The proposed international treaty on the protection of broadcasters is inching forward after nearly 10 years of consideration and member states of the World Intellectual Property Organization and other stakeholders are moving toward consensus on the central elements of what it is to do and what is the object of the protection.
Much of the rhetoric of stakeholders—particularly pay TV channels and sports rights organisations—has led many to believe it is about protecting their business models and revenue. They have done the proposed treaty a disservice.
It is about protecting the value creating activities of broadcasters in content selection, packaging and distribution—something that is not protected by copyrights, but can be protected with a neighboring right. What the treaty is intent on doing is protecting the broadcast—in a signal and derivative of the signal—which embodies the broadcasters value creation activities and is the object of the proposed protection.
The result may assist revenue generation and strengthen the business model of rights holders, licensers, and broadcasters, but it does not directly protect those.
What it will do is provide a streamlined mechanism for broadcasters to enforce their rights internationally when unauthorised reception, decryption, and retransmission and rebroadcast of their signals are done by other broadcasters and cablecasters. Such practices regularly occur in some countries and sometimes involve the second broadcaster substituting their own advertising and charging fees to obtain the broadcast.
The treaty essentially gives broadcasters the right to license other uses of their broadcasts and halt uses they have not licensed, but does not give them rights to the content in the broadcasts that they do not own.
The proposed treaty includes some protection of public interests, by permitting national limitations and exceptions for clearly public purposes such as education, service to visually or hearing impaired persons, etc.
Some scepticism about the proposals exists in developing nations, because most of the benefits will occur to broadcasters in high income and upper middle income nations and only limited benefits will occur in other states.
The thorns on the rose bush, however, involve the fact that many of the nations where egregious reuses of broadcasts have occurred have never well enforced copyright, so one must be highly optimistic to believe that passage of the treaty will solve the problem.
Showing posts with label broadcast media. Show all posts
Showing posts with label broadcast media. Show all posts
Friday, April 15, 2011
Sunday, January 30, 2011
New Community Radio Opportunities to Increase Provision of Local Services and Information
Community radio in the U.S. received a large boost in January when President Obama signed a billed that will permit establishment of an estimated 800 to 1200 new local community radio stations
About 800 of the non-commercial community stations are already operating and providing music, health, education, and local information, news, and sports. The stations are run by community organizations, churches, and other civic groups, typically staffed by volunteers, and dependent upon donations from organizations and listeners.
Community radio operations tend to provide information about community and civic organizations that are overlooked by commercial broadcasting, focus on social issues in communities, and provide services to minority, ethic and immigrant groups. Programming on community radio is distinctively different from commercial radio and tends to be more local than, and providing alternative content to, that of public radio stations.
The stations operate on low power, making them useful for servicing small towns, counties, metropolitan suburbs and neighborhoods.
The expansion of spectrum devoted to community radio had been sought for several decades and the Local Community Radio Act signed by the president directs the Federal Communications Commission to make provision for the additional services. Some disputes with commercial channels over spectrum are expected in large metropolitan areas during that process.
About 800 of the non-commercial community stations are already operating and providing music, health, education, and local information, news, and sports. The stations are run by community organizations, churches, and other civic groups, typically staffed by volunteers, and dependent upon donations from organizations and listeners.
Community radio operations tend to provide information about community and civic organizations that are overlooked by commercial broadcasting, focus on social issues in communities, and provide services to minority, ethic and immigrant groups. Programming on community radio is distinctively different from commercial radio and tends to be more local than, and providing alternative content to, that of public radio stations.
The stations operate on low power, making them useful for servicing small towns, counties, metropolitan suburbs and neighborhoods.
The expansion of spectrum devoted to community radio had been sought for several decades and the Local Community Radio Act signed by the president directs the Federal Communications Commission to make provision for the additional services. Some disputes with commercial channels over spectrum are expected in large metropolitan areas during that process.
Wednesday, July 7, 2010
Competitive Struggles Among Television Platforms
Since the emergence of cable and satellite television services there has been struggles among platforms to increase their attractiveness to audiences and to draw market share from terrestrial television in developed nations. These struggles have had affected content producers, broadcasters, platform operators and regulators attempting to fashion socially optimal broadcasting systems.
In the first competitive struggles between terrestrial broadcasters and cable operators, broadcasters controlled the highest quality contemporary programming and cable operators primarily competed by offering a wider variety of channels and providing premium movie channels. In many locations broadcasters actively sought regulatory policies to keep their channels from appearing on cable in order to reduce its attractiveness as a competitor.
As cable matured and satellite services emerged, the nature of the struggle shifted as greater subscription and advertising revenues allowed cable networks to offer higher quality contemporary programming. In this competitive phase, terrestrial, cable and satellite operators began struggling for exclusivity of content that would drive audiences to the platforms. Gaining exclusive rights to first broadcast runs of motion pictures, sporting, musical and other events, and high quality original programs became primary goals. In this environment, producers of content and owners of event rights sought to maximize their returns across the platforms. while platform operators sought to maximize their returns by gaining market power through exclusivity. This led to negotiations based not only on transmission rights but exclusivity rights as well, which dramatically pushed up costs of some content—especially sports rights.
As cable garnered a larger audience share, broadcasters that had previously been opposed to carriage of terrestrial signals on cable because asking regulators for ‘must carry’ rules to require cable operators to carry terrestrial channels so they could have additional access to audiences or audiences in places their terrestrial signals had not previously reached. This was especially useful for advertising supported channels, both public service and commercial.
In recent years, the widespread success of cable and satellite platforms and the shift of wealth from terrestrial to other platforms has led broadcasters to demand payments from cable and satellite platform operators for carrying their channels. The newer platforms are resistent and in some nations the struggle over payments remains on-going.
The digitalisation of terrestrial, cable, satellite, and broadband platforms has now created multiple opportunities of distribution of audiovisual materials and is creating a new environment in which additional competitive struggles are taking place among platform operators. At stake are the significant potential gains from advanced paid video-on-demand services and IPTV. Platform operators—DTT, cable, satellite, and telecommunications firms that offer broadband services—are now struggling to ensure that they are not competitively disadvantaged compared to other operators. Operators that control or have high market power over platforms, especially broadband links and systems needed for advanced services or interactive DTT services, will have significant advantages in the next generation of services. Consequently, there is a great deal of effort on the part of major platform operators to acquire access to all platforms and services through ownership, alliances and joint ventures and in many cases there are outright efforts to control those platforms and servcies.
The trajectory and outcome of this competitive struggle is particularly important because it will have significant impact on the range of services and costs for services available to the public. These developments also have significant importance for the relationship between content producers and platform operators because the means of compensation is likely to evolve from current transmission rights and exclusivity rights payments to one involving revenue and profit sharing. This has significant implications to the funding and ways that contemporary terrestrial television programming is created and role of terrestrial broadcasters in the new environment.
