Monthly Archives: August 2010

Big Old Media for Hire / New Life from Apparent Death

I’ve had more than one person re-tweet or comment on posts of mine saying how “big” or “old” media don’t “get it”.  To be clear, that is not my intent.  My goal is to not be seen as from some sort of “new” school of media anymore than it is to be viewed as from an “old” one.

 

Though I am fascinated with, not to mention pretty much vested in, the media business and have plenty of thoughts and opinions on the matter that I’ve shared and will continue to share freely, I am more fascinated with why people do the things they do with the hardware and software that makes up their experiences with media – which ultimately drives the media business.

 

Perhaps this fascination with why people do the things they do with media is the “it” the “big”, “old” media companies don’t “get” in their pursuit of profits.   Fully respecting they are indeed in business to turn a profit, said profit cannot be turned without understanding that the dynamics of why and how people use media has changed.

 

In his book Cognitive Surplus, Clay Shirky puts it thusly:
 
“But what if all this time, providing professional content isn’t the only job we’ve been hiring media to do?  What if we’ve also been hiring it to make us feel connected, engaged, or just less lonely?  What if we’ve always wanted to produce as well as consume, but no one offered us that opportunity?”

 

I felt this confluence of what people hire media to do vs. what media companies’ need to do to turn a profit come to life as I read the cover story from Wired, The Web is Dead, a well done chicken-and-egg, point-counterpoint on the shift from web usage to Internet-driven app usage (Yes, Virginia, they're really is a difference between the web and the Internet). 

 

My abridged version:

·         The benefit of the shift to Internet-driven apps for people is they can easily get what they want, when they want it, and it works better and faster than a web-based experience.  People save time two ways – by not having to look as hard for what they want and apps tend to perform better/faster than the web.

·         The benefit to media companies is these are semi-walled or entirely walled experiences they can fully control for which they can charge – either directly for the app or using the app as a gateway to charging for something that the app links to. 

·         And due to the aforementioned benefits of time savings and better experience, people are OK paying for it.

 

One thing “big”, “old” media does “get” is producing content or experiences that are contained and they have full control over (see TV programs, magazines, newspapers, etc).  And now they can allow people to build upon and share this content and/or experience via the Internet thru connections to other apps for social networks – or maybe even on the web (though it is apparently on its last legs – hold that thought).  Thus, the value – both in terms of the value people perceive from being able to do what they want with the content as well as the potentially claimed media value from more impressions – increases for everyone involved in this foodchain.

 
Ultimately, people feel they get an honest day’s work from the media they hired, proving yet again that people are willing to part with money if it means they save time, especially if they are able to save time in two ways. 

 

Ta da.  “Big”, “old” media gets “it”.

 

But I do believe the “death” of the web is greatly over exaggerated – obviously in order to sell magazines (oh, those “big”, “old” media and their marketing tactics).  In spite of the bleakness of the cover, Chris Anderson – editor in chief of Wired and the man who literally wrote the book on Free – does come around as he closes:

 

“…the great virtue of today’s Web is that so much of it is noncommercial.  The wide-open Web of peer production, the so-called generative Web where everyone is free to create what they want, continues to thrive, driven by the nonmonetary incentives of expression, attention, reputation and the like.” 

 

This makes me think of the web as a big, old R&D sandbox for figuring out the next great app – dare I say “killer” app that could deliver a monetary incentive.  And maybe now we can stop having to hear “big”, “old” media lament the “pennies” they make on the web compared to the “dollars” of profit from their “old” media outlets.

 
I think what this begs for from those of us in the business is to move from a commitment to be, as a colleague of mine recently pointed out, “media neutral” to “media positive”, or, as I countered to my colleague, from “media agnostic” to “media religious”.  As “big”, “old” media finds opportunity for profit in “new” places, we have to commit ourselves to finding relevant opportunity for people to hire the media we plan, buy and/or create, be it “old” or “new”, “digital” or “analog”. 

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The World as It Goes

And in other Google/Verizon news, perhaps there is an upside to the apparent shift in philosophy on net neutrality by the do-no-evil-ers.  TechCrunch sites some pretty obvious indications that the initial Chrome OS machines will most likely come to us via Verizon.  

TC ends the piece by saying, "But imagine if Verizon offered Chrome OS netbooks at a subsidized price if you bought a Verizon data plan.  That could certainly be a hot-seller.  I'd buy one in a second."  

Yes, I would, too.  My desire for gadgetry not powered by MS or Apple would allow me to get over my somewhat high-mindedness as it pertains to the company's apparent partnership in developing a toll system on the Internet for high rollers.

In my defense, I fall back on Voltaire (who doesn't?).  

In The World as It Goes, the genie Ithuriel asks Babouc to make an accounting of Persepolis as a decision needs to be made by the genii whether or not to destroy the city.  After an in depth visit to the city where Babouc gets to see everything from how and why they make war to the poorest sectors of the city to the ways and motives of the artisans, government and landed gentry.  Though initially frustrated by the dichotomies in goodness and badness, he begins to realize that this combination of "stuff" (my word, not Voltaire's) is what makes the society beautiful.  

Babouc has a statue made of a variety of materials, from the most base to the most valuable and beautiful, and presents it to Ithuriel, saying, "Wilt thou break this pretty statue because it is not wholly composed of gold and diamonds?"  

