There is No New Media: It’s All New Consumption

59 Comments

“The most ominous of fallacies–the belief that things can be kept static by inaction.” –Freyda Stark

So, now television broadcasters are blocking Google TV from getting access to the content they’re putting online. They want to make sure they don’t lose their advertising dollars. News flash: The cat is out of the bag. All information (including your precious television shows) are nothing more than bits on one network to rule them all — the Internet.

The knee-jerk response from the television industry and media to services like Google (s GOOG), Apple (s AAPL), Amazon (s AMZN) and Netflix (s NFLX) is a typical reaction from institutions of the past century, and a result of limited and short-term thinking. Unfortunately, the broadcast industry aren’t the only ones.

Every so often, you hear executives bemoaning the demise of the newspaper business, the declining fortunes of radio networks and the crumbling of the television industry. There’s talk of the music industry being at the point of no return, and one could probably add Madison Avenue to this gloomy outlook.

When I look at these industries and the failure — or impending failure — of these institutions, I see a fundamental mistake on their part to understand their own core businesses. They fail to see the world in a larger context, and instead, choose to focus on maintaining the status quo. If they took their cue from Apple (everywhere computing) or Amazon (any content anywhere), they could have found answers to their problems.

The trouble with print media (newspapers in particular) is it has never forced itself to look into the future, even though its employees were amongst the chroniclers of the future. Newspaper executives never really focused on the reality that as the Internet became pervasive, the idea of a daily newspaper was going to become the subset of an information business –- part of an amorphous goo we call MEDIA. From Facebook to Google to Twitter to blogs, we are all part of a bigger “information” business.

Because these new media are attuned to the needs of a new kind of information consumer, it’s hardly a surprise that media’s single largest source of revenues — advertising dollars — are getting sliced and diced in pursuit of this elusive, always transforming, info-savvy media consumer. Unfortunately, the media is used to selling page views, impressions and massive audiences: metrics as archaic as drinking on the job and smoking in a doctor’s office.

The same reasoning also applies to the music industry. If you stop looking at the music businesses from a myopic standpoint — a malaise so common in a world full of mediocrity — you see that CDs and albums are a subset of a bigger business. Let’s call that bigger business the music experience. Spotify, Pandora Music, LiveNation, Last.fm, MOG — they are all part of the bigger music experience  that combines everything from buying music on iTunes, to tickets at LiveNation to sharing playlists with friends to getting recommendations from others whose taste we trust.

The television industry, which is currently having its own Waterloo moment, is in trouble, because it never looked into the future and thought of itself as being part of the bigger business that is video. By thinking holistically about video (and not just TV), the content creators can (and some are) profiting from that shift to a single mode of distribution: ESPN (s dis) and MLB, for example. But most aren’t. The clumsy blockade of Google TV by broadcasters shows that you can’t make an elephant dance!

For the media industry  (which is video, music and print), there has been one more, and perhaps the farthest-reaching, failure: the inability of the folks to grok that today’s audience is not tomorrow’s audience. It goes without saying there’s a whole generation of folk that has either grown up, or are growing up, on the Internet. Their consumption and online behavior is going to be predicated on a distribution medium whose basic premise is abundance. They will find, curate and consume on their own terms, on their own choice of screens and on their own time.

Generation D, where D is for disruption, is adapted to route around the old models: old models controlled by old men. My friend Pip Coburn believes that “routing around these old models” offers new opportunities. There’s a reason why IAC is, and will always remain, a reflection in a dirty pond –- a collection of properties that is unable to understand the new Internet people. If they don’t, someone else will, and they will become the next Ev Williams or Mark Zuckerberg.

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59 Comments

Darrin Searancke

Wow – you nailed it. Not just thinking ahead by days, months, quarters, or years, but by generations!

cubicspace

wake me when the “new” AOL actually has any value past a 3 year “myth of valuation” as opposed to the 100 year TIME WARNER.

same goes for your “new” young google and facebook.. or do you also not wanna mention your young Yahoo and its major success.

all youve done is kill advertising rich media and the value of human orientated content– for the noise of the static or data…

great for computers and their geek masters…and their bankers playing short term beta or obsolete virtual money games ala wall street did with derivatives..

but what about US?.. hang onot your writing eh? soon youll be SEO writing for accai hits on a relevency engine thats “just” .02 percent better than googles in 2015.

yes, the TV folks are dullard and slow..and living on the past alone.. but lets not call the young anything more than what they are… technoslaveowners..using the mass not as consumers, but as pure unpaid workers.