In the first competitive struggles between terrestrial broadcasters and cable operators, broadcasters controlled the highest quality contemporary programming and cable operators primarily competed by offering a wider variety of channels and providing premium movie channels. In many locations broadcasters actively sought regulatory policies to keep their channels from appearing on cable in order to reduce its attractiveness as a competitor.
As cable matured and satellite services emerged, the nature of the struggle shifted as greater subscription and advertising revenues allowed cable networks to offer higher quality contemporary programming. In this competitive phase, terrestrial, cable and satellite operators began struggling for exclusivity of content that would drive audiences to the platforms. Gaining exclusive rights to first broadcast runs of motion pictures, sporting, musical and other events, and high quality original programs became primary goals. In this environment, producers of content and owners of event rights sought to maximize their returns across the platforms. while platform operators sought to maximize their returns by gaining market power through exclusivity. This led to negotiations based not only on transmission rights but exclusivity rights as well, which dramatically pushed up costs of some content—especially sports rights.
As cable garnered a larger audience share, broadcasters that had previously been opposed to carriage of terrestrial signals on cable because asking regulators for ‘must carry’ rules to require cable operators to carry terrestrial channels so they could have additional access to audiences or audiences in places their terrestrial signals had not previously reached. This was especially useful for advertising supported channels, both public service and commercial.
In recent years, the widespread success of cable and satellite platforms and the shift of wealth from terrestrial to other platforms has led broadcasters to demand payments from cable and satellite platform operators for carrying their channels. The newer platforms are resistent and in some nations the struggle over payments remains on-going.
The digitalisation of terrestrial, cable, satellite, and broadband platforms has now created multiple opportunities of distribution of audiovisual materials and is creating a new environment in which additional competitive struggles are taking place among platform operators. At stake are the significant potential gains from advanced paid video-on-demand services and IPTV. Platform operators—DTT, cable, satellite, and telecommunications firms that offer broadband services—are now struggling to ensure that they are not competitively disadvantaged compared to other operators. Operators that control or have high market power over platforms, especially broadband links and systems needed for advanced services or interactive DTT services, will have significant advantages in the next generation of services. Consequently, there is a great deal of effort on the part of major platform operators to acquire access to all platforms and services through ownership, alliances and joint ventures and in many cases there are outright efforts to control those platforms and servcies.
The trajectory and outcome of this competitive struggle is particularly important because it will have significant impact on the range of services and costs for services available to the public. These developments also have significant importance for the relationship between content producers and platform operators because the means of compensation is likely to evolve from current transmission rights and exclusivity rights payments to one involving revenue and profit sharing. This has significant implications to the funding and ways that contemporary terrestrial television programming is created and role of terrestrial broadcasters in the new environment.
Monday, April 19, 2010
SEARCH FOR ALTERNATIVE MEDIA BUSINESS MODELS HAMPERED BY NARROW THINKING
Media executives around the globe are clamoring for new and alternative business models and industry associations everywhere are holding seminars and conferences on how to create and discover them. There is just one problem: They don’t know what business models are.
When you cut through the rhetoric, you find that most executives are merely interested in finding new revenue streams. Even when you consider firms touted as having best practices in that regard, none have been very successful in establishing them. The reason is simple: The dominant thought about business models is highly limited and far too narrow to solve the contemporary challenges of media industries.
Business models are not merely about the revenue streams. Instead, they establish the underlying business logic and elements. They involve the foundations upon which businesses built, such as companies’ competences, value created, products/services provided, customers served, relationships established with customers and partner firms, and the operational requirements. If you get those elements right, the revenue issues take care of themselves.
The biggest problem of media business models today is not that the revenue model is diminishing in effectiveness, but that most media companies are still trying to sell nineteenth and twentieth century products in the twenty-first century. And they are trying to do so without changing the value they provide and the relationships within which they are provided.
Because of the enormous changes in technology, economics, and lifestyle in recent decades, the needs of customers have changed, they kinds of content they want, and the ways they obtain news, information, and entertainment have been dramatically altered. If media firms do not address these changes in consumer needs and behavior, no amount of worry about revenue streams will stem the fundamental challenge that audiences are leaving traditional print and broadcast media behind for content providers and distribution platforms that better serve their needs.
The content of traditional media products were created in specific technical, economic, and information environments that no longer exist. In order to evolve and prosper media companies must revisit the foundations of their businesses, ensure they are providing the central value that customers want, and provide their products/services in a unique or different way from other media firms.
The range of technologies and distribution and interactive platforms available in the twenty-first century require that firms increasingly see their business activities as cooperative processes requiring coordination and interdependence with external firms and customers themselves. Standing isolated and alone—at arms distance from the customer—is no longer a viable option.
This is not to say that firms must make sudden and dramatic changes in their business models, but they must start revisiting all the aspects to make regular incremental improvements and changes. Questions need to be asked about what is provided, why it is provided, how it is provided, and the entire structures and operations of firms. These need to be addressed first, then the revenue models can be sorted out and improved.
When you cut through the rhetoric, you find that most executives are merely interested in finding new revenue streams. Even when you consider firms touted as having best practices in that regard, none have been very successful in establishing them. The reason is simple: The dominant thought about business models is highly limited and far too narrow to solve the contemporary challenges of media industries.
Business models are not merely about the revenue streams. Instead, they establish the underlying business logic and elements. They involve the foundations upon which businesses built, such as companies’ competences, value created, products/services provided, customers served, relationships established with customers and partner firms, and the operational requirements. If you get those elements right, the revenue issues take care of themselves.
The biggest problem of media business models today is not that the revenue model is diminishing in effectiveness, but that most media companies are still trying to sell nineteenth and twentieth century products in the twenty-first century. And they are trying to do so without changing the value they provide and the relationships within which they are provided.
Because of the enormous changes in technology, economics, and lifestyle in recent decades, the needs of customers have changed, they kinds of content they want, and the ways they obtain news, information, and entertainment have been dramatically altered. If media firms do not address these changes in consumer needs and behavior, no amount of worry about revenue streams will stem the fundamental challenge that audiences are leaving traditional print and broadcast media behind for content providers and distribution platforms that better serve their needs.
The content of traditional media products were created in specific technical, economic, and information environments that no longer exist. In order to evolve and prosper media companies must revisit the foundations of their businesses, ensure they are providing the central value that customers want, and provide their products/services in a unique or different way from other media firms.
The range of technologies and distribution and interactive platforms available in the twenty-first century require that firms increasingly see their business activities as cooperative processes requiring coordination and interdependence with external firms and customers themselves. Standing isolated and alone—at arms distance from the customer—is no longer a viable option.
This is not to say that firms must make sudden and dramatic changes in their business models, but they must start revisiting all the aspects to make regular incremental improvements and changes. Questions need to be asked about what is provided, why it is provided, how it is provided, and the entire structures and operations of firms. These need to be addressed first, then the revenue models can be sorted out and improved.
