An important contemporary development is the shift of media market definitions from traditional platform-based definitions to functional definitions. This is occurring because media product platform definitions are losing their specificity and uniqueness due to digitalization and cross-platform distribution developments.
Newspapers are becoming news providers, delivering news and information via print, online, mobile, and other platforms; broadcasters are moving off the radio spectrum, exploiting not only other streaming and video-on-demand opportunities, but also text-based communication on web and mobile platforms.
Although functional definitions clarify what companies actually do, they obscure wide differences in audiences, business relations, and revenue sources on the different platforms and give some the mistaken impression that a functionally defined operation can be successful operating the same way across the different platform environments. The functional definition is also confusing some policy makers and regulators concerned with effects of cross-media activity, consolidation, and concentration who do not carefully sort out the different elements of product and geographic market definitions among the platforms.
From the business standpoint, the fundamental problem of the functional definitions is that it leads many content providers to believe they can simply repurpose existing content across platforms. They are happy to do so because the marginal cost is near zero, but they ignore the facts that it also commoditizes the content, that the content losses uniqueness, and that similar presentation may not be appropriate on other platforms. Consequently, the repurposed content can produce only a small marginal increase in revenue.
To ultimately be successful in functional markets, companies need to offer a good deal of new content and launch new products on the new platforms rather than merely reusing what is already there in the traditional ways. Leading cable channels, for example, early in their development relied on motion pictures and syndicated programs previously shown on network television, but soon realized that they needed original programming to attract better audiences and gain additional revenue. Financial newspapers have begun to get it right on the Internet, offering more content and tools than in their print editions and establishing specialized niche products for different types of industry and business readers.
We are all watching to see who among general content providers manages to get their functional approach to markets right using the Internet, Mobile, e-Readers, and other platforms.
Showing posts with label television. Show all posts
Showing posts with label television. Show all posts
Monday, December 21, 2009
MEDIA, INNOVATION, AND THE STATE
There is a growing chorus for governments to help established media transform themselves in the digital age. From the U.S. to the Netherlands, from the U.K. to France, governments are being asked to help both print and broadcast media innovate their products and services to help make them sustainable.
State support for innovation is not a new concept. Support of cooperate research initiatives involving the state, higher education institutions, and industries has been part of national science and industrial policies for many decades. There has been significant state support for innovation of agriculture/food products, electronics, advanced military equipment, information technology, and biomedical technology and products.
State support tends to work best in developing new technologies and industries and tends to focus support on advanced basic scholarly research through science and research funding organizations, creation and support for research parks and industrial development zones for applied research, and incentives and subsidies for commercial research and development.
Many governments also support efforts to transform established industries. These are typically designed to promote productivity and competitiveness as a means of preserving employment and the tax base. In the past there has been some support for technology transfer from electronics and information technology to existing industries and for retraining, facilities reconstruction, and entering new markets.
Trying to apply those kinds of research and transformation policies in media is challenging, however, because much of media activities tend to be non-industrial and are dependent on relatively rigid organizational structures and processes that are difficult to change. These factors are complicated by the facts that media engage in negligible research and development activities, have limited experience with product change and new product development, and tend to have limited links to higher education institutions.
It is clear that a growing number of managers in media industries understand the need for innovation because of the declining sustainability of current operations and because Internet, mobile, e-reader, and on-demand technologies are providing new opportunities. The real innovation challenges in established media, however, are not perceiving the need for change or being able to get needed technology, but organizational structures, processes, culture, and ways of thinking that limit willingness and ability to innovate. This is compounded because many managers are confused by the opportunities and don’t know what to do or how pursue innovation.
Today, the innovation challenge facing media—especially newspapers--is not mere modernization, but fundamentally reestablishing their media functions and forms. What is needed is a complete rethinking of what content is offered, where, when and how it is provided, what new products and services should be provided and what existing ones dropped, how content will differ and be superior to that of other providers, how to establish new and better relationships with consumers, how the activities are organized and what processes will be employed, what relationships need to be established with partners and intermediaries, and ultimately how the activities are funded.
The state’s ability to influence media innovation of this type is highly constrained. Governments worldwide have proven themselves ineffectual in running business enterprises and they have limited abilities to affect organizational structures, processes, culture, and thinking in existing firms. What governments can do, however, is to fund research that identifies threats, opportunities and best practices, provide education and training to promote innovation and help implement change, offer incentives or subsidies to cover transformation costs and support new initiatives, and help coordinate activities across industries.
These kinds of support will be helpful, but they will not be a panacea because the greatest impetus for and implementation of change and innovation must come from within companies. The support will only be helpful if companies are actually willing to innovate and change to support that innovation. The extent they are willing to do so remains to be seen.
State support for innovation is not a new concept. Support of cooperate research initiatives involving the state, higher education institutions, and industries has been part of national science and industrial policies for many decades. There has been significant state support for innovation of agriculture/food products, electronics, advanced military equipment, information technology, and biomedical technology and products.