Jay

There’s no denying delivery middlemen tech is changing. But notable that most (all?) the “new/young” companies you mention are in the delivery business. And in large part, not of “information”, but of expressive material–works of authorship. Maybe “information” is just out there, waiting to be discovered and wants to be “Free”. I personally believe human creativity is a worthwhile, but not free, endeavor. If there’s no money flowing to the creators of content, the consumer will eventually get nothing but cheap/free to produce “content” (or recycled old stuff). Creator/producers do need to adapt to these new delivery media, and even to some extent to changed tastes: e.g., maybe the shortened attention span and “celebrity” private life obsessions of Generation “D”. Abundance is not automatically better. Grass is abundant, and we could eat that and be cows. Flying insects are abundant and we could eat them and be bats. Or we could reward a farmer for developing and planting better stuff or raising tasty animals. No reason to think they’d do it for free. Tweets and youtube videos (and blogs, for that matter)are abundant and can be amusing, for about a minute. If they indeed replace professionally written/edited newsmedia, film production and novels, the new world of abundance will be abundantly full of superficial fluff and self-aggrandizing puffery. What I hope is more likely is that we’re once again merely dealing with growing pains: new delivery models need accompanying new business models (getting the money from the consumer to the producer), and it takes time, creativity and negotiation to change and adapt. If instead we’re plunging into the dystopia you seem to glorify, Devo may have been ahead of its time…

futuretoob

There’s money to be made, if only they’d wake up and look for it. This is also the front line of the Net Neutrality debate. Cable companies are either going to start charging more for bandwidth as more people cut the cord, or outright blocking their online counterparts to avoid competition. The moves that they make are predictable and fall into two categories: stupid and stupider.

Ames Tiedeman

Well said. New consumption sounds far more logical. I would go further and say we have new channels of media delivery and new channels of media consumption. A new channel of consumption is using the iphone to surf the web. A new way to deliver media is twitter or a social network, for example. In the future I believe the place for massive change is in advertising. I think people selling things and marketing type companies are developing all kings of new ways to reach the consumer. How far are we from the day when you click on an ad in the morning and then at night as you are driving you car past some discount retailer you never heard of, your iphone alerts you that the item from the morning is on sale, off the web, at 50% off, just a block away?

Nick Waddell

I don’t think it’s that executives of these companies don’t necessarily understand what’s going on, more often I think that the way companies structure themselves open to this cycle. At such companies, the very people with the power to initiate change are the ones who incur the most risk by doing so. Why doesn’t Sony dominate the world of portable music players, or Blockbuster online movie rentals? Say what you will about Google, but at least establishing a culture of innovation and respecting that at the highest organizational levels is something they say they strive for…

ronald

“The best way to predict the future is to invent it.”
Early meeting in 1971 of PARC, Palo Alto Research Center, folks and the Xerox planner. Alan Kay

Just a reminder for the people who wait for the finial clear moment. But as the quote also shows, the people seeing the future might not be the successful ones (in money).

Todd Cochrane

The challenge those of us that are new media is still facing is that media buyers are still having a very difficult time figuring out how to explain the content to the companies buying advertising.

We represent 6500 media creators reaching over 45 million viewers each month, yet the media buyers treat those content creators and their serialized content like a experiment.

When the media buyers release their constraints on spending ad dollars in significant amounts against the true new media inventory that is available then and only then will the major mainstream media companies wake up.

I find myself pounding me head against the wall a great deal still in trying to get the media buyers to just spend their rounding errors against the new media space.

Jason Lefkowitz

“The trouble with print media (newspapers in particular) is it has never forced itself to look into the future, even though its employees were amongst the chroniclers of the future.”

This just isn’t true. Read up on the newspaper industry’s investments in videotex, for instance, which was providing online content before the Web even existed.

