I read about the decline of traditional media forms constantly, and I have spoken about this a number of times on this blog in the past, but that doesn’t mean that the media industry is going to die. In fact I foresee quite the opposite happening. Newspapers are decrying the rise of new media forms, saying that ISPs should be forced to pay a tax for the content that their users are consuming “for free”. The MPAA (Motion Pictures Association of America) and the RIAA (Recording Industry Association of America), are fighting hard to shut down file sharing websites, and are suing file sharers for exorbitant amounts of money as a way of making an example out of these people. Industry executives seem to think the solution is more aggressive policing, and creation of copyright laws to fight something that cannot be contained. Like the boy with his finger in the dam, their efforts are hopeless.
The inevitable cannot be stopped, and by fighting the changes that are happening within the industry all they are doing is falling further behind the new mavericks within this rapidly evolving industry. Previously the way to make money in media was appealing to the lowest common denominator, selling films to the largest possible audience. This still works, but it’s not where the growth is. The advantage with the internet, and new media, is the ability to focus in on the tiniest of niche markets. Either you can focus on a narrow interest with a global market place, or a broader interest in a local market place. The ability to segment your audience with the tools available today is fantastic. On Facebook I can advertise to women between the ages of 30-45 who are interested in yoga and live in my hometown, for mere cents per click. This ability to geo target very narrow markets allows Facebook to provide a much more qualified lead to their advertisers. What the new media companies like Facebook have begun to realize, is that content is no longer king, it’s the medium that matters. Convenience is king, and now how we experience our media is the ultimate deciding factor for users.
I do not have a television, and yet I watch a lot of television programming. I choose the programs that I want to watch, I download them, and I watch them at my leisure. I do not hold myself hostage to television schedules, except for the fact that my favourite show is available after Sundays when it airs. I cannot watch this show on the TV channel’s website, and if I wanted to buy it from iTunes I can only get last season’s episodes. Some of the programs I watch are available on Hulu, but I’m from Canada, and I am currently working in Denmark, so Hulu is not available for me. Here is what I propose for the TV networks:
Turn your websites into social networking websites, or do something where you are collecting user registration information in return for free access to your programs. Finally you will have absolutely detailed demographics of your viewers, who likes what types of programs, and so much more about your viewers. Don’t just broadcast your shows with ads, but rather captivate your audience with a more interactive experience, and by interactive I do not mean they pick the ending, I mean offer more than just a program for them to watch. Offer live chat for people to comment on the shows if they like, or feedback forums where they can comment about what already happened. Your websites should be like the numerous fan sites that are created already. Engage with your viewers like never before.
Of course there are people who will prefer to sit on the couch, and not at a desk, to watch their programs. For these people we’ll have some device to be able to interface the same way they always have, or at least similarly. The issue is media companies need to open up the options and make it convenient for users to consume their product, more convenient than their competitors are, instead of limiting their options. Once you start limiting your users (notice how I say user, not viewer), then they start turning to grey market, or black market offerings like The Pirate Bay (which was recently shut down after losing a legal battle with the MPAA) or other bit torrent websites. They need to start learning how to profit from adding these new options, because whether they are profiting or not, people will start using these options elsewhere regardless. At least if you are offering it in house you can track it and benefit from it.
Part of the problem is that with results based advertising options like affiliate advertising (CPA), and pay per click advertising (PPC), traditional media companies are afraid to be held to the same level of accountability. They are afraid that if they start integrating more mixed media type offerings that their advertisers will start seeing that they have been overcharged for a very long time. The same goes for the motion picture industry, and recording industry, they are worried that people will suddenly begin to undervalue their product if they don’t hold the reigns so tightly. The product should not be the focal point anymore, but rather the relationship with your user, your consumer, that is where the money will be made in the future.
In some ways I get the feeling that the traditional media industry fails to appreciate the long term value of a customer relationship. How did George Lucas to Lucas Arts into the success that it is today? Was it by aggressive litigation against his fans for producing tributes? No, he embraced the relationship with his fans, and gave them more of what the wanted. Sure his movies made a tremendous amount of money, but he extended it so much further than that. Fans became obsessed with the movie, so they bought the toys, the video games, the posters, and of course as they became available they bought the DVDs. If you make it convenient for people to become your fan, to consume your media and to buy your related products, then you are going to start profiting.
I will admit that I have not fully wrapped my head around how movie studios can benefit from their movies being available online for free without totally pimping them out with product placements, or ruining the story telling, but I do believe it could be achieved for musicians. For music it’s a lot easier to convince someone to pay because they are supporting an artist, or at least they think they are in spite of the fact that record companies make so much more. With musicians you can build a community of fans around them very easily, and with a sense of community fans are much more likely to contribute financially. They can buy t-shirts, concert tickets, and even though they could probably find them elsewhere for free, many will still pay for music if it’s available for immediate download from the website. Here in Copenhagen there are a couple of guys who play music the main square almost everyday, and they are amazing. Every time I walk past them I have to stop for at least 2-3 songs, if not more, and I always drop in some money for them. I’m not alone either, these guys do well for buskers. I’m not saying that all musicians should be relegated to busking, but it’s a similar concept. You’re in a square, and you are surrounded by other people who are obviously appreciating these guys’ talents a lot. One person drops in a bit of money, then another, and another. There is a sense of connection there, a community in a way. Now if we apply that type of thing to a website, where you can have fans from around the world simultaneously enjoying your music, the effect can be magnified exponentially. Someone downloads a song, or an album, and it shows up on a newsfeed like feature, just like Facebook. A counter shows people buying the artist’s music in real time while they are performing a live song, streaming through UStream.tv or something similar. Online busking I suppose. Allow fans to connect with you, and you will prosper. It’s about the relationship. If you want to be aloof, fine wear sunglasses on UStream.
The world isn’t ending for media, but certainly it’s evolving much more rapidly than some would like. The one’s who hold to the comfortable, the staid, will be surpassed by the new, and the old who accept the inevitable. Change is here in the media industry, and honestly I don’t know if you can exactly call it the media industry anymore since it’s bringing in so many aspects of technology and communications. Either way, adapt or die.