State support tends to work best in developing new technologies and industries and tends to focus support on advanced basic scholarly research through science and research funding organizations, creation and support for research parks and industrial development zones for applied research, and incentives and subsidies for commercial research and development.
Many governments also support efforts to transform established industries. These are typically designed to promote productivity and competitiveness as a means of preserving employment and the tax base. In the past there has been some support for technology transfer from electronics and information technology to existing industries and for retraining, facilities reconstruction, and entering new markets.
Trying to apply those kinds of research and transformation policies in media is challenging, however, because much of media activities tend to be non-industrial and are dependent on relatively rigid organizational structures and processes that are difficult to change. These factors are complicated by the facts that media engage in negligible research and development activities, have limited experience with product change and new product development, and tend to have limited links to higher education institutions.
It is clear that a growing number of managers in media industries understand the need for innovation because of the declining sustainability of current operations and because Internet, mobile, e-reader, and on-demand technologies are providing new opportunities. The real innovation challenges in established media, however, are not perceiving the need for change or being able to get needed technology, but organizational structures, processes, culture, and ways of thinking that limit willingness and ability to innovate. This is compounded because many managers are confused by the opportunities and don’t know what to do or how pursue innovation.
Today, the innovation challenge facing media—especially newspapers--is not mere modernization, but fundamentally reestablishing their media functions and forms. What is needed is a complete rethinking of what content is offered, where, when and how it is provided, what new products and services should be provided and what existing ones dropped, how content will differ and be superior to that of other providers, how to establish new and better relationships with consumers, how the activities are organized and what processes will be employed, what relationships need to be established with partners and intermediaries, and ultimately how the activities are funded.
The state’s ability to influence media innovation of this type is highly constrained. Governments worldwide have proven themselves ineffectual in running business enterprises and they have limited abilities to affect organizational structures, processes, culture, and thinking in existing firms. What governments can do, however, is to fund research that identifies threats, opportunities and best practices, provide education and training to promote innovation and help implement change, offer incentives or subsidies to cover transformation costs and support new initiatives, and help coordinate activities across industries.
These kinds of support will be helpful, but they will not be a panacea because the greatest impetus for and implementation of change and innovation must come from within companies. The support will only be helpful if companies are actually willing to innovate and change to support that innovation. The extent they are willing to do so remains to be seen.
Friday, August 14, 2009
JOURNALISM STARTUPS ARE HELPFUL, BUT NO PANACEA FOR NEWS PROBLEMS
One of the most exciting developments in journalism is the widespread appearance of online news startups. These are taking a variety of not-for-profit and commercial forms and are typically designed to provide reporting of under-covered communities and neighborhoods or to cover topics or employ journalistic techniques that have been reduced in traditional media because of their expense.
These initiatives should be lauded and supported. However, we have to be careful that the optimism and idealism surrounding these efforts not be imbued with naïveté and unbridled expectation. All these initiatives face significant challenges that require pragmatism in their organization and sober reflection about their potential to solve the fundamental problems in the news industry today.
We need to recognize that these online initiatives are not without precedent. We can learn a great deal about their potential from other community- and public affairs-oriented media endeavors. Community radio, local public service radio and television, public access television, and not-for-profit news and public affairs magazines have existed for decades and provide some evidence about the potential of the startups. Most rely heavily on the same types of foundation, community support, and membership financial models that startups are employing and this gives them a head start in the competition of those resources.
Despite sharing fundamental objectives and goals, these existing news and public affairs enterprises exhibit wide differences in the services they provide and their effectiveness in offering them. Many suffer from precarious financial conditions.
For the most part, such initiatives are highly dependent upon volunteer labor, individuals with the best of intentions who contribute time and effort. Those who manage the operations must expend a great deal of effort to train, coordinate, motivate and support these volunteers. This incurs cost and takes time from other activities.
Most of the organizations operate with highly limited staffs of regularly employed personnel and this is especially true in news operations. Professional journalists working in these organizations tend to be poorly paid; few have health and retirement benefits; most do not have libel insurance that protects aggressive and investigative reporting; few have access to resources to invest time and money in significant journalistic research. The consequence of these challenges is that there tends to be high turnover because the operations typically rely on young journalists who use the organizations to gain professional experience and then move on to better funded or commercial firms.
The community and public affairs operations also exhibit widely disparate size and quality in their journalistic activities. Even most affiliates of National Public Radio—which is generally considered the most successful of non-commercial news operations—tend to have small and relatively undistinguished news operations. Most rely upon the exceptional content of the national organization, large metropolitan affiliates, and the best of the content collectively produced by other local affiliates. Affiliates with larger news staffs and quality tend to be limited to those linked to university journalism programs or in the best-funded metropolitan operations.
The challenges faced in these organizations should not deter the establishment of new online initiatives or keep the rest of us from supporting them. We need to be realistic about their potential, however. In the foreseeable future these startups will tend to supplement rather than to replace traditional news organizations. They may be part of the solution to the problem of news provision, but they alone are not the remedy.
These initiatives should be lauded and supported. However, we have to be careful that the optimism and idealism surrounding these efforts not be imbued with naïveté and unbridled expectation. All these initiatives face significant challenges that require pragmatism in their organization and sober reflection about their potential to solve the fundamental problems in the news industry today.