Monday, December 21, 2009
MEDIA, INNOVATION, AND THE STATE
There is a growing chorus for governments to help established media transform themselves in the digital age. From the U.S. to the Netherlands, from the U.K. to France, governments are being asked to help both print and broadcast media innovate their products and services to help make them sustainable.
State support for innovation is not a new concept. Support of cooperate research initiatives involving the state, higher education institutions, and industries has been part of national science and industrial policies for many decades. There has been significant state support for innovation of agriculture/food products, electronics, advanced military equipment, information technology, and biomedical technology and products.
State support tends to work best in developing new technologies and industries and tends to focus support on advanced basic scholarly research through science and research funding organizations, creation and support for research parks and industrial development zones for applied research, and incentives and subsidies for commercial research and development.
Many governments also support efforts to transform established industries. These are typically designed to promote productivity and competitiveness as a means of preserving employment and the tax base. In the past there has been some support for technology transfer from electronics and information technology to existing industries and for retraining, facilities reconstruction, and entering new markets.
Trying to apply those kinds of research and transformation policies in media is challenging, however, because much of media activities tend to be non-industrial and are dependent on relatively rigid organizational structures and processes that are difficult to change. These factors are complicated by the facts that media engage in negligible research and development activities, have limited experience with product change and new product development, and tend to have limited links to higher education institutions.
It is clear that a growing number of managers in media industries understand the need for innovation because of the declining sustainability of current operations and because Internet, mobile, e-reader, and on-demand technologies are providing new opportunities. The real innovation challenges in established media, however, are not perceiving the need for change or being able to get needed technology, but organizational structures, processes, culture, and ways of thinking that limit willingness and ability to innovate. This is compounded because many managers are confused by the opportunities and don’t know what to do or how pursue innovation.
Today, the innovation challenge facing media—especially newspapers--is not mere modernization, but fundamentally reestablishing their media functions and forms. What is needed is a complete rethinking of what content is offered, where, when and how it is provided, what new products and services should be provided and what existing ones dropped, how content will differ and be superior to that of other providers, how to establish new and better relationships with consumers, how the activities are organized and what processes will be employed, what relationships need to be established with partners and intermediaries, and ultimately how the activities are funded.
The state’s ability to influence media innovation of this type is highly constrained. Governments worldwide have proven themselves ineffectual in running business enterprises and they have limited abilities to affect organizational structures, processes, culture, and thinking in existing firms. What governments can do, however, is to fund research that identifies threats, opportunities and best practices, provide education and training to promote innovation and help implement change, offer incentives or subsidies to cover transformation costs and support new initiatives, and help coordinate activities across industries.
These kinds of support will be helpful, but they will not be a panacea because the greatest impetus for and implementation of change and innovation must come from within companies. The support will only be helpful if companies are actually willing to innovate and change to support that innovation. The extent they are willing to do so remains to be seen.
State support for innovation is not a new concept. Support of cooperate research initiatives involving the state, higher education institutions, and industries has been part of national science and industrial policies for many decades. There has been significant state support for innovation of agriculture/food products, electronics, advanced military equipment, information technology, and biomedical technology and products.
State support tends to work best in developing new technologies and industries and tends to focus support on advanced basic scholarly research through science and research funding organizations, creation and support for research parks and industrial development zones for applied research, and incentives and subsidies for commercial research and development.
Many governments also support efforts to transform established industries. These are typically designed to promote productivity and competitiveness as a means of preserving employment and the tax base. In the past there has been some support for technology transfer from electronics and information technology to existing industries and for retraining, facilities reconstruction, and entering new markets.
Trying to apply those kinds of research and transformation policies in media is challenging, however, because much of media activities tend to be non-industrial and are dependent on relatively rigid organizational structures and processes that are difficult to change. These factors are complicated by the facts that media engage in negligible research and development activities, have limited experience with product change and new product development, and tend to have limited links to higher education institutions.
It is clear that a growing number of managers in media industries understand the need for innovation because of the declining sustainability of current operations and because Internet, mobile, e-reader, and on-demand technologies are providing new opportunities. The real innovation challenges in established media, however, are not perceiving the need for change or being able to get needed technology, but organizational structures, processes, culture, and ways of thinking that limit willingness and ability to innovate. This is compounded because many managers are confused by the opportunities and don’t know what to do or how pursue innovation.
Today, the innovation challenge facing media—especially newspapers--is not mere modernization, but fundamentally reestablishing their media functions and forms. What is needed is a complete rethinking of what content is offered, where, when and how it is provided, what new products and services should be provided and what existing ones dropped, how content will differ and be superior to that of other providers, how to establish new and better relationships with consumers, how the activities are organized and what processes will be employed, what relationships need to be established with partners and intermediaries, and ultimately how the activities are funded.
The state’s ability to influence media innovation of this type is highly constrained. Governments worldwide have proven themselves ineffectual in running business enterprises and they have limited abilities to affect organizational structures, processes, culture, and thinking in existing firms. What governments can do, however, is to fund research that identifies threats, opportunities and best practices, provide education and training to promote innovation and help implement change, offer incentives or subsidies to cover transformation costs and support new initiatives, and help coordinate activities across industries.
These kinds of support will be helpful, but they will not be a panacea because the greatest impetus for and implementation of change and innovation must come from within companies. The support will only be helpful if companies are actually willing to innovate and change to support that innovation. The extent they are willing to do so remains to be seen.
Wednesday, September 2, 2009
RADIO STATIONS FACE SIGNIFICANT STRATEGIC CHALLENGES
Fundamental market changes are pushing radio stations towards an uncertain future and managers and owners need to begin developing strategic responses to developments in their industry.
The challenges are being caused by declining demand for radio offerings due to lifestyle changes, the wide availability of substitutable audio platforms, and the primary content currently being offered. Audience behavior toward radio is changing and many U.S. stations now only make money for 4 to 6 hours each day. Overall, audiences are spending less time with radio and exhibiting less station loyalty than they did in the past, and young audiences are particularly difficult to attract and serve.
A major impetus of change is that audiences for music worldwide are progressively replacing radio listening with personalized playlists they have created on their computers, MP3 players, and mobile phones and by CDs on which they burned those favorites. They select music that suits their individual tastes and many have wider repositories of music in their own libraries than are offered on broadcaster playlists. Satellite and Internet radio are compounding the problem by offering hundreds of choices of highly focused music formats. These developments are increasingly making radio a less relevant platform for music entertainment delivery than it has been.
Concurrently, a wide variety of non-music programming is being offered by Satellite and Internet stations and audiences are increasingly using these services, as well as downloading podcasts on a variety of topics of individual interest from both broadcast and non-radio sources.
These problems are compounded in the U.S. because the rise of radio groups after deregulation in the mid 1990s led to national radio programmers making selections, reducing the range of genres of music and other content on radio stations. Overall, programming has become less local and less relevant as content decisions have been made elsewhere.