They ended up fumbling the ball, of course; they bet heavily on services that failed (videotex, proprietary online services like AOL and Prodigy) and lightly on services that succeeded (the Web). But it’s not fair to say that nobody in the print media saw the future coming — plenty of folks did. They just didn’t understand the shape it would eventually take.

vcmike

Om I could not agree more. I was at a dinner event last week where a mainstream (aka “dinosaur”) media company exec was supposedly discussing tech innovation. And he actually was defending the cable companies as delivering a good value and a good consumer experience. I couldn’t decide whether to laugh or cry…

Angel

Om, you might be right but this is not old media trying to fight a battle, this is old media retreating from a lost battle while trying to minimize casualities. Don’t you think cable operators have reach this same conclusion long time ago? Don’t be naive! Of course they have. But changing the direction of big corporations its not as easy as writing a blog post or opening a Twitter account. they are buying time because right now it’s what they can do to ensure their business keeps going and they’ll do it until it’s not longer feasible and THEN it’s when they’ll try to reinvent themselves. some of they will try to early and die, some of them will try to late and die, a couple of fortunate ones will figure out how to live in this new environment.

What your are telling is probably true, but it’s also batlantly obvious. Now think what would you do if you were in charge. Would you put all your money in digital distribution? Hulu, maybe? What if hulu never reach a point that let you sustain your workforce and make profit? 99 cent iTunes rental? What if ITunes tank?

A couple of years ago you might remember Digg being the darling of all the newspaper industry. Every week you could hear rumors of a large media group about to buy it and how much sense that made. Look at it now. What about all the companies that tried to be fast and reinvent themselves into what looked like the next big thing. Myspace? What about Second Life? (how much money has IBM throw into that hole?).

I work in a newspaper (a “doomed” industry if there’s one) and it’s always funny how many times you face people trying to show you how you’re business is going to tank. Believe me, we know. We know and some of us will still tank but its not because we couldn’t see this coming, its because when you have a big company, turning it around at the right time (and, again, no one knows when the right time is or where you should turn) is not an easy task. ask Microsoft, ask Sony, ask Yahoo! They have tons of talented and visionary people inside (and you know a lot of them) but they are struggling to make the right choices. What looked good 3 years ago, when they started planning for a change, might not look so hot now. And it’s the same for cable operators.

JeanLuisGaseous

Like reading a vanity license plate. Time to take off the pointy Mr. Internet cap. Missed it by a long shot.

Skip is on target when he notes that the television networks are in control of their content and looking squarely ahead. The only cat that is out of the bag here is that cable and the telcos and the broadcasters have gotten together and are making sure that you are not going to get that latest episode of Bones for free, just because Google sticks a logo and an ad of theirs somewhere.

Your bandwidth will be tiered, shows will be blocked per device and rates will get adjusted upwards if/as people start cutting cable to go IP. (They’re the ones who control access to the Internet, remember?). You don’t have a choice in the matter anymore, and all those years of bloviating about how the “unfettered market will adjust and provide competition” are coming back to bite all the nouveau techno libertarians in the ass.

A more accurate reading is that Google misjudged the broadcasters (like they did authors with their book project) and will need to cut a deal with them quick or their TV platform will remain the roadkill it has become, while the tv viewers aren’t going anywhere.

Skip

Big difference here between the networks and the record labels. The labels stuck their head in the sands when it came to distributing their content digitally. They would not even do it on their own sites. They stuck to “old tech” forms of distribution namely the ‘CD’. They were not just anti iTunes they were anti Mp3. The Networks and studios thou have done a great job of embracing digital distribution. They have their own sites, and apps, and content partners that distribute their content digitally and they have been very successful at it. So they are not “sticking their heads into the sand when it comes to digital internet distribution, they are just determining which platform they want to be on. Which they are entitled to do, just like I prefer to put my videos on Blip TV instead of You Tube.

trip1ex

CAble is really what started to kill off broadcasters.

Broadcasters have been losing audience share for quite awhile now to cable tv programming.

Broadcasters used to be able to attract audiences of 20-30 million and more. They were the only ticket in town. The last episode of Mash and the Who Shot JR episode of Dallas had massive audiences approaching 100 million if I remember correctly.

That’s not the case now of course.

I’m sure the internet doesn’t help, but it’s not what is killing off broadcasters so much.

Vijay Shekhar Sharma

Absolutely awesome. Can’t be written better.
Cheers Om!

Benjamin Wade Inman

Great article! A basic study of demography would help ANY Executive in the media industry to better understand their own markets. Until that happens or until these guys cycle out of their current position we will continue to see lagging.