We need to recognize that these online initiatives are not without precedent. We can learn a great deal about their potential from other community- and public affairs-oriented media endeavors. Community radio, local public service radio and television, public access television, and not-for-profit news and public affairs magazines have existed for decades and provide some evidence about the potential of the startups. Most rely heavily on the same types of foundation, community support, and membership financial models that startups are employing and this gives them a head start in the competition of those resources.
Despite sharing fundamental objectives and goals, these existing news and public affairs enterprises exhibit wide differences in the services they provide and their effectiveness in offering them. Many suffer from precarious financial conditions.
For the most part, such initiatives are highly dependent upon volunteer labor, individuals with the best of intentions who contribute time and effort. Those who manage the operations must expend a great deal of effort to train, coordinate, motivate and support these volunteers. This incurs cost and takes time from other activities.
Most of the organizations operate with highly limited staffs of regularly employed personnel and this is especially true in news operations. Professional journalists working in these organizations tend to be poorly paid; few have health and retirement benefits; most do not have libel insurance that protects aggressive and investigative reporting; few have access to resources to invest time and money in significant journalistic research. The consequence of these challenges is that there tends to be high turnover because the operations typically rely on young journalists who use the organizations to gain professional experience and then move on to better funded or commercial firms.
The community and public affairs operations also exhibit widely disparate size and quality in their journalistic activities. Even most affiliates of National Public Radio—which is generally considered the most successful of non-commercial news operations—tend to have small and relatively undistinguished news operations. Most rely upon the exceptional content of the national organization, large metropolitan affiliates, and the best of the content collectively produced by other local affiliates. Affiliates with larger news staffs and quality tend to be limited to those linked to university journalism programs or in the best-funded metropolitan operations.
The challenges faced in these organizations should not deter the establishment of new online initiatives or keep the rest of us from supporting them. We need to be realistic about their potential, however. In the foreseeable future these startups will tend to supplement rather than to replace traditional news organizations. They may be part of the solution to the problem of news provision, but they alone are not the remedy.
Thursday, July 17, 2008
THE FAILING STRATEGIES FOR DRAMA ON NETWORK TELEVISION
The announcement of the finalists for the 2008 Emmy drama nominations shows how weak major television networks have become and the feeble program strategies they are now employing. AMC’s “Mad Men” and FX’s “Damages” became the first series ever produced by basic tier cable channels to become finalists for best series and they were joined in the 6 nominee list by Showtime for “Dexter”.
The results were even worse for networks in the major acting categories: Only 1 of the five Emmy nominees for lead actor and 2 of the five for lead actress went to network programs.
Overall, 24 cable network programs received nominations and 7 cable channels received 10 or more nominations. HBO received 85 nominations—beating out all the broadcast networks, Showtime received 20 nominations, and AMC received 20 nominations.
Drama is a bellwether of the health of television programming and networks continue to fair poorly. It is a particularly important genre, socially and culturally, because it allows explorations of beliefs, attitudes, norms, aspirations, and fears better than other program types. However, success is unpredictable and good drama is expensive to produce. Historically it was the province of the well funded dominant networks, but that has now changed.
The decline of quality in network television programming is directly related to the increasing number of channels available in households. As the number of channels increases, the average number of viewers declines, producing declining advertising support, and thus reducing resources available for program investments. The responses of networks have been predictable. They offer more game shows and reality programs that are less expensive to produce, avoid productions that are edgy and innovative, and rerun programs as much as possible.
Network prime time filled with shows such as “I survived a Japanese Game Show”, “Wife Swap”, “Nashville Star,” and The Bachelorette” and the networks wonder why they have trouble capturing audiences and gaining financial resources. When they do provide drama it is all too often formulaic and a spin off from an already successful series. There are strong tendencies for network drama to have a criminal or legal practice oriented or take a prime time soap opera approach, such as “CSI”, “Law & Order”, “Desperate Housewives”, and “Grey’s Anatomy”.
The program challenge has been growing worse year after year since the development of cable television channels in the 1970s. I don’t want to be interpreted as saying the networks have produced no fine drama, but the amount has declined precipitously.
This raises the question of why cable channels are able to follow an opposite path, increasing their production of drama and gaining more acclaim for their work. The simple answer is money. Having additional sources of income other than advertising frees programs from the necessity of seeking audiences linked to interests of advertisers and from the content influence of advertisers. It allows producers, writers, and directors to employ greater creativity, to address controversial subjects, and to take the time to ensure quality in the production.
Subscriber-supported HBO has the longest and most distinguished record in producing original drama with highly rated and acclaimed series such as “The Sopranos”, “Angels in America”, “Six Feet Under”, “Deadwood”, “Band of Brothers”, and “Sex and the City”. HBO is premium channel financed by subscriptions from about one third of American households, a clear example that many viewers want and are willing to pay for innovative, quality programming.