Advertisers sense the problem with audiences and the share of advertising expenditures going to radio is declining. Worldwide radio advertising expenditures are about 7 percent of total expenditures, down from a height of 9 percent in 1999. In the U.S. they peaked in 2002 at nearly 13 percent and are now down to about 10 percent. This downward trend is seen among most of the traditional leaders in radio advertising expenditures –Mexico, Japan, France, UK, Spain—and only in rapidly developing countries such as Brazil and China is the share spent on radio on a clear upward trajectory.
Another indicator of the problem is seen in the considerable weakening of sales prices for radio stations in recent years.
Radio station owners and managers need to start spending a good deal of time thinking about what is happening to their industry and how they will need to change their place in the media use mix. They need to seriously consider what business they are in and what unique value they produce so they can reposition their functions for audiences and advertisers.
The structure and offerings of the radio industry have been adjusted several times during its 9-decade history, but the last time the industry needed to recreate itself so dramatically occurred with the arrival of television. The arrival of television resulted in radio shifting from a general entertainment and information medium to a music entertainment platform in many nations. In the U.S., broadcasters on A.M. radio later shifted toward a talk and sports platform after F.M. developed and music migrated to that spectrum, creating new opportunities on both bands.
Repositioning radio again will not be a simple task, but it is one the industry needs to begin undertaking now. If radio managers do not start thinking ahead about the negative trends appearing in their industry, they will soon experience the alarm and fear that is pervasive in the newspaper industry. It is better for companies and industries to act before crises develop fully because they can respond to and help direct the course of change rather than merely experience its negative effects. Whether decisive action will emerge in the radio industry before we reach that point remains to be seen.
The challenges are being caused by declining demand for radio offerings due to lifestyle changes, the wide availability of substitutable audio platforms, and the primary content currently being offered. Audience behavior toward radio is changing and many U.S. stations now only make money for 4 to 6 hours each day. Overall, audiences are spending less time with radio and exhibiting less station loyalty than they did in the past, and young audiences are particularly difficult to attract and serve.
A major impetus of change is that audiences for music worldwide are progressively replacing radio listening with personalized playlists they have created on their computers, MP3 players, and mobile phones and by CDs on which they burned those favorites. They select music that suits their individual tastes and many have wider repositories of music in their own libraries than are offered on broadcaster playlists. Satellite and Internet radio are compounding the problem by offering hundreds of choices of highly focused music formats. These developments are increasingly making radio a less relevant platform for music entertainment delivery than it has been.
Concurrently, a wide variety of non-music programming is being offered by Satellite and Internet stations and audiences are increasingly using these services, as well as downloading podcasts on a variety of topics of individual interest from both broadcast and non-radio sources.
These problems are compounded in the U.S. because the rise of radio groups after deregulation in the mid 1990s led to national radio programmers making selections, reducing the range of genres of music and other content on radio stations. Overall, programming has become less local and less relevant as content decisions have been made elsewhere.
Advertisers sense the problem with audiences and the share of advertising expenditures going to radio is declining. Worldwide radio advertising expenditures are about 7 percent of total expenditures, down from a height of 9 percent in 1999. In the U.S. they peaked in 2002 at nearly 13 percent and are now down to about 10 percent. This downward trend is seen among most of the traditional leaders in radio advertising expenditures –Mexico, Japan, France, UK, Spain—and only in rapidly developing countries such as Brazil and China is the share spent on radio on a clear upward trajectory.
Another indicator of the problem is seen in the considerable weakening of sales prices for radio stations in recent years.
Radio station owners and managers need to start spending a good deal of time thinking about what is happening to their industry and how they will need to change their place in the media use mix. They need to seriously consider what business they are in and what unique value they produce so they can reposition their functions for audiences and advertisers.
The structure and offerings of the radio industry have been adjusted several times during its 9-decade history, but the last time the industry needed to recreate itself so dramatically occurred with the arrival of television. The arrival of television resulted in radio shifting from a general entertainment and information medium to a music entertainment platform in many nations. In the U.S., broadcasters on A.M. radio later shifted toward a talk and sports platform after F.M. developed and music migrated to that spectrum, creating new opportunities on both bands.
Repositioning radio again will not be a simple task, but it is one the industry needs to begin undertaking now. If radio managers do not start thinking ahead about the negative trends appearing in their industry, they will soon experience the alarm and fear that is pervasive in the newspaper industry. It is better for companies and industries to act before crises develop fully because they can respond to and help direct the course of change rather than merely experience its negative effects. Whether decisive action will emerge in the radio industry before we reach that point remains to be seen.
Thursday, June 4, 2009
THE END OF JOURNALISM?
The question of whether we are witnessing the end of journalism is perhaps the most common topic at contemporary gatherings of journalists and journalism scholars. Although hushed and apprehensive conversations about it have taken place in recent years, today’s discussions are open and filled with alarm and fear.
Many of the voices and opinions, however, misunderstand the nature of journalism. It is not business model; it is not a job; it is not a company; it is not an industry; it is not a form of media; it is not a distribution platform.
Instead, journalism is an activity. It is a body of practices by which information and knowledge is gathered, processed, and conveyed. The practices are influenced by the form of media and distribution platform, of course, as well as by financial arrangements that support the journalism. But one should not equate the two.
The pessimistic view of the future of journalism is based in a conceptualization of journalism as static, with enduring processes, unchanging practices, and permanent firms and distribution mechanisms. In reality, however, it has constantly evolved to fit the parameters and constraints of media, companies, and distribution platforms.
In its first centuries journalism was practiced by printers, part-time writers, political figures, and educated persons who acted as correspondents—not by professional journalists as we know them today. In the nineteenth century the pyramid form of journalism story construction developed so stories could be cut to meet telegraph limits and production personnel could easily cut the length of stories after reporters and editors left their newspaper buildings. Professionalism in the early 20th century emerged with the regularization of journalistic employment and professional journalistic best practices developed. The appearance of radio news brought with it new processes and practices, including “rip and read” from the news agencies teletypes and personal commentary. TV news brought a heavy reliance on short, visual news and 24hour cable channels created practices emphasizing flow-of-events news and heavy repetition.
Journalistic processes and practices have thus never remained fixed, but journalism has endured by changing to meet the requirements of the particular forms in which it has been conveyed and by adjusting to resources provided by the business arrangements surrounding them.
Journalism may not be what it was a decade ago—or in some earlier supposedly golden age—but that does not mean its demise is near. Companies and media may disappear or be replaced by others, but journalism will adapt and continue.
It will adapt not because it is wedded to a particular medium or because it provides employment and profits, but because its functions are significant for society. The question facing us today is not whether journalism is at its end, but what manifestation it will take next. The challenges facing us are to find mechanisms to finance journalistic activity and to support effective platforms and distribution mechanisms through which its information can be conveyed.