Under the newly formed Parable of Sound, I consult with heads at major music companies on a regular basis and it’s a little disheartening to see so many “waiting”. On the other hand, we are working with a few clients here in Nashville that do get it, and you will begin to see some major advancement coming out of Nashville very soon! The golden years of the music industry are yet to be seen.

Kyle Nelson

Om,

It is truly amazing that even when they see the end coming, they don’t ask themselves, “what business am I really in”. Fabulous post. Yesterday, I posted about the “Evolution of Media Themes” and how we’re now more interested in engaging with “believers” than attracting readers, listener, unique visitors…

Veit

The unfortunate by-product of this will be that the quality of future content will be diminished. If there’s less money in the system, either less content is produced (we’re seeing an explosion of content right now) or the quality has to give. Investigative journalism is the best example for this – it’s basically gone today (OK, not only due to economics, but also due to political reasons). Who will produce high-quality content in the future with a fraction of today’s dollars? Who can we trust to properly fact-check and vet content before it’s going to be published, if these entities/institutions cannot make (enough) money?

As much as I believe in consumption / new media, I’m wrestling with these question…

Steve

Yep. Here we all are. Passing around virtual high school classroom notes to each other. Fun to read but basically fluff. Lots of that on the Internet. Who needs professionals? Plus, yech, you have to PAY them!

Ramin

I agree – big budget content might not exist. But lets not tie big budgets to high quality. Big budget content has to appeal to the masses which usually means the content will have to be watered down to the point where all people enjoy it and all advertisers approve of it.

There will be a trade of for consumers in this new era but I think the good far outweigh the bad.

Brian S Hall

Wow.
People are gonna say you just got a bunch more money for your blog network so you’re swinging the big dick. Maybe. Doesn’t make you any less right. And right you are.

On my site I write about how the mobile web is destroying industries like media. It’s labelled: information wants to be monetized.

This Generation D you talk of is willing to *pay* for content. But, the content they want. Not 100 channels they don’t. And, they want it anytime, anywhere.

But your post is probably one of the best things I’ve read of yours in a long while.

original insider

i have been reading this exact same tedious rant for 20 years. please. stop. please? get over yourself. you are not that smart and degfinitely not that visionary. things change. duh. established constiuents try desperately to protect and preserve their power. duh. but still, things change.

duh

sorry, wish i had more time to keep commenting, but i have to go read this exact treatment of this exact topic on 100,000 or so other blogs.

Mark Hall

This is a great post, Om.

There is an added complication for the television business that didn’t apply to the music or newspaper businesses – the complex dependency on cable and satellite carriage fees (including, now, for networks like ABC and Fox).

The people slamming the brakes the hardest are the senior licensing and sales teams at the networks — the people who negotiate carriage rates with the cable operators. They know one thing — that digital distribution deals make their lives harder. That every show that goes on Hulu or Netflix gives the cable operators a reason to say no to any carriage fee increases; and to start pushing the price down. And that means their bonuses go lower.

It’s a funny situation where people at these networks see the future, and want to embrace it. But can’t because of their total dependency on their carriage fee deals with the satellite and cable folks.

Huh?

One of the worst articles to date. Cheap cliches, no real solutions.

What would you do if you were a newspaper CEO or TV CEO?

Twitter and FB were accidental success, not the result of some master media strategist who wanted to kill off “old media”. It’s not like Zuckenberg said, I see an opportunity to kill newspapers and Google, here is my plan to get to 500 million users, etc. He just started a social network for fellow college students that kept on expanding.

So, if you were running the New York Times, what would you do?

Todd

“If you were running the New York Times, what would you do?”

Acknowledge the end of print is here, invoke my golden parachute’s ten million dollars, and retire.

@ted_brandt

I agree with both of you. On the one hand, fb and twitter were accidents of scale and were never drawn on a cocktail napkin as a way to take over… well everything. On the other hand, I don’t think they were monkeys seeking Shakespeare on their keyboards either. I think they represent(ed) the desire to circumvent the gatekeepers.

There is no perfect machine and big corporations and/or their industries – although inevitable, necessary, and useful – lack agility and vision as a result of their mass. Their size gives them the privilege to hold the keys to the city as we know – the bouncers for their respective clubs – but what they aren’t realizing is that we don’t care about being on their fancy list; there is no list.

