While the current economic crisis is unveiling a wealth of troubles for many businesses and industries, it’s also masking some fundamental issues. Advertisers, publishers and media companies will presume that, once the economy picks up again, and marketers assign larger budgets, that they, ad-supported media, will come roaring back with the economy.
But even Disney CEO Bob Iger acknowledges that changes in consumer behavior are due to more than the economy. Craig Moffett, an industry analyst at Sanford C. Bernstein & Company, told The New York Times that it's not correct to call the slowdown in cellphone sales "a cyclical problem."
Companies that seize market share and are able to do well over the next six months or year may, indeed, shoot out of the gates toward the end of ’09, or beginning of ’10 (advertising tends to be a trailing economic indicator, unlike the stock market, which leads). Traditional media that hasn’t done a good enough job of addressing the market shifts may do better then, but over time will be in jeopardy -- a possibility picked up noted by NY Convergence (which I've helped build as a consultant), contrasting the forward-looking mood at the AlwaysOn On Media conference with the somber orientation of media execs at the Crain conference across town in New York.
At the On Media conference you could almost feel a shift in the air. Everyone was questioning everything: What valuations are, whether the venture capital model really works, whether VCs ask too much for their money, whether ad targeting and re-targeting will fall prey to privacy concerns; even the demise of ad networks that bought lots of inventory who are now sunk by using arbitraging schemes of buying ad space in bulk from the likes of Yahoo, and are now unable to sell it at a profit. At the same time, a bunch of widget-makers like RockYou and Meebo, and ad networks, and early stage investors talked about great growth and huge opportunities. There’s some real disruption here, and it’s fundamental. Social media expert Larry Weber likened big media's practices of demanding control to mafiosi, and hinted that unpaid media would bust the system apart.
The shifts, I'd say, are more fundamental, even than the old saw about horse and buggy or train companies not understanding they were in the transportation industry. The new media industry may not be like the old media industry. Sure there is still advertising and aggregating audiences. Great stuff -- content, we now say -- gets watched and read and listened to. You can talk about audiences, and demographics, and screens and technologies. Fred Seibert, ex of MTV and other traditional media, now of Next New Networks, kept driving the point home in the most recent episode of Naked Media (soon to be live at NakedMedia.org) how much he could draw on lessons of the past to inform his practices today. Yes, but. And it’s a big but, because today’s media require not only a different set of technical skills, but also a different mindset, one where literally everyone with any networked device has the tools to do something they can call media. A world where media consumers want to talk back not by yelling at the TV or writing a Letter an Editor may not publish, but by getting a response from the media creators and purveyors. Where fans will take and make something their own, and a media company can be created from a search algorithm.
The mindset and skills of today require a type of openness to innovation and audience participation (and I even recoil a bit at that phrase, because it’s almost as if there is no longer an audience that’s separate from the producers) that’s quite alien to many folks who’ve made media for decades. When the economy gets better, that will help us see how fundamental the shift has been.
Showing posts with label alwayson. Show all posts
Showing posts with label alwayson. Show all posts
Cell Phone Networks Take Another Hit
In this age of open, digital and shared media, those who opt for control -- especially if that control gives them what’s deemed an unfair share -- will be attacked from many sides. Witness the music industry’s overpriced CDs of albums they’d already sold in vinyl. (And compare it to the success of iTunes, which has been attacked for being controlled, but has also relented and removed DRM and also is now playing with pricing.)
Today, many companies are developing -- and consumers are loving -- options to go “off-deck” and circumvent cellphone carriers, either by installing applications on their phones or by accessing the mobile Web. The cellphone carrier networks, the Sprints, AT&Ts and Verizons of the world, are demanding what one wag here at the AlwaysOn conference called a “rapacious” share of anything that runs through their system. Not only do subscribers, locked into costly contracts, have to pay for every new piece of service, and difficult-to-understand fees, but the carriers also demand that anyone who wants to provide a service to their subscribers -- anything from weather to movie listings to paid video -- give the cellphone carriers a share that can be as much as 70 percent. Plus the fees are often dictated by the carriers. These moneys were easily demanded in a day when the only way to reach cellphone subscribers was through the network, and the interface on the phones that the carriers controlled. The carriers also controlled the information about the use of the networks; some would say that they are protecting their users’ privacy. Fair enough.