Many of the voices and opinions, however, misunderstand the nature of journalism. It is not business model; it is not a job; it is not a company; it is not an industry; it is not a form of media; it is not a distribution platform.
Instead, journalism is an activity. It is a body of practices by which information and knowledge is gathered, processed, and conveyed. The practices are influenced by the form of media and distribution platform, of course, as well as by financial arrangements that support the journalism. But one should not equate the two.
The pessimistic view of the future of journalism is based in a conceptualization of journalism as static, with enduring processes, unchanging practices, and permanent firms and distribution mechanisms. In reality, however, it has constantly evolved to fit the parameters and constraints of media, companies, and distribution platforms.
In its first centuries journalism was practiced by printers, part-time writers, political figures, and educated persons who acted as correspondents—not by professional journalists as we know them today. In the nineteenth century the pyramid form of journalism story construction developed so stories could be cut to meet telegraph limits and production personnel could easily cut the length of stories after reporters and editors left their newspaper buildings. Professionalism in the early 20th century emerged with the regularization of journalistic employment and professional journalistic best practices developed. The appearance of radio news brought with it new processes and practices, including “rip and read” from the news agencies teletypes and personal commentary. TV news brought a heavy reliance on short, visual news and 24hour cable channels created practices emphasizing flow-of-events news and heavy repetition.
Journalistic processes and practices have thus never remained fixed, but journalism has endured by changing to meet the requirements of the particular forms in which it has been conveyed and by adjusting to resources provided by the business arrangements surrounding them.
Journalism may not be what it was a decade ago—or in some earlier supposedly golden age—but that does not mean its demise is near. Companies and media may disappear or be replaced by others, but journalism will adapt and continue.
It will adapt not because it is wedded to a particular medium or because it provides employment and profits, but because its functions are significant for society. The question facing us today is not whether journalism is at its end, but what manifestation it will take next. The challenges facing us are to find mechanisms to finance journalistic activity and to support effective platforms and distribution mechanisms through which its information can be conveyed.
Sunday, October 26, 2008
THE CREDIT CRISIS, VOLATILE MARKETS, RECESSION AND MEDIA
The churning flood of economic developments and the desperate measures of governments to lay financial sandbags to control the torrent present not one, but three calamities for media managers. Those that escape one may well be swept away by another.
Most media can survive the collapse of credit markets because media firms have high cash flows are typically require less short term credit than manufacturing and retail firms. Because most can acquire their most important resources without accessing credit lines or issuing commercial paper, banks struggling to keep their heads above water are not a major short-term concern. However, those media firms with large debts due in the short-term that were hoping to refinance face significant hurdles. Some will be rapidly shedding media properties in order to stay afloat.
The more immediate problem for some publicly owned firms is the financial damage caused by the dramatic drop in share prices following the credit market collapse. Because a number of companies use debt financing linked to the value of their shares, the drop in prices makes their debt more risky and thus triggers automatic increases in interest rates and debt payments. This puts even more financial pressure on the firms and is sweeping them along with the flood.
Media firms that escaped the rising financial damage of the first two problems are nonetheless being sucked into the swirling waters of a recession. Because manufacturers are cutting production and laying off workers and because credit is tightening and making it harder for consumers to buy, advertising expenditures are eroding rapidly. Further, consumer spending and confidence are directly related to sales of media products so one can expect declines in sales of media hardware, recordings, books, and other products as well as consumers concentrate their expenditures on paying mortgages and other debt.
At the moment there is no means to effectively project how deep the recession will be, but whatever the depth it will be difficult for media. In the case of advertising, a 1 percent decline in GDP produces about a 3 to 5 percent decline in advertising. So a 3 percent decline could produce a 15 percent decline in income for many media firms. Print media tend to be most affected by recessions and their declines tend to be 3 to 4 times deeper than television because of differences in the types of advertising they carry.
Media companies that are financially strong will weather the financial storm, but those whose managers leveraged their companies to make acquisitions, those whose owners recently purchased the firms primarily using debt financing, and those that have been poorly managed will be struggling to survive. The current financial storm is a classic example for why conservative financial management of a media firm debt is crucial.
Most media can survive the collapse of credit markets because media firms have high cash flows are typically require less short term credit than manufacturing and retail firms. Because most can acquire their most important resources without accessing credit lines or issuing commercial paper, banks struggling to keep their heads above water are not a major short-term concern. However, those media firms with large debts due in the short-term that were hoping to refinance face significant hurdles. Some will be rapidly shedding media properties in order to stay afloat.
The more immediate problem for some publicly owned firms is the financial damage caused by the dramatic drop in share prices following the credit market collapse. Because a number of companies use debt financing linked to the value of their shares, the drop in prices makes their debt more risky and thus triggers automatic increases in interest rates and debt payments. This puts even more financial pressure on the firms and is sweeping them along with the flood.
Media firms that escaped the rising financial damage of the first two problems are nonetheless being sucked into the swirling waters of a recession. Because manufacturers are cutting production and laying off workers and because credit is tightening and making it harder for consumers to buy, advertising expenditures are eroding rapidly. Further, consumer spending and confidence are directly related to sales of media products so one can expect declines in sales of media hardware, recordings, books, and other products as well as consumers concentrate their expenditures on paying mortgages and other debt.
At the moment there is no means to effectively project how deep the recession will be, but whatever the depth it will be difficult for media. In the case of advertising, a 1 percent decline in GDP produces about a 3 to 5 percent decline in advertising. So a 3 percent decline could produce a 15 percent decline in income for many media firms. Print media tend to be most affected by recessions and their declines tend to be 3 to 4 times deeper than television because of differences in the types of advertising they carry.
Media companies that are financially strong will weather the financial storm, but those whose managers leveraged their companies to make acquisitions, those whose owners recently purchased the firms primarily using debt financing, and those that have been poorly managed will be struggling to survive. The current financial storm is a classic example for why conservative financial management of a media firm debt is crucial.
Tuesday, June 24, 2008
CHANGING FORMS AND FUNCTIONS OF NEWS MEDIA
Fundamental social and technological changes are altering the functions of news media for audiences and advertisers and significantly altering the situations of specific forms of news media.
Most of us recognize that form and function are linked together, with the form of objects influenced by their use, economics, and technology (Something architects and designers have recognized for more than a century). Contemporary technology has broken the connection between the traditional forms and functions of news providers and made it possible to serve the functions of legacy news organizations and news distribution in many different forms. This development is undermining the consumer and financial bases of long-established news media.
Because they have been in place for so many decades, it is easy to forget that established news media developed their forms within specific economic and technological environments. The form of newspapers and radio and television newscasts developed when new technologies allowed creations of mass audiences, distributed news to them at specific times, and supported the delivery of low priced and free news because advertisers of general consumer products paid to reach those audiences.
