change. But it ain’t going to be ‘free’ folks. As I have already said. Somewhere, somehow, someone has to pay.

Tell me it isn’t so… I’m listening.

*The Whole Earth Catalog was an American counterculture catalog that granted “Access to Tools” published by Stewart Brand between 1968 and 1972, and occasionally thereafter, until 1998. Apple Inc. founder and entrepreneur Steve Jobs has described the Catalog as the conceptual forerunner of the World Wide Web.

June 18, 2009 at 1:00 am Leave a comment

who, or what is the target?

Wherever you go
Whatever you do
I will be right here waiting for you

Today, a target audience largely depends upon the capabilities, processes and systems employed by the medium doing the targeting. The following summarizes the primary marketing (targeting) approaches.

  1. Demographic – This is traditional targeting of consumers based upon commonly accepted media currencies such as their age, gender, income and ethnicity.
  2. Geo-targetingTargets a consumer in a certain geographic area using location data mined from the ISP or IP address. This is a powerful tool for local businesses to leverage new rich-media ads. This approach enables the display of local product inventories to customers and is especially valuable for promotional and impulse type buys.
  3. BehavioralSometime called ‘profiling’ and it works by tracking the actions large numbers of users as they surf the web and aggregates their behavior for trends. These patterns signal behaviors that become the basis for targeting and often include purchase history. For example: A visit to an on-line car site can be the basis for serving an auto ad after a consumer moves onto a non-auto-related site. Behavioral targeting allows a Web publisher, for example, to charge premium rates for a luxury-car ad even on a lightly visited site about needlepoint, especially if the user’s previous Web activity shows an interest in buying an automobile.
  4. ContextualThis matches the ad to the content actually being consumed regardless of format. For example, an article about buying homes serves up an insurance ad or a documentary film on animals provides a good place to inject a public service ad for animal protection.
  5. AffinityThis is very similar to contextual but tends to match ad to the theme or genre of the published content. For example, a digital camera marketer may choose to advertise on sites or video channels dedicated to consumer electronics.
  6. DaypartThis is used to focuses on people’s work and lifestyle schedules. For example, serving ads for coffee to commuters between 7-10 a.m. This type of targeting also works well for impending product releases and roadblock campaigns, but is generally directed to an audience to increase the candidate consumer base as prospects for more refined future targeting. Alternatively, it may also me used in conjunction with other approaches to refine those consumers being targeted.
  7. Purchase-basedTracks the purchase history of users to establish trends, much like behavioral. People who bought one brand’s shoes might be interested in more of the same or of another brand.
  8. RetargetingAims to locate consumers who dropped off midway through the path to a purchase and serve them a new ad in the hopes they will complete the purchase. Called remarketing in the offline world and sometimes classified as part of behavioral targeting online.

Note that the above approaches, along with their highlighted examples make no mention of medium specific subtleties. Often these have been institutionalized by work practices or by consumer-medium interactions, but they have also been imposed by the constraints of the medium’s infrastructure capabilities. Consequently, the more different mediums consolidated by an organization’s business model, the more difficult it is to price, offer, deliver and measure multi-media advertising offerings to buyers. Even more difficult is to create meaningful cross-medium targeted buys.

Even more difficult is getting close enough to the consumer to be relevant at an affordable transaction cost. Today, the web is clearly most efficient. Why? Because the consumer’s web device does the targeting! IP is marketing magic. IPTV will become the way of the future, eventually surpassing broadcast in terms of cost/reach efficiency.

And for a change in humor, check out his video on the state of the media industry’s (in)ability to cope with this mess…

Tell me it isn’t so… I’m listening.

June 11, 2009 at 1:00 am Leave a comment

advertising in a down economy

The more I see you
The more I want you
Somehow this feeling
Just grows and grows
With every sigh I become
More mad about you
More lost without you
And so it goes

In a recent study by Ad-ology, more than 48% of U.S. adults believe that a retail store, bank or auto dealership that does not advertise during a recession must be struggling. Likewise, a vast majority perceives businesses that continue to advertise as being competitive or committed to doing business.

So the lesson is… once you’ve established a brand, you need to keep investing to ensure that it remains relevant and alive.

A few other snippets reflecting the current state of things…

  • 40% of consumers use coupons more now than a year ago
  • Most consumers are as willing or more willing to pay more for ‘healthy’ or ‘organic’ products than they were a year ago
  • A ‘deeply discounted price’ was the number-one factor that would make consumers more likely to purchase a big-ticket item (+$1,000)
  • TV, newspaper, direct mail, and Internet top local media from which consumers saw/heard an ad within the last 30 days that led them to take action
  • Store Web sites ranked second only to search engines as the way consumers research products and shop online

Is this what you’d expect? Combine this with my observations in a recession winner? and this may be the time to invest in growing your media business.

Tell me it isn’t so… I’m listening.

June 4, 2009 at 1:00 am Leave a comment


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