If I’m having coffee with New York Times, I would tell him that his job is no longer deciding what is or isn’t popular or necessary anymore. His job is capitalizing on what is. And possibly most important, quit picking. Old guard media had to pick one form and be the best to succeed. Now they need to be in them all. Don’t stop sending out your paper newspapers New York Times but maybe trim the traditional stuff and direct attention towards interaction with the readers. Can’t handle all the feedback and engagement from readers? then it means there is an unmet need there.

In conclusion of my 2am ramblings, it’s like this. Mr. Goliath-Company-Exec, you don’t need to understand why Jackass the movie will be one of the highest grossing movies of the year. Like it or not it’s happening. What you need to decide is how are you going to get Johnny Knoxville to wear your company’s t-shirt in the movie. The Davids of this world are in the game and the Goliaths need to start ducking and bobbing or get knocked out.

James Craig Burley

But it’s their “accidental” history that makes the story all the more compelling; it wasn’t one behemoth targeting and taking over another in classic corporate-boardroom fashion. The fact that something as “accidental”, and ultimately simple, as Twitter or FB has pushed aside the attractiveness of advertising in traditional mass media exposes the (inherent?) weaknesses in that old advertising model. When you can’t easily predict who your challengers/enemies will be (as you could when only behemoths can challenge you); when you have to worry about a couple of college kids throwing together a website anywhere in the world; when you have to shut down access to popular sites and services via your own “pipes” in order to preserve your “revenue stream”: then your revenue model is no longer working as it once did.

Katherine Warman Kern

1) Quit tinkering and aim for profound innovation.
2) Send the legal department on vacation and tell them to come back open to re-think the legal implications of your new revenue streams.
3) Transform database lists and management technology into a visual, multi-dimensional representation of all the segments of the New York City “cultural community” and provide free access to anyone interested in probing to find out where they might fit in.
4) Invite those interested in being a part of the community to pay to be on the “map” and manage who has access to which personal assets shared on their profile page.
5) Provide tools for open collaboration between editors and programming management and members to identify what matters and probe diverse implications.
6) Position all talent, editorial and programming on the free “map” relative to which segment it is relevant to.
7) Add paid live event programming, accessible from anywhere, where journalists representing different points of view, probe all the implications, and in which the paid audience may participate with each other and with the presenters.
8) Then have legal department re-define terms of use and eliminate the privacy policy.

Rasul Sha'ir

Om,

I’m not sure exactly what Charbax meant but at the TechCrunch 2010 Disrupt conference John Doerr talks about the idea of the next evolution of the internet will be about people, places and relationships (what many tech companies really don’t focus on) and I found that very interesting and agree with him. He did a really interesting talk with Charlie Rose at the conference. In case you’re interested here’s a blog post I did on it. The video is worth taking the time to check it out (in case you hadn’t seen it). http://www.cnvrgnc.com/journal-old/2010/6/4/which-one-are-you.html

Rasul Sha'ir

Om,
I’m not sure what Charbax meant but John Doerr at this year’s Tech Crunch Disrupt conference hints at this idea (I feel) by saying that the next evolution of the web will be about people, places and relationships (not what many tech companies really focus on). I thought the idea was very intriguing and I agree with him on it. Here’s a post I did on it in June. The video is worth watching. http://www.cnvrgnc.com/journal-old/2010/6/4/which-one-are-you.html

Todd

Great post. You win for most articulate, well written version…

And Karl wins for funniest:

“That’s it. I’m blocking GoogleTV from accessing Broadband Reports. Nosy bastards driving up our ad revenue. I mean who do they think they are, using a browser to access content?”

http://twitter.com/KarlBode/status/28430790376

ronald

But the same can be said about SW. SW as a data transformation service is not written to be organized around people when and what they need. It’s still organized around data on a computer even if you run it on a phone.

Right now we have (are happy with) data access to “when and where we need” it, only with the amount of data ever rising we need to add “what” to the equation. To get there we have to combine social (data organized around people) and mobile (data organized around location) and consequential (data sequence neutrality).

Todd

One doesn’t wake from extinction.

Dinosaurs looked up, saw the meteor entering the atmosphere…

The end.

David H. Deans

And, it’s clearly not a phenomenon that’s unique to the big-media industry. When we recall how legacy thinking didn’t save PanAm Airways nor TWA, you have to wonder — which of the big three TV networks will implode first?

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