Today, the underlying elements of that business model, which was highly successful in the twentieth century, are decaying. Mass audiences are disappearing, technology is providing new ways to reach audiences, individuals are becoming active, integral participants in the communication process, and advertising are seeking more effective ways to reach potential customers.
These changes are significantly altering the functions previously played by metropolitan daily newspapers and network and local radio and television newscasts as primary creators and distributors of news and information. The dominance they once had has been replaced by ubiquitous distribution technologies that provide a continually updated stream of news through cable channels, Internet portals and news sites, social networking sites, mobile devices, and news screens on buildings and in public transportation.
It should be no surprise, then, that the form of legacy news provision is no longer as successful as it was in the past. Those who own and work for legacy organizations see the changes as cataclysmic, but the shifting of functions to more forms is natural and provides significant benefits to those who want news and information.
We have seen this type of displacement before, even within our lifetime. Life magazine, for example, played significant roles in conveying news and features on social life from the 1930s to the 1970s, but lost its functions with the arrival of new technology and changes in social life. As the foremost visual presenter of photojournalism, the magazine once garnered 13.5 million circulation, but changing media preferences for audiovisual materials on television news and magazine shows stripped Life of its audience and advertising.
Many functions of network television news, which grew rich in the 1960s and 1970s, were displaced in the 1970s and 1980s by local television newscasts that provided more hours of news and more opportunities for viewers to get international, national, and local news. That displacement was compounded by the development of 24-hour cable news channels.
Today, further displacement of the functions of network and local television news is taking place and the functions of metropolitan daily newspapers are being significantly affected. This does not the end of news provision, however. Although many journalists in the legacy media desperately assert that only the forms of news in the organizations that employ them can serve social needs and provide quality journalism, the reality is far different.
Reputable and well-trained journalists are now establishing new journalistic forms on the Internet, linking web and print operations, and syndicated materials produced by web-based news providers. There are more journalistic startups now than anyone can ever recall.
Although web-based news has historically be aggregated materials from traditional sources, these new enterprises—some commercial and some non-commercial—are increasingly providing original journalism. Some are concentration on serious investigative national and international reporting; some are providing hyper-local coverage; and some are providing coverage of specialized topics. These serve some functions previously provided by legacy media and some functions legacy media ignored.
The technologies are also allowing engaged citizens to create and distribute news and information on their own, supplementing material produced by professional journalists or providing material in its absence.
These are healthy developments for journalism and for those who want news and information. Although the form of provision is changing, the functions of gathering and conveying news and information and the functions of keeping people informed and engaged are continuing and being improved.
Most of us recognize that form and function are linked together, with the form of objects influenced by their use, economics, and technology (Something architects and designers have recognized for more than a century). Contemporary technology has broken the connection between the traditional forms and functions of news providers and made it possible to serve the functions of legacy news organizations and news distribution in many different forms. This development is undermining the consumer and financial bases of long-established news media.
Because they have been in place for so many decades, it is easy to forget that established news media developed their forms within specific economic and technological environments. The form of newspapers and radio and television newscasts developed when new technologies allowed creations of mass audiences, distributed news to them at specific times, and supported the delivery of low priced and free news because advertisers of general consumer products paid to reach those audiences.
Today, the underlying elements of that business model, which was highly successful in the twentieth century, are decaying. Mass audiences are disappearing, technology is providing new ways to reach audiences, individuals are becoming active, integral participants in the communication process, and advertising are seeking more effective ways to reach potential customers.
These changes are significantly altering the functions previously played by metropolitan daily newspapers and network and local radio and television newscasts as primary creators and distributors of news and information. The dominance they once had has been replaced by ubiquitous distribution technologies that provide a continually updated stream of news through cable channels, Internet portals and news sites, social networking sites, mobile devices, and news screens on buildings and in public transportation.
It should be no surprise, then, that the form of legacy news provision is no longer as successful as it was in the past. Those who own and work for legacy organizations see the changes as cataclysmic, but the shifting of functions to more forms is natural and provides significant benefits to those who want news and information.
We have seen this type of displacement before, even within our lifetime. Life magazine, for example, played significant roles in conveying news and features on social life from the 1930s to the 1970s, but lost its functions with the arrival of new technology and changes in social life. As the foremost visual presenter of photojournalism, the magazine once garnered 13.5 million circulation, but changing media preferences for audiovisual materials on television news and magazine shows stripped Life of its audience and advertising.
Many functions of network television news, which grew rich in the 1960s and 1970s, were displaced in the 1970s and 1980s by local television newscasts that provided more hours of news and more opportunities for viewers to get international, national, and local news. That displacement was compounded by the development of 24-hour cable news channels.
Today, further displacement of the functions of network and local television news is taking place and the functions of metropolitan daily newspapers are being significantly affected. This does not the end of news provision, however. Although many journalists in the legacy media desperately assert that only the forms of news in the organizations that employ them can serve social needs and provide quality journalism, the reality is far different.
Reputable and well-trained journalists are now establishing new journalistic forms on the Internet, linking web and print operations, and syndicated materials produced by web-based news providers. There are more journalistic startups now than anyone can ever recall.
Although web-based news has historically be aggregated materials from traditional sources, these new enterprises—some commercial and some non-commercial—are increasingly providing original journalism. Some are concentration on serious investigative national and international reporting; some are providing hyper-local coverage; and some are providing coverage of specialized topics. These serve some functions previously provided by legacy media and some functions legacy media ignored.
The technologies are also allowing engaged citizens to create and distribute news and information on their own, supplementing material produced by professional journalists or providing material in its absence.
These are healthy developments for journalism and for those who want news and information. Although the form of provision is changing, the functions of gathering and conveying news and information and the functions of keeping people informed and engaged are continuing and being improved.
Tuesday, March 18, 2008
THE INTERNET, MOBILE MEDIA, AND YOUTH ARE NOT TO BLAME
Traditional media industries and companies are overwhelmed with an atmosphere of consternation and fear today.
Trade publications and industry association meetings are filled with news of diminished budgets, reorganizations, consolidations, and layoffs. People say traditonal media are declining and will soon disappear. Potential employees are wondering if there is a future for them in the industries and senior employees are hoping their jobs will last until they reach retirement. Everyone is pointing the finger,but most of the blame for killing traditional media is laid on the Internet, mobile media, and young people.
There is just one problem with their scenario. IT’S NOT TRUE. We have deluded ourselves into thinking that well established media are dying and that young people are uninterested in traditional text and audiovisual media.
Although new distributors of information and entertainment abound and video on demand and consumer-created content are increasing daily, consumers’ greatest time allocation and advertisers’ greatest expenditures remain with traditional media. Although young people have adopted newer media technologies more rapidly than other population groups, most of their media use still involves film, television, magazines, and non-traditional newspapers.
If the death knell for traditional media is not ringing, why do industry personnel keep hearing bells in their ears?