In recent years there has also been significant growth of drama from cable channels receiving both subscriber and advertising revenue, thus giving us programming such as USA network’s “Monk” and TNT’s “The Closer”. Original television drama is now being produced by other channels, such as AMC, Lifetime, and Showtime, as well.
One of the side effects of the increased production of drama by cable channels is that they are now playing significant export roles and their programming is regularly appearing in prime time on national channels, especially public service channels, in Europe and elsewhere.
Network executives need to seriously reconsider their programming strategies, particularly where drama is concerned, or they risk become secondary channels in the years to come. Unless they find ways to develop and support quality drama, it will increasingly become the trophy programming of cable channels in the years to come.
The results were even worse for networks in the major acting categories: Only 1 of the five Emmy nominees for lead actor and 2 of the five for lead actress went to network programs.
Overall, 24 cable network programs received nominations and 7 cable channels received 10 or more nominations. HBO received 85 nominations—beating out all the broadcast networks, Showtime received 20 nominations, and AMC received 20 nominations.
Drama is a bellwether of the health of television programming and networks continue to fair poorly. It is a particularly important genre, socially and culturally, because it allows explorations of beliefs, attitudes, norms, aspirations, and fears better than other program types. However, success is unpredictable and good drama is expensive to produce. Historically it was the province of the well funded dominant networks, but that has now changed.
The decline of quality in network television programming is directly related to the increasing number of channels available in households. As the number of channels increases, the average number of viewers declines, producing declining advertising support, and thus reducing resources available for program investments. The responses of networks have been predictable. They offer more game shows and reality programs that are less expensive to produce, avoid productions that are edgy and innovative, and rerun programs as much as possible.
Network prime time filled with shows such as “I survived a Japanese Game Show”, “Wife Swap”, “Nashville Star,” and The Bachelorette” and the networks wonder why they have trouble capturing audiences and gaining financial resources. When they do provide drama it is all too often formulaic and a spin off from an already successful series. There are strong tendencies for network drama to have a criminal or legal practice oriented or take a prime time soap opera approach, such as “CSI”, “Law & Order”, “Desperate Housewives”, and “Grey’s Anatomy”.
The program challenge has been growing worse year after year since the development of cable television channels in the 1970s. I don’t want to be interpreted as saying the networks have produced no fine drama, but the amount has declined precipitously.
This raises the question of why cable channels are able to follow an opposite path, increasing their production of drama and gaining more acclaim for their work. The simple answer is money. Having additional sources of income other than advertising frees programs from the necessity of seeking audiences linked to interests of advertisers and from the content influence of advertisers. It allows producers, writers, and directors to employ greater creativity, to address controversial subjects, and to take the time to ensure quality in the production.
Subscriber-supported HBO has the longest and most distinguished record in producing original drama with highly rated and acclaimed series such as “The Sopranos”, “Angels in America”, “Six Feet Under”, “Deadwood”, “Band of Brothers”, and “Sex and the City”. HBO is premium channel financed by subscriptions from about one third of American households, a clear example that many viewers want and are willing to pay for innovative, quality programming.
In recent years there has also been significant growth of drama from cable channels receiving both subscriber and advertising revenue, thus giving us programming such as USA network’s “Monk” and TNT’s “The Closer”. Original television drama is now being produced by other channels, such as AMC, Lifetime, and Showtime, as well.
One of the side effects of the increased production of drama by cable channels is that they are now playing significant export roles and their programming is regularly appearing in prime time on national channels, especially public service channels, in Europe and elsewhere.
Network executives need to seriously reconsider their programming strategies, particularly where drama is concerned, or they risk become secondary channels in the years to come. Unless they find ways to develop and support quality drama, it will increasingly become the trophy programming of cable channels in the years to come.
Tuesday, June 24, 2008
CHANGING FORMS AND FUNCTIONS OF NEWS MEDIA
Fundamental social and technological changes are altering the functions of news media for audiences and advertisers and significantly altering the situations of specific forms of news media.
Most of us recognize that form and function are linked together, with the form of objects influenced by their use, economics, and technology (Something architects and designers have recognized for more than a century). Contemporary technology has broken the connection between the traditional forms and functions of news providers and made it possible to serve the functions of legacy news organizations and news distribution in many different forms. This development is undermining the consumer and financial bases of long-established news media.
Because they have been in place for so many decades, it is easy to forget that established news media developed their forms within specific economic and technological environments. The form of newspapers and radio and television newscasts developed when new technologies allowed creations of mass audiences, distributed news to them at specific times, and supported the delivery of low priced and free news because advertisers of general consumer products paid to reach those audiences.
Today, the underlying elements of that business model, which was highly successful in the twentieth century, are decaying. Mass audiences are disappearing, technology is providing new ways to reach audiences, individuals are becoming active, integral participants in the communication process, and advertising are seeking more effective ways to reach potential customers.
These changes are significantly altering the functions previously played by metropolitan daily newspapers and network and local radio and television newscasts as primary creators and distributors of news and information. The dominance they once had has been replaced by ubiquitous distribution technologies that provide a continually updated stream of news through cable channels, Internet portals and news sites, social networking sites, mobile devices, and news screens on buildings and in public transportation.
