The development and trial of new business models that utilize digital interactivity to generate revenues is becoming sport at many media and entertainment companies. And everyone is playing to win. Even as television networks and film studios wrestle with striking writers over payment for scripted material used in streaming, downloaded and other new media video, they are testing promising compensation models.
Intensifying free-market competition will accomplish what the Federal Communications Commission did not: Entice heady cable operators to give consumers more choice and less bundled bull. The same goes for telephone and satellite rivals, which have learned everything they know from the cable giants.
Robust consumer electronics sales this holiday season may be good for an ailing economy and advancing digital interactivity, but it will be bad for a challenged environment. Clearly, consumer electronics sales online and offline are a major contributor to the overall consumer spending. A more dubious and rarely mentioned distinction: Those robust sales also will result in more than 2 million tons of discarded electronics (or e-waste) this year, only about 11% of which is expected to be recycled.
The greatest impetus for a settlement is the reaffirming signs that the writers' strike is taking a big bite out of declining TV advertising that for the broadcast networks could exceed $500 million in lost revenues and exacerbate 4% negative growth at TV stations. TV executives fear the ad spending lost during the strike to the Internet and other fledgling interactive platforms will be difficult to recoup, given the Web's steady double-digit growth momentum and the overall economic downturn.
Elusive consumers are being pursued with wild abandon by television networks, while newspapers and online advertising networks are kicking into high gear. E-commerce is up, and more marketing is migrating online. Traditional media's greatest risk is not holiday shopping levels or next-quarter ad spending levels. It's whether it can keep pace with consumers and marketers in an interactive marketplace in which connections--not just commerce--define their existence.
It is striking to ponder Amazon founding chairman Jeff Bezos' strategy behind the new electronic book reader, Kindle, the same week the National Endowment for the Arts reported an alarming decline in American reading levels and proficiency. Clearly, Bezos is hoping Kindle will do for e-Books what Apple's iPod has done for digital music.
The anticipated bidding war over the last bit of wireless spectrum among Google and other high-profile telephone and cable companies isn't as important as what the winner does with the spoils. Despite intensifying speculation about Google's posture in the Jan. 24 spectrum auction -- from being a tease to partnering with stealth equals -- the search giant is demonstrating its ability to serve as a catalyst for change.
This is the first major stretch of economic volatility in which the Internet is providing an alternative ad platform rivaling the potency of more traditional television and print. Any smart advertiser will continue to leverage brand recognition with television's broad audience, while nurturing individual loyalties and interactive transactions with online users.
The Internet allows users to delve deeper into their interest areas more frequently and effectively than any other platform in history. But as our online management tools become more pre-set and precise, we become less intent on random search and discovery. It's a tradeoff that comes at a subtle but significant price: It produces a narcissistic populace well-versed in their own interests, but ignorant about the world at large.
Media companies hoping to recapture double-digit growth in markets outside the U.S. are running headlong into a buzz saw of changing global dynamics, complicated by such disparate factors as the weakening dollar, China flexing its new economic muscles and the clashing of cultural expectations worldwide. At a time when traditional media growth is virtually static for many companies, and booming returns from digital are years away, an earnest run at globalization seems like a solution. But nothing is that simple.