The reason is that significant changes are underway and most people don’t understand them. We have reached a era when the collective weight of expanded offerings of traditional media and the appearance of new types of media are ending the relatively undemanding operating conditions that existed due to lack of media choice and are removing the effortless profits that traditional commercial media enjoyed for a half century.
Suddenly there is competition. Suddenly there are financial losses. Suddenly there are company failures. Suddenly audiences are no longer satisfied with the “take content on our terms when we want to deliver it” approach that traditional media have offered. Only it wasn’t really sudden. Those factors have been growing incrementally for at least three decades. The problems were certainly compounded by the arrival of Internet and mobile content distribution, but they were not caused by them.
Let’s look at the case of the newspaper industry in the U.S. Readership problems have been evident for half a century. Although actual circulation rose continually throughout the twentieth century, reaching a height of 62.6 million in 1993, penetration has declined steadily at 1 to 2 percent each year since 1950. The pace has been steady despite the appearance of additional types of media. The expansion of network television didn’t increase the loss, the arrival of cable channels didn’t amplify the decline, and the arrival of the Internet didn’t boost the pace.
Today, the Internet is having an affect on advertising, but even that is not disastrous despite the wailing and gnashing of teeth. Total U.S. newspaper advertising was $46.6 billion in 1999 and $49.3 billion in 2006. In financial terms newspaper advertising is rising, but when accounting for inflation it has basically plateaued so one can not say the Internet is killing papers. If we look at classified where the biggest substitution exists, classified advertising in newspapers reached a height of $19.6 billion in 1999 and it was $16.9 billion in 2006. Clearly a decline occurred but it was offset by the fact that newspaper online advertising produced $2.6 billion in 2006. Overall, the business has stopped growing and investors are unhappy, but the industry isn't dying.
Certainly, the Internet is having many effects on established media. Research shows that print media business models have been least disrupted, unlike audiovisual media, but that print media work processes are changing most among media. However, Internet, mobile and other new form of distribution are providing all types of traditional media new opportunities.
Similar things have happened in the television business. The change from a limited number of television channels to hundreds of television, cable and satellite channels spread the audience, reduced the viewers of dominant stations, and made advertisers unwilling to continue paying previous prices. The big 3 networks could count on ratings in the 20s to 30s in the 1970s, but today they achieve ratings in the teens and are fighting to stay among the big 3. Nevertheless, viewers want network programming--on TV, as DVD, as syndicated programming, as downloads. There is no sign that demand for interesting programs is diminishing even if the basic television ratings are falling and new ways of monetizing the content are being developed.
We all need to recognize that changes in traditional operations are painful for industries, companies, and their personnel and that the contemporary changes are placing a lot of stress on management and employees. Everyone would prefer to continue doing things in the old ways they know well, but because of the new conditions those business models, processes, and market techniques aren't working as effectively as in the past.
The biggest challenges facing people in traditional media today are pessimism and lack of vision. Morale in publications and stations continues to drop, and doom and gloom are everywhere. That negativism makes things worse internally, reduces confidence of advertisers and investors, and makes it difficult to think about trying new things or even trying old things in new ways. The first step out of this condition is to stop lamenting the passing of the past. Things will never be the way they were. So get over it. Move on. Discover and embrace new ways of operating and new opportunities to prosper and grow.
Trade publications and industry association meetings are filled with news of diminished budgets, reorganizations, consolidations, and layoffs. People say traditonal media are declining and will soon disappear. Potential employees are wondering if there is a future for them in the industries and senior employees are hoping their jobs will last until they reach retirement. Everyone is pointing the finger,but most of the blame for killing traditional media is laid on the Internet, mobile media, and young people.
There is just one problem with their scenario. IT’S NOT TRUE. We have deluded ourselves into thinking that well established media are dying and that young people are uninterested in traditional text and audiovisual media.
Although new distributors of information and entertainment abound and video on demand and consumer-created content are increasing daily, consumers’ greatest time allocation and advertisers’ greatest expenditures remain with traditional media. Although young people have adopted newer media technologies more rapidly than other population groups, most of their media use still involves film, television, magazines, and non-traditional newspapers.
If the death knell for traditional media is not ringing, why do industry personnel keep hearing bells in their ears?
The reason is that significant changes are underway and most people don’t understand them. We have reached a era when the collective weight of expanded offerings of traditional media and the appearance of new types of media are ending the relatively undemanding operating conditions that existed due to lack of media choice and are removing the effortless profits that traditional commercial media enjoyed for a half century.
Suddenly there is competition. Suddenly there are financial losses. Suddenly there are company failures. Suddenly audiences are no longer satisfied with the “take content on our terms when we want to deliver it” approach that traditional media have offered. Only it wasn’t really sudden. Those factors have been growing incrementally for at least three decades. The problems were certainly compounded by the arrival of Internet and mobile content distribution, but they were not caused by them.
Let’s look at the case of the newspaper industry in the U.S. Readership problems have been evident for half a century. Although actual circulation rose continually throughout the twentieth century, reaching a height of 62.6 million in 1993, penetration has declined steadily at 1 to 2 percent each year since 1950. The pace has been steady despite the appearance of additional types of media. The expansion of network television didn’t increase the loss, the arrival of cable channels didn’t amplify the decline, and the arrival of the Internet didn’t boost the pace.
Today, the Internet is having an affect on advertising, but even that is not disastrous despite the wailing and gnashing of teeth. Total U.S. newspaper advertising was $46.6 billion in 1999 and $49.3 billion in 2006. In financial terms newspaper advertising is rising, but when accounting for inflation it has basically plateaued so one can not say the Internet is killing papers. If we look at classified where the biggest substitution exists, classified advertising in newspapers reached a height of $19.6 billion in 1999 and it was $16.9 billion in 2006. Clearly a decline occurred but it was offset by the fact that newspaper online advertising produced $2.6 billion in 2006. Overall, the business has stopped growing and investors are unhappy, but the industry isn't dying.
Certainly, the Internet is having many effects on established media. Research shows that print media business models have been least disrupted, unlike audiovisual media, but that print media work processes are changing most among media. However, Internet, mobile and other new form of distribution are providing all types of traditional media new opportunities.
Similar things have happened in the television business. The change from a limited number of television channels to hundreds of television, cable and satellite channels spread the audience, reduced the viewers of dominant stations, and made advertisers unwilling to continue paying previous prices. The big 3 networks could count on ratings in the 20s to 30s in the 1970s, but today they achieve ratings in the teens and are fighting to stay among the big 3. Nevertheless, viewers want network programming--on TV, as DVD, as syndicated programming, as downloads. There is no sign that demand for interesting programs is diminishing even if the basic television ratings are falling and new ways of monetizing the content are being developed.
We all need to recognize that changes in traditional operations are painful for industries, companies, and their personnel and that the contemporary changes are placing a lot of stress on management and employees. Everyone would prefer to continue doing things in the old ways they know well, but because of the new conditions those business models, processes, and market techniques aren't working as effectively as in the past.