It should be no surprise, then, that the form of legacy news provision is no longer as successful as it was in the past. Those who own and work for legacy organizations see the changes as cataclysmic, but the shifting of functions to more forms is natural and provides significant benefits to those who want news and information.
We have seen this type of displacement before, even within our lifetime. Life magazine, for example, played significant roles in conveying news and features on social life from the 1930s to the 1970s, but lost its functions with the arrival of new technology and changes in social life. As the foremost visual presenter of photojournalism, the magazine once garnered 13.5 million circulation, but changing media preferences for audiovisual materials on television news and magazine shows stripped Life of its audience and advertising.
Many functions of network television news, which grew rich in the 1960s and 1970s, were displaced in the 1970s and 1980s by local television newscasts that provided more hours of news and more opportunities for viewers to get international, national, and local news. That displacement was compounded by the development of 24-hour cable news channels.
Today, further displacement of the functions of network and local television news is taking place and the functions of metropolitan daily newspapers are being significantly affected. This does not the end of news provision, however. Although many journalists in the legacy media desperately assert that only the forms of news in the organizations that employ them can serve social needs and provide quality journalism, the reality is far different.
Reputable and well-trained journalists are now establishing new journalistic forms on the Internet, linking web and print operations, and syndicated materials produced by web-based news providers. There are more journalistic startups now than anyone can ever recall.
Although web-based news has historically be aggregated materials from traditional sources, these new enterprises—some commercial and some non-commercial—are increasingly providing original journalism. Some are concentration on serious investigative national and international reporting; some are providing hyper-local coverage; and some are providing coverage of specialized topics. These serve some functions previously provided by legacy media and some functions legacy media ignored.
The technologies are also allowing engaged citizens to create and distribute news and information on their own, supplementing material produced by professional journalists or providing material in its absence.
These are healthy developments for journalism and for those who want news and information. Although the form of provision is changing, the functions of gathering and conveying news and information and the functions of keeping people informed and engaged are continuing and being improved.
Most of us recognize that form and function are linked together, with the form of objects influenced by their use, economics, and technology (Something architects and designers have recognized for more than a century). Contemporary technology has broken the connection between the traditional forms and functions of news providers and made it possible to serve the functions of legacy news organizations and news distribution in many different forms. This development is undermining the consumer and financial bases of long-established news media.
Because they have been in place for so many decades, it is easy to forget that established news media developed their forms within specific economic and technological environments. The form of newspapers and radio and television newscasts developed when new technologies allowed creations of mass audiences, distributed news to them at specific times, and supported the delivery of low priced and free news because advertisers of general consumer products paid to reach those audiences.
Today, the underlying elements of that business model, which was highly successful in the twentieth century, are decaying. Mass audiences are disappearing, technology is providing new ways to reach audiences, individuals are becoming active, integral participants in the communication process, and advertising are seeking more effective ways to reach potential customers.
These changes are significantly altering the functions previously played by metropolitan daily newspapers and network and local radio and television newscasts as primary creators and distributors of news and information. The dominance they once had has been replaced by ubiquitous distribution technologies that provide a continually updated stream of news through cable channels, Internet portals and news sites, social networking sites, mobile devices, and news screens on buildings and in public transportation.
It should be no surprise, then, that the form of legacy news provision is no longer as successful as it was in the past. Those who own and work for legacy organizations see the changes as cataclysmic, but the shifting of functions to more forms is natural and provides significant benefits to those who want news and information.
We have seen this type of displacement before, even within our lifetime. Life magazine, for example, played significant roles in conveying news and features on social life from the 1930s to the 1970s, but lost its functions with the arrival of new technology and changes in social life. As the foremost visual presenter of photojournalism, the magazine once garnered 13.5 million circulation, but changing media preferences for audiovisual materials on television news and magazine shows stripped Life of its audience and advertising.
Many functions of network television news, which grew rich in the 1960s and 1970s, were displaced in the 1970s and 1980s by local television newscasts that provided more hours of news and more opportunities for viewers to get international, national, and local news. That displacement was compounded by the development of 24-hour cable news channels.
Today, further displacement of the functions of network and local television news is taking place and the functions of metropolitan daily newspapers are being significantly affected. This does not the end of news provision, however. Although many journalists in the legacy media desperately assert that only the forms of news in the organizations that employ them can serve social needs and provide quality journalism, the reality is far different.
Reputable and well-trained journalists are now establishing new journalistic forms on the Internet, linking web and print operations, and syndicated materials produced by web-based news providers. There are more journalistic startups now than anyone can ever recall.
Although web-based news has historically be aggregated materials from traditional sources, these new enterprises—some commercial and some non-commercial—are increasingly providing original journalism. Some are concentration on serious investigative national and international reporting; some are providing hyper-local coverage; and some are providing coverage of specialized topics. These serve some functions previously provided by legacy media and some functions legacy media ignored.
The technologies are also allowing engaged citizens to create and distribute news and information on their own, supplementing material produced by professional journalists or providing material in its absence.