Ithuriel understand his meaning decides to not destroy Persepolis, instead leaving the world as it goes saying, "For if all is not well, all is passable."

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As the Neutrality Turns

Surely that bastion of idealism and community, the Internet, is not subject to such wrangling between creators of content and providers of access to content as the soap opera of the old-fashioned cable TV industry.  Surely a company committed to “organize the world’s information and making it universally accessible and useful” and another who seeks no prejudice to “Rule the Air” wouldn’t be talking behind closed doors about a deal to carry certain websites and their content faster and at a better quality than others.
Well, if you’ve been paying attention to the (most recent and continuing) flap over net neutrality, you’ll see that’s not the case.  (Time Warner Cable subscribers who are Getting Tough and Not Rolling Over and are fed up w/ being “taxed to subsidize free web video” usage, please don’t follow that link – use this one that takes you to some nice, light text).
A recent piece in a WSJ blog puts it nicely:
“Net neutrality was always a contentious issue, and, idealism aside, there were straightforward economic issues at work.  For media companies, it was about getting access to telco networks at a rate that was advantageous to them.  The aim for the telecom companies remains to extract as much return from the network as it can get away with, without upsetting regulators and customers.  And one of its ways of fighting its corner is to not build infrastructure if it thinks it will be given away cheaply to others.”
Interestingly enough, large content providers and ecommerce sites are actually willing to pay higher fees to network operators to ensure higher quality experiences for its users.  Amazon’s VP of Global Policy, Paul Misener, recently made the argument that improving the quality of delivery of certain websites willing to pay to have improved quality without degrading the quality of delivery of other sites is a win-win-win for Internet users, network operators and content providers.  He said it was no different than a website that is now able to pay to have their site hosted or cached at multiple places across the country to ensure better performance regardless of geography.
Perhaps that would be making the best of the situation as it is.  But maybe this is all a bit alarmist at this point, the solution looking for a problem, and maybe the continual buzz about the potential for regulation will be enough to ensure their won’t be any. But knowing that this is a relatively straightforward economic issue, where do you think network providers would spend their time – on the base, “non-degraded” network available to all, or with the paying customers who have the money to spend on ensuring their sites perform at a higher level than the base?
More importantly, what does this mean for consumer options?  What would be the incentive for people to innovate on web-based platforms, to develop Mom-and-Pop storefronts if you will, if the stuff they’re creating won’t perform at a level seen as sufficient compared to the proverbial Big Boxes with the deep pockets?  Who will be the next Jeff Bezos if the network operators are spending most of their time making sure the current Jeff Bezos is happy with the performance of his site on their network?

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Getting tough at hanging onto things that should be rolled over

I’ve spent the past few years living in a Comcast cable market.  Coming back to Austin, TX meant coming back to Time Warner Cable, so I’ve only recently been exposed to rolloverorgettough.com.  This is TWC’s promise to fight hard for their subscribers in negotiating with those mean, old broadcast TV stations and cable networks.
I especially liked the following paragraph from the “How TV Works” section of the site:

“In addition, the growth of the Internet has brought countless new video options into consumers’ homes through services like Hulu, NetFlix, Amazon, and the programmers’ own websites. Right now, the broadcast TV networks generally offer that programming free over the Internet — and free over the air to any household with an antenna — but believe that customers who receive the exact same programming from their cable, satellite, or telephone company should pay a fee for it. That’s like putting a tax on the customers who get it from cable, in order to subsidize the viewers who get it for free online or over the air. We just don’t think that’s fair.” (TWC’s emphasis)

Checking my bill, it seems I’m paying my protector, Time Warner Cable, to get access to the Internet as well as cable TV.  So, I’m paying to get cable from TWC to subsidize the Internet that I’m also paying TWC for?  I’m a bit confused on what, exactly, is free here.
As it pertains to broadcast and cable networks feeling like people should pay a fee to get programming over TV but not over the Internet, is TWC saying they’d like to go to the model currently used on TV where those broadcast and cable networks charge TWC (and other cable, satellite and telcos) for the right to carry their programming – carriage fees, that 40% of their costs in the TV world?  I’m sure the broadcast and cable networks would be happy to have that discussion…
(Actually, they’d probably like to flip the model and have these “network hogs” – i.e. video providers on the Internet – pay extra to ensure better experiences – more on network neutrality soon, stay tuned.)
I’d posted over a year and a half ago on the issue that was brewing at that time between TWC and Viacom as it related to carriage fees and the “not fair”-ness TWC was claiming over video content Viacom was providing for “free” online.  There have been more than a few subsequent issues between cable companies and media companies since then, but the song remains the same.  Here was my summation then that still seems to be the case now:

“New distribution of programming doesn’t run so well under old monetization systems. In the process of improving the infrastructure of media delivery, access providers and media companies did a short-sighted job of determining the value of the shifts in media usage that they caused by improving the infrastructure. They never developed a model that appropriately valued media usage that is more driven by people’s schedules of desired use via two way cables than their schedules of distribution through one way cables.

So they are left to squabble over which antiquated levers and buttons they can pull and push to make a buck, ultimately, at the expense – in terms of money and, perhaps more importantly, time and convenience – of their most valuable assets: people who pay for access and are fans of programming (not pipes).

Kinda makes all the talk of “if the content is good, people will come” irrelevant, really. If the content is good and people come and no one makes sufficient money to produce more good content it really doesn’t matter.”


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