The biggest challenges facing people in traditional media today are pessimism and lack of vision. Morale in publications and stations continues to drop, and doom and gloom are everywhere. That negativism makes things worse internally, reduces confidence of advertisers and investors, and makes it difficult to think about trying new things or even trying old things in new ways. The first step out of this condition is to stop lamenting the passing of the past. Things will never be the way they were. So get over it. Move on. Discover and embrace new ways of operating and new opportunities to prosper and grow.
Wednesday, February 13, 2008
CHALLENGES OF TROUBLESOME AUDIENCES
Media companies have historically been relatively unconcerned about and even disdainful of individuals in their audiences.
Publishers produced newspaper in ways and at times that was convenient for themselves. Television channels offered programs on a take-it-when-offered basis—Too bad if you visited your mother and didn’t see it. Journalists and public service broadcasters conceived the public as an unkempt mass that need to be educated and led to think correctly and do the right things.
Audiences were things to aggregated and sold as commodities, so media executives pretended audiences were a unified, stable group in sales pitches and that advertisers were purchasing the same group of people hour after hour, day after day, week after week.
The reality is that audiences have always been individuals that changed constantly, but media companies needed to pretend otherwise in order to aggregate them and portray them as a unified group for sales pitches. A TV channel would tout itself as best at reaching women between 25 and 54 years of age, a magazine would promote that it offered more business decision makers than any other magazine, and a newspaper would tell advertisers its readers ate at restaurant an average of 125 nights a year. Never mind the others who watched the channel, read the magazine, or stayed home at night.
The façade put up by media companies is eroding rapidly and is one reason why there is so much unease and shifting in media advertising markets today. Advertisers have discovered the big lie that audiences had specific characteristics and were stable.
The ascendancy of customer relationship managements and personal marketing, and the personal identification of audience members in interactive media have moved businesses to view them as individuals and to recognize that approaching them on an individual rather than mass basis increases return on marketing and advertising investments.
Media companies are waking up to the nightmare that many advertisers find the idea of mass audiences less appealing. At the same time, media firms are shifting their own offerings to try to make content—news and information, TV programs and films, and magazine content—available to individuals any time, any where, and across any platform.
Unfortunately most media companies are finding they know everything and nothing about their audiences. They know their average characteristics, habits, and purchases, but they no little about them individually, their individual lifestyles, and how they individually consume media and other products.
Media companies have a great deal of catching up to do in order to understand individual consumer behavior and its implications for their business models. Doing so will be difficult because media companies tend to know less about their customers than other types of companies. In the past media CRM programs have been absent and audience research has been relatively unsophisticated and had limited applicability.
One of the first lessons media executives are learning is that human beings are troublesome. They tend to do what they want, when they want, and how they want. They resist being constrained and controlled. They are prone to changing their minds and interests. They want flexibility in their lives. They make it different to predict their preferences because their tastes and needs change over time. They are fickle consumers who have the audacity behave as individuals rather than an aggregated group.
Some consumers want music while they are walking to the office; some want news about stock prices at 10 a.m.; others want short video entertainment when they have a coffee break at 2:30 p.m.; some want to view a prime time TV program at 5:30 p.m. when they are taking the commuter train home; still others want a recipe from a cooking magazine at 6 p.m. when they get home or a video of their choice at 8 p.m.
These demands are highly problematic because media technologies and industry structures have traditionally allowed them to tell consumers what they would get to consume and when they would get to consume it. Few companies have the competence or infrastructures to handle the new demand-driven world of media.
Media companies need to make understanding audiences and the individuals that join audiences center point of their management attention. They need to find ways to develop better relationships with them if they are to prosper in the changing environment. It is a strategic challenge that must addressed if companies are to remain vital in the media choices of their customers.
Publishers produced newspaper in ways and at times that was convenient for themselves. Television channels offered programs on a take-it-when-offered basis—Too bad if you visited your mother and didn’t see it. Journalists and public service broadcasters conceived the public as an unkempt mass that need to be educated and led to think correctly and do the right things.
Audiences were things to aggregated and sold as commodities, so media executives pretended audiences were a unified, stable group in sales pitches and that advertisers were purchasing the same group of people hour after hour, day after day, week after week.
The reality is that audiences have always been individuals that changed constantly, but media companies needed to pretend otherwise in order to aggregate them and portray them as a unified group for sales pitches. A TV channel would tout itself as best at reaching women between 25 and 54 years of age, a magazine would promote that it offered more business decision makers than any other magazine, and a newspaper would tell advertisers its readers ate at restaurant an average of 125 nights a year. Never mind the others who watched the channel, read the magazine, or stayed home at night.
The façade put up by media companies is eroding rapidly and is one reason why there is so much unease and shifting in media advertising markets today. Advertisers have discovered the big lie that audiences had specific characteristics and were stable.
The ascendancy of customer relationship managements and personal marketing, and the personal identification of audience members in interactive media have moved businesses to view them as individuals and to recognize that approaching them on an individual rather than mass basis increases return on marketing and advertising investments.
Media companies are waking up to the nightmare that many advertisers find the idea of mass audiences less appealing. At the same time, media firms are shifting their own offerings to try to make content—news and information, TV programs and films, and magazine content—available to individuals any time, any where, and across any platform.
Unfortunately most media companies are finding they know everything and nothing about their audiences. They know their average characteristics, habits, and purchases, but they no little about them individually, their individual lifestyles, and how they individually consume media and other products.
Media companies have a great deal of catching up to do in order to understand individual consumer behavior and its implications for their business models. Doing so will be difficult because media companies tend to know less about their customers than other types of companies. In the past media CRM programs have been absent and audience research has been relatively unsophisticated and had limited applicability.
One of the first lessons media executives are learning is that human beings are troublesome. They tend to do what they want, when they want, and how they want. They resist being constrained and controlled. They are prone to changing their minds and interests. They want flexibility in their lives. They make it different to predict their preferences because their tastes and needs change over time. They are fickle consumers who have the audacity behave as individuals rather than an aggregated group.
Some consumers want music while they are walking to the office; some want news about stock prices at 10 a.m.; others want short video entertainment when they have a coffee break at 2:30 p.m.; some want to view a prime time TV program at 5:30 p.m. when they are taking the commuter train home; still others want a recipe from a cooking magazine at 6 p.m. when they get home or a video of their choice at 8 p.m.
These demands are highly problematic because media technologies and industry structures have traditionally allowed them to tell consumers what they would get to consume and when they would get to consume it. Few companies have the competence or infrastructures to handle the new demand-driven world of media.
Media companies need to make understanding audiences and the individuals that join audiences center point of their management attention. They need to find ways to develop better relationships with them if they are to prosper in the changing environment. It is a strategic challenge that must addressed if companies are to remain vital in the media choices of their customers.
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