These are healthy developments for journalism and for those who want news and information. Although the form of provision is changing, the functions of gathering and conveying news and information and the functions of keeping people informed and engaged are continuing and being improved.
Tuesday, March 18, 2008
THE INTERNET, MOBILE MEDIA, AND YOUTH ARE NOT TO BLAME
Traditional media industries and companies are overwhelmed with an atmosphere of consternation and fear today.
Trade publications and industry association meetings are filled with news of diminished budgets, reorganizations, consolidations, and layoffs. People say traditonal media are declining and will soon disappear. Potential employees are wondering if there is a future for them in the industries and senior employees are hoping their jobs will last until they reach retirement. Everyone is pointing the finger,but most of the blame for killing traditional media is laid on the Internet, mobile media, and young people.
There is just one problem with their scenario. IT’S NOT TRUE. We have deluded ourselves into thinking that well established media are dying and that young people are uninterested in traditional text and audiovisual media.
Although new distributors of information and entertainment abound and video on demand and consumer-created content are increasing daily, consumers’ greatest time allocation and advertisers’ greatest expenditures remain with traditional media. Although young people have adopted newer media technologies more rapidly than other population groups, most of their media use still involves film, television, magazines, and non-traditional newspapers.
If the death knell for traditional media is not ringing, why do industry personnel keep hearing bells in their ears?
The reason is that significant changes are underway and most people don’t understand them. We have reached a era when the collective weight of expanded offerings of traditional media and the appearance of new types of media are ending the relatively undemanding operating conditions that existed due to lack of media choice and are removing the effortless profits that traditional commercial media enjoyed for a half century.
Suddenly there is competition. Suddenly there are financial losses. Suddenly there are company failures. Suddenly audiences are no longer satisfied with the “take content on our terms when we want to deliver it” approach that traditional media have offered. Only it wasn’t really sudden. Those factors have been growing incrementally for at least three decades. The problems were certainly compounded by the arrival of Internet and mobile content distribution, but they were not caused by them.
Let’s look at the case of the newspaper industry in the U.S. Readership problems have been evident for half a century. Although actual circulation rose continually throughout the twentieth century, reaching a height of 62.6 million in 1993, penetration has declined steadily at 1 to 2 percent each year since 1950. The pace has been steady despite the appearance of additional types of media. The expansion of network television didn’t increase the loss, the arrival of cable channels didn’t amplify the decline, and the arrival of the Internet didn’t boost the pace.
Today, the Internet is having an affect on advertising, but even that is not disastrous despite the wailing and gnashing of teeth. Total U.S. newspaper advertising was $46.6 billion in 1999 and $49.3 billion in 2006. In financial terms newspaper advertising is rising, but when accounting for inflation it has basically plateaued so one can not say the Internet is killing papers. If we look at classified where the biggest substitution exists, classified advertising in newspapers reached a height of $19.6 billion in 1999 and it was $16.9 billion in 2006. Clearly a decline occurred but it was offset by the fact that newspaper online advertising produced $2.6 billion in 2006. Overall, the business has stopped growing and investors are unhappy, but the industry isn't dying.
Certainly, the Internet is having many effects on established media. Research shows that print media business models have been least disrupted, unlike audiovisual media, but that print media work processes are changing most among media. However, Internet, mobile and other new form of distribution are providing all types of traditional media new opportunities.
Similar things have happened in the television business. The change from a limited number of television channels to hundreds of television, cable and satellite channels spread the audience, reduced the viewers of dominant stations, and made advertisers unwilling to continue paying previous prices. The big 3 networks could count on ratings in the 20s to 30s in the 1970s, but today they achieve ratings in the teens and are fighting to stay among the big 3. Nevertheless, viewers want network programming--on TV, as DVD, as syndicated programming, as downloads. There is no sign that demand for interesting programs is diminishing even if the basic television ratings are falling and new ways of monetizing the content are being developed.
We all need to recognize that changes in traditional operations are painful for industries, companies, and their personnel and that the contemporary changes are placing a lot of stress on management and employees. Everyone would prefer to continue doing things in the old ways they know well, but because of the new conditions those business models, processes, and market techniques aren't working as effectively as in the past.
The biggest challenges facing people in traditional media today are pessimism and lack of vision. Morale in publications and stations continues to drop, and doom and gloom are everywhere. That negativism makes things worse internally, reduces confidence of advertisers and investors, and makes it difficult to think about trying new things or even trying old things in new ways. The first step out of this condition is to stop lamenting the passing of the past. Things will never be the way they were. So get over it. Move on. Discover and embrace new ways of operating and new opportunities to prosper and grow.
Trade publications and industry association meetings are filled with news of diminished budgets, reorganizations, consolidations, and layoffs. People say traditonal media are declining and will soon disappear. Potential employees are wondering if there is a future for them in the industries and senior employees are hoping their jobs will last until they reach retirement. Everyone is pointing the finger,but most of the blame for killing traditional media is laid on the Internet, mobile media, and young people.
There is just one problem with their scenario. IT’S NOT TRUE. We have deluded ourselves into thinking that well established media are dying and that young people are uninterested in traditional text and audiovisual media.
