Media Companies Need To Capitalize On Social, Interactive Realities

The paid content quandary grows more interesting and steps closer to resolution with every new development from industry change agents, such as Amazon, Apple, Netflix and major content providers NBC Universal, Time Warner and News Corp.

Inevitably there will be more pay for access solutions given the confluence of mobile social interactive technologies across the digital landscape. But are content providers, marketers, service providers and consumers willing to make the most of it?

A new digital merchant bank CoRise Co. recently devised a fascinating infographic for conceptualizing the boundless interplay of players in four primary areas of digital concentration anchored by four major players: social (Facebook), information (Google), transactional (Amazon) and entertainment (Apple). The infographic that underscores the endless opportunity is part of a larger presentation on Business Insider.

All of this should make a more fertile, exciting time for entrepreneurs and innovators. But the languishing economy has made traditional and newer companies alike cautious about spending to develop ideas. Resistance and slow adoption to date has hindered the emergence of a new interactive economy across these spheres. Still, various players will spur innovation of new products and services while reinvigorating existing media and marketing business models. It is a question of when, not if.

For now, these industries are being manipulated and driven by cyclical and market-triggered events that prompt players to test the waters to offset the gradual erosion of their core revenue streams. Consider how these recent developments and data points present both opportunities and challenges. For example:

NBC Universal, Walt Disney Co. and News Corp. have retreated from selling their online content service, torn between inadequate offers and an emerging paid-content marketplace raising the bar on fluctuating values. In a joint statement, the owners, which reportedly sought $2 billion, say they have determined there is, in fact, “a unique and compelling strategic value to each of its owners.”

The bottom line: hasty moves like selling off a viable interactive content platform do not make sense in a rapidly changing landscape where there still are no clear paths to content monetization. But there eventually will be. Google remains the most likely strategic buyer to eventually pay up for the service if the traditional content owners are foolhardy enough to put Hulu on the auction block again at any price.

What analyst Richard Greenfield called “the devaluation of freshness” is altering consumers’ perceived value of theatrical films and other content torn away from conventional exhibition windows that assured a return on investment. More powerful, accessible technology allows consumers to shortcut that system at every turn.

Declines in movie theatre attendance, DVD sales, syndicated TV program ratings and pay TV subscribers (according to data compiled by IHS iSuppli) point to a shift in consumer viewing habits that hinges on their control of relevant content and services from their mobile devices. That increasingly involves some form of social sharing.

The bottom line: with more people sharing content vs. users of new technology and content, Hulu and other paid and free content platforms should be capitalizing on the social phenomenon for revenue growth.

Even with its recent reversal on the creation and almost immediate collapse of Qwikster, which would have encompassed the company’s decelerating DVD service, Netflix’s Reed Hastings showed a stunning lack of understanding about his customers and the video marketplace. Comcast Xfinity, Amazon and Apple are among the companies presenting alternatives that threaten Netflix.

The bottom line: constant evaluation and innovation of consumer behavior patterns is essential for any company to remain competitive. Assumptions are only as good as your last look.

*That hasn’t deterred studios, home entertainment retailers and consumer electronics manufacturers from straining to develop the ultraviolet distribution of content enabling buy once, play anywhere” functionality for home entertainment, according to Greenfield. The new application of the new technology still lacks a fully launched ecosystem, a common downloadable file and necessary consumer education to facilitate widespread adoption.



That hasn’t kept the ultraviolet faction from battling Apple iTunes. Even in the post-Steve Jobs era, any effort by the company to integrate its lukewarm Apple TV product into its new iCloud platform could produce a compelling renewed offering for the iPad that could provide ultraviolet content distribution.

The bottom line: as evidenced with the recent unveiling of more sophisticated and functional 4S iPhone, it is more important for Apple to refine and advance its existing anchor devices than to roll out new devices.

*Marketers and agencies will find themselves boxed in a corner when enough of the right interactive content and services are in the right hands. Bold experimentation with interactivity on niche content platforms especially represents the only sure way to recreate and redefine marketing into more valuable transaction-based consumer connections.

The bottom line: Dave Edleman last year presented a compelling picture of how five fundamental media forms -- paid, owned, earned, sold and hijacked -- will continue to integrated and interact to create new marketing opportunities and companies.

The bottom line: the McKinsey and Co. overview is still relevant as there continues to be profound change in the way consumers perceive, absorb and act on marketing messages. Marketers, agencies and media companies that resist change do so at their own peril.

4 comments about "Media Companies Need To Capitalize On Social, Interactive Realities".
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  1. Brian Hayashi from ConnectMe 360, October 18, 2011 at 9:57 a.m.

    Um, I think you mean "ultraviolent" distribution of content, not "ultraviolet"...and I think it is Dave Edelman, not "Edleman".

    Perhaps the narrative behind the presentation was more compelling, but it appears the deck failed to clarify that (1) direct-to-user addressability is behind the social media growth curve; and (2) the types of "users" are multiplying to include devices and objects, well beyond household-level addressability.

    (A note on addressability: once we could only target people if we had their specific name, mailing address, etc; but these new technologies are enabling more fine-grained targeting, as discussed elsewhere in Erwin Ephron's classic example of 'acid reflux sufferers'

  2. Douglas Ferguson from College of Charleston, October 18, 2011 at 10:55 a.m.

    Ultraviolet is correct. Another great article, Diane.

  3. Jay Levin from Kerr Hill Inc., October 18, 2011 at 11:32 a.m.

    Right on Diane!

  4. Malcolm Rasala from Real Creatives Worldwide, October 18, 2011 at 11:57 a.m.

    What a lot of words!. Saying? Essentially nothing. Sorry but this is words for words sake. Who is enlightened? And about what?
    When one has nothing interesting to say best to say nothing.

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