• by The Riff , October 17, 2006

WATCH OUT BELO -- When exactly did the bubble begin swelling again? It probably began right after the last one burst a half dozen years ago. You know, the one that popped with the fury of a big bang rippling, not just through the online or general media industries, but through the global economy as well. It was a setback for sure, but as unrealistic as the Internet's late-90s run-up was, so was its early millennial letdown. It's taken a few years to correct itself, but the Internet has once again emerged as the central source transforming our industry--and our world. Okay, so that comes as no big epiphany. We all sort of know that. But when exactly did it flip back into dominance again? And will the current preoccupation prove as unrealistic as the last one did?

These are the questions we've been asking ourselves for much of the past year, when the level of rhetoric surrounding the Web resumed to pre-2000 levels. Surely, at least part of it was triggered by Apple's deal with Walt Disney Co. to begin distributing prime-time ABC TV shows over the Web via iTunes. That got everyone's attention. And everyone seems to have put the Internet back at the center of their strategic planning: the networks, the studios, the advertisers and the agencies. Of course, the consumer has been doing this all along.

The bursting of the first dot.com bubble may have set some business models back a few years. It may have tempered some business plans with a much- needed dose of reality. And it may have proved a brief respite for offline media businesses. But consumers have continued to incorporate the Internet into their lives--both lifestyles and workstyles--all along the way.

Broadband has helped. The always-on, super-fast access to the Web makes it the rightful heir to all other mass media platforms in terms of content delivery. Nothing can beat the Web for instant media gratification. And if it weren't for those pesky little screens and keyboards, cell phones and wireless devices might actually rule the media roost here, the way they are beginning to in some overseas markets. But isn't mobile just another way of accessing the Web? Ultimately, we think it will be, and as screen and hand- held interfaces evolve, online will master the limits of space, much the way it is breaking the barrier of time.

With the acceleration of IPTV deployments, the Internet ultimately will supersede traditional forms of broadcast, cable and satellite TV distribution. It will become our ultimate content server. Yes, we'll continue to use the cable industry's backbone to access the Internet at high speeds, but it will lose its enviable role as a content gatekeeper. Bandwidth is a commodities business. Content is IP, which of course, stands for both "intellectual property" and "Internet protocol."

Why all the musings? Well, there is a point in stepping back every so often and marveling at the momentum of these changes--and considering how momentous they truly are. Just a few weeks ago, Yahoo CMO Cammie Dunaway described the new-media user in a very fresh way that got our minds around what's really going on. She called him the "consumer 2.0." She's likely used that phrase plenty of times among the digerati set, but when she used it during a presentation at the Association of National Advertisers conference, it seemed to resonate with the crowd. We're not simply talking about new media here, she seemed to suggest. We're talking about a new type of consumer.

She's right, of course. People are evolving as media consumers. We just need to step back to see it. And it's not just because of new technology. The technology is releasing behaviors consumers have been repressing for years under a big media model and a mass marketing structure. They are behaviors that Yankelovich consumer guru J. Walker Smith says are at the core of human nature: The freedom to choose what we want, when we want it and how we want it. Marketers and media companies who understand this rule will prosper in the age of customer control--the age of Consumer 2.0.

The marketing honchos at the ANA conference seemed to understand this--uncomfortably so--but didn't always seem to know what to do about it. They gave some great rhetoric, and showed some really good case studies, but are they really ready to turn the tables? Are they really ready to let the consumer tell them what to do? We're going to find out very soon.

Meanwhile, we're more concerned with how some media content owners are dealing with the shift. We use the term "media content owners," because we no longer think media is a conduit business. And when we refer to TV networks, radio stations, magazines or newspapers, we're not thinking in terms of distribution. We're thinking about what they have to distribute. And perhaps more importantly, whether it is something the consumer 2.0 actually wants to get from them. We're really not sure they understand that--yet. Some obviously do. Premium content brands like The New York Times and The Wall Street Journal understand it. Others, like the major TV networks, are beginning to. But for those who don't truly offer differentiated content, well, they're in for some trouble.

That's what we were thinking when we read a copy of a letter Belo chief Robert Decherd sent to his troops on Monday.

"Strong signs of progress are evident across Belo," Decherd wrote in a surprisingly candid memo that reveals much about how the management of a big local content company like Belo is thinking these days.

"We are making real headway in focusing our businesses to compete effectively in an increasingly Internet-centric marketplace," he continued, adding that Belo was reshaping its operations to simultaneously pursue new revenue streams while managing the expenses of its old-line businesses. "The goal," he said, "is to assure that Belo will continue to be the leading local media source in the communities we serve."

It's an admirable goal, but from what we can see, Belo is only partway there. It's beginning to understand that being a leading local content source is not what it was in the pre-Internet era, when monopolistic control over local distribution pathways was enough to ensure dominance. These days, local consumers 2.0 can get that just as easily--and perhaps more quickly--from other Web-based sources. But Belo is beginning to recognize this fact, and in at least a few markets, has flipped its distribution model, adopting an "Internet first approach," and relegating the print editions of its newspapers to second-class citizens.