Although new distributors of information and entertainment abound and video on demand and consumer-created content are increasing daily, consumers’ greatest time allocation and advertisers’ greatest expenditures remain with traditional media. Although young people have adopted newer media technologies more rapidly than other population groups, most of their media use still involves film, television, magazines, and non-traditional newspapers.
If the death knell for traditional media is not ringing, why do industry personnel keep hearing bells in their ears?
The reason is that significant changes are underway and most people don’t understand them. We have reached a era when the collective weight of expanded offerings of traditional media and the appearance of new types of media are ending the relatively undemanding operating conditions that existed due to lack of media choice and are removing the effortless profits that traditional commercial media enjoyed for a half century.
Suddenly there is competition. Suddenly there are financial losses. Suddenly there are company failures. Suddenly audiences are no longer satisfied with the “take content on our terms when we want to deliver it” approach that traditional media have offered. Only it wasn’t really sudden. Those factors have been growing incrementally for at least three decades. The problems were certainly compounded by the arrival of Internet and mobile content distribution, but they were not caused by them.
Let’s look at the case of the newspaper industry in the U.S. Readership problems have been evident for half a century. Although actual circulation rose continually throughout the twentieth century, reaching a height of 62.6 million in 1993, penetration has declined steadily at 1 to 2 percent each year since 1950. The pace has been steady despite the appearance of additional types of media. The expansion of network television didn’t increase the loss, the arrival of cable channels didn’t amplify the decline, and the arrival of the Internet didn’t boost the pace.
Today, the Internet is having an affect on advertising, but even that is not disastrous despite the wailing and gnashing of teeth. Total U.S. newspaper advertising was $46.6 billion in 1999 and $49.3 billion in 2006. In financial terms newspaper advertising is rising, but when accounting for inflation it has basically plateaued so one can not say the Internet is killing papers. If we look at classified where the biggest substitution exists, classified advertising in newspapers reached a height of $19.6 billion in 1999 and it was $16.9 billion in 2006. Clearly a decline occurred but it was offset by the fact that newspaper online advertising produced $2.6 billion in 2006. Overall, the business has stopped growing and investors are unhappy, but the industry isn't dying.
Certainly, the Internet is having many effects on established media. Research shows that print media business models have been least disrupted, unlike audiovisual media, but that print media work processes are changing most among media. However, Internet, mobile and other new form of distribution are providing all types of traditional media new opportunities.
Similar things have happened in the television business. The change from a limited number of television channels to hundreds of television, cable and satellite channels spread the audience, reduced the viewers of dominant stations, and made advertisers unwilling to continue paying previous prices. The big 3 networks could count on ratings in the 20s to 30s in the 1970s, but today they achieve ratings in the teens and are fighting to stay among the big 3. Nevertheless, viewers want network programming--on TV, as DVD, as syndicated programming, as downloads. There is no sign that demand for interesting programs is diminishing even if the basic television ratings are falling and new ways of monetizing the content are being developed.
We all need to recognize that changes in traditional operations are painful for industries, companies, and their personnel and that the contemporary changes are placing a lot of stress on management and employees. Everyone would prefer to continue doing things in the old ways they know well, but because of the new conditions those business models, processes, and market techniques aren't working as effectively as in the past.
The biggest challenges facing people in traditional media today are pessimism and lack of vision. Morale in publications and stations continues to drop, and doom and gloom are everywhere. That negativism makes things worse internally, reduces confidence of advertisers and investors, and makes it difficult to think about trying new things or even trying old things in new ways. The first step out of this condition is to stop lamenting the passing of the past. Things will never be the way they were. So get over it. Move on. Discover and embrace new ways of operating and new opportunities to prosper and grow.
Wednesday, February 13, 2008
CHALLENGES OF TROUBLESOME AUDIENCES
Media companies have historically been relatively unconcerned about and even disdainful of individuals in their audiences.
Publishers produced newspaper in ways and at times that was convenient for themselves. Television channels offered programs on a take-it-when-offered basis—Too bad if you visited your mother and didn’t see it. Journalists and public service broadcasters conceived the public as an unkempt mass that need to be educated and led to think correctly and do the right things.
Audiences were things to aggregated and sold as commodities, so media executives pretended audiences were a unified, stable group in sales pitches and that advertisers were purchasing the same group of people hour after hour, day after day, week after week.
The reality is that audiences have always been individuals that changed constantly, but media companies needed to pretend otherwise in order to aggregate them and portray them as a unified group for sales pitches. A TV channel would tout itself as best at reaching women between 25 and 54 years of age, a magazine would promote that it offered more business decision makers than any other magazine, and a newspaper would tell advertisers its readers ate at restaurant an average of 125 nights a year. Never mind the others who watched the channel, read the magazine, or stayed home at night.
The façade put up by media companies is eroding rapidly and is one reason why there is so much unease and shifting in media advertising markets today. Advertisers have discovered the big lie that audiences had specific characteristics and were stable.