But with the mobile Web, and applications for smartphones like the iPhone and Google’s Android system, it’s becoming easier and easier for content companies and their consumers to circumvent the network. Medialets chairman and CEO Eric Litman told me today about how his company is embedding code in Apple’s iPhone apps that allow his firm to measure all kinds of data on the phones’ usage, a lot of typical Web measurements, for example, like pageviews, unique visits, time on site and so on. The trick, he said, was that the Apple folks had not demanded anything from the code, and had struck a deal with AT&T that required the carrier to let apps through unblocked. The book “Planet Google” by New York Times columnist Randall Stross points out how Verizon kind of sort of bent to Google, which was bidding on new cellphone spectrum, demanding that cellphones be allowed to work on any network instead of being locked. (It’s not clear Verizon fully kept its promise to do so, Sross says, but that’s another story). At a panel I appeared on with partners Scribe Media last fall at Streaming Media West, the argument was over whether subscription video on cellphones could survive when people could go get what they wanted for free.
In another panel, on what business can learn from Obama’s use of social media, Larry Weber of Racepoint Group, Digital Influence Group, said media companies were structured so much like mafiosi that their hold was “hard to break.” But, he said, the era of unpaid media was coming. Don’t know if I agree with the characterization. But it is hard to see how business models based on control -- rather than enticement and service -- will win.
Today, many companies are developing -- and consumers are loving -- options to go “off-deck” and circumvent cellphone carriers, either by installing applications on their phones or by accessing the mobile Web. The cellphone carrier networks, the Sprints, AT&Ts and Verizons of the world, are demanding what one wag here at the AlwaysOn conference called a “rapacious” share of anything that runs through their system. Not only do subscribers, locked into costly contracts, have to pay for every new piece of service, and difficult-to-understand fees, but the carriers also demand that anyone who wants to provide a service to their subscribers -- anything from weather to movie listings to paid video -- give the cellphone carriers a share that can be as much as 70 percent. Plus the fees are often dictated by the carriers. These moneys were easily demanded in a day when the only way to reach cellphone subscribers was through the network, and the interface on the phones that the carriers controlled. The carriers also controlled the information about the use of the networks; some would say that they are protecting their users’ privacy. Fair enough.
But with the mobile Web, and applications for smartphones like the iPhone and Google’s Android system, it’s becoming easier and easier for content companies and their consumers to circumvent the network. Medialets chairman and CEO Eric Litman told me today about how his company is embedding code in Apple’s iPhone apps that allow his firm to measure all kinds of data on the phones’ usage, a lot of typical Web measurements, for example, like pageviews, unique visits, time on site and so on. The trick, he said, was that the Apple folks had not demanded anything from the code, and had struck a deal with AT&T that required the carrier to let apps through unblocked. The book “Planet Google” by New York Times columnist Randall Stross points out how Verizon kind of sort of bent to Google, which was bidding on new cellphone spectrum, demanding that cellphones be allowed to work on any network instead of being locked. (It’s not clear Verizon fully kept its promise to do so, Sross says, but that’s another story). At a panel I appeared on with partners Scribe Media last fall at Streaming Media West, the argument was over whether subscription video on cellphones could survive when people could go get what they wanted for free.
In another panel, on what business can learn from Obama’s use of social media, Larry Weber of Racepoint Group, Digital Influence Group, said media companies were structured so much like mafiosi that their hold was “hard to break.” But, he said, the era of unpaid media was coming. Don’t know if I agree with the characterization. But it is hard to see how business models based on control -- rather than enticement and service -- will win.
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