In my article, I commented, "We know enough about the future already to make investments in new business models virtually risk free. Yes, there is inherent risk in reduced commitment to current models, but we must realize the risk is even greater if these models continue to dominate, unchanged. If the media industry is ever going to change, it must do so soon. Executives could once confidently wait out change and succeed if they just stuck with three cardinal rules (1. Increase the amount of inventory, aka clutter; 2. Steadily increase costs, even if return value is declining; 3. Avoid providing any meaningful data on effectiveness and laugh whenever John Wanamaker is mentioned. He complained only 50 percent of his ads worked, but he didn't know which 50 percent.) Today the greatest danger to business executives in media and advertising is that they have no idea how quickly the walls are going to be torn down around them and, like the Communists, how extraordinarily unprepared most of them are."
Since I often write about the innovations and advances developed and implemented by media companies, agencies and marketers, there could be some confusion and sense that these commentaries are contradictory. Is the industry advancing or is it standing still? The answer is both. This week's National Association of Television Programming Executives conference in Las Vegas offered a perfect microcosm of the industry as a whole. At a convention historically attended only by a small segment of the industry--program producers and program distributors--there were several hundred new media executives from both the traditional players as well as many new broadband and mobile companies.
Of the sixty panels at NATPE, more than two-thirds were dedicated to new media, and indeed most had standing-room-only attendance. But a closer look at the panel attendees found that the vast--and I mean vast--majority were from the ranks of those who did not have day-to-day business to transact at NATPE. They were the new-media players, the press, the job seekers, and content producers looking for insights on how to gain distribution.
There were, it seemed, two NATPEs. One was for those who were looking toward the future; the other, for those who had active business meetings to attend and revenues to protect. The former included perhaps 10% of the attendees, and the latter, 90%. That's a fair representation of the business today: about 90% is focused on maintaining traditional business models and about ten percent on innovation and nontraditional models.
The most critical question facing executives across the spectrum of new and traditional media is what should that percentage be for their companies in 2010. In 2010, will the new participants be the wheelers and dealers, while the traditional players sit in panels trying to figure out what comes next? If they want to grow the 10% to, let's say, 20% nontraditional and innovation-based in 2010, then they need to start investing accordingly and investing even more aggressively in innovation.
Last July 13, I published a column commenting, "Cable networks need to make radical organizational decisions and better position themselves for the intense competitive battles ahead. The weapons for these battles will be new research methodologies that replace Nielsen, commoditized media auctions, integrated and multi-platform brand-centric solutions, and completely restructured sales and marketing organizations. If the cable industry continues to conform to the upfront-focused traditional supply/demand business models of the past, then the cable ship will continue to slide into the waters of shallow spending. Cable's strengths are not its cheaper costs-per-thousand and endless supply of inventory. Cable network management must refocus their energies on sweeping changes in inventory management systems and commercial supply, emerging interactive television capabilities including telescoping and ad supported video-on-demand, and exploitation of new research models. They need to embed marketers in the program development process. They need to embrace broadband and extend their networks into the online space, building community and user-generated content relationships with loyal viewers. Simply, they must redefine their businesses in order to reenergize them."
While accused of contradicting myself, these two columns, six months apart, seem reasonably consistent. Clearly, many media companies are making the transition and investing in innovation. The simple point I continue to try to make, perhaps a bit strongly, is that the marketplace is transforming ahead of their investments. And those who try valiantly to defend and hold onto the traditional models, the tried-and-true, and historical relationships without adapting aggressively to new models will find themselves increasingly behind the curve.