The ascendancy of customer relationship managements and personal marketing, and the personal identification of audience members in interactive media have moved businesses to view them as individuals and to recognize that approaching them on an individual rather than mass basis increases return on marketing and advertising investments.
Media companies are waking up to the nightmare that many advertisers find the idea of mass audiences less appealing. At the same time, media firms are shifting their own offerings to try to make content—news and information, TV programs and films, and magazine content—available to individuals any time, any where, and across any platform.
Unfortunately most media companies are finding they know everything and nothing about their audiences. They know their average characteristics, habits, and purchases, but they no little about them individually, their individual lifestyles, and how they individually consume media and other products.
Media companies have a great deal of catching up to do in order to understand individual consumer behavior and its implications for their business models. Doing so will be difficult because media companies tend to know less about their customers than other types of companies. In the past media CRM programs have been absent and audience research has been relatively unsophisticated and had limited applicability.
One of the first lessons media executives are learning is that human beings are troublesome. They tend to do what they want, when they want, and how they want. They resist being constrained and controlled. They are prone to changing their minds and interests. They want flexibility in their lives. They make it different to predict their preferences because their tastes and needs change over time. They are fickle consumers who have the audacity behave as individuals rather than an aggregated group.
Some consumers want music while they are walking to the office; some want news about stock prices at 10 a.m.; others want short video entertainment when they have a coffee break at 2:30 p.m.; some want to view a prime time TV program at 5:30 p.m. when they are taking the commuter train home; still others want a recipe from a cooking magazine at 6 p.m. when they get home or a video of their choice at 8 p.m.
These demands are highly problematic because media technologies and industry structures have traditionally allowed them to tell consumers what they would get to consume and when they would get to consume it. Few companies have the competence or infrastructures to handle the new demand-driven world of media.
Media companies need to make understanding audiences and the individuals that join audiences center point of their management attention. They need to find ways to develop better relationships with them if they are to prosper in the changing environment. It is a strategic challenge that must addressed if companies are to remain vital in the media choices of their customers.
Publishers produced newspaper in ways and at times that was convenient for themselves. Television channels offered programs on a take-it-when-offered basis—Too bad if you visited your mother and didn’t see it. Journalists and public service broadcasters conceived the public as an unkempt mass that need to be educated and led to think correctly and do the right things.
Audiences were things to aggregated and sold as commodities, so media executives pretended audiences were a unified, stable group in sales pitches and that advertisers were purchasing the same group of people hour after hour, day after day, week after week.
The reality is that audiences have always been individuals that changed constantly, but media companies needed to pretend otherwise in order to aggregate them and portray them as a unified group for sales pitches. A TV channel would tout itself as best at reaching women between 25 and 54 years of age, a magazine would promote that it offered more business decision makers than any other magazine, and a newspaper would tell advertisers its readers ate at restaurant an average of 125 nights a year. Never mind the others who watched the channel, read the magazine, or stayed home at night.
The façade put up by media companies is eroding rapidly and is one reason why there is so much unease and shifting in media advertising markets today. Advertisers have discovered the big lie that audiences had specific characteristics and were stable.
The ascendancy of customer relationship managements and personal marketing, and the personal identification of audience members in interactive media have moved businesses to view them as individuals and to recognize that approaching them on an individual rather than mass basis increases return on marketing and advertising investments.
Media companies are waking up to the nightmare that many advertisers find the idea of mass audiences less appealing. At the same time, media firms are shifting their own offerings to try to make content—news and information, TV programs and films, and magazine content—available to individuals any time, any where, and across any platform.
Unfortunately most media companies are finding they know everything and nothing about their audiences. They know their average characteristics, habits, and purchases, but they no little about them individually, their individual lifestyles, and how they individually consume media and other products.
Media companies have a great deal of catching up to do in order to understand individual consumer behavior and its implications for their business models. Doing so will be difficult because media companies tend to know less about their customers than other types of companies. In the past media CRM programs have been absent and audience research has been relatively unsophisticated and had limited applicability.
One of the first lessons media executives are learning is that human beings are troublesome. They tend to do what they want, when they want, and how they want. They resist being constrained and controlled. They are prone to changing their minds and interests. They want flexibility in their lives. They make it different to predict their preferences because their tastes and needs change over time. They are fickle consumers who have the audacity behave as individuals rather than an aggregated group.
Some consumers want music while they are walking to the office; some want news about stock prices at 10 a.m.; others want short video entertainment when they have a coffee break at 2:30 p.m.; some want to view a prime time TV program at 5:30 p.m. when they are taking the commuter train home; still others want a recipe from a cooking magazine at 6 p.m. when they get home or a video of their choice at 8 p.m.
These demands are highly problematic because media technologies and industry structures have traditionally allowed them to tell consumers what they would get to consume and when they would get to consume it. Few companies have the competence or infrastructures to handle the new demand-driven world of media.
Media companies need to make understanding audiences and the individuals that join audiences center point of their management attention. They need to find ways to develop better relationships with them if they are to prosper in the changing environment. It is a strategic challenge that must addressed if companies are to remain vital in the media choices of their customers.
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