Content Continues to Trump Distribution: The Accelerating Pace of Change in The Media Business

Several announcements in recent weeks indicate that mainstream media companies are beginning to see the future a bit more clearly, and are scrambling to get themselves ready for serious changes that are coming very quickly. The fact that distribution is being squeezed and the content continues to be valued highly is clearly emerging in many of these moves announced this week:

–Comcast and Verizon said that later this year they are going to let subscribers access their content through the Microsoft Xbox 360 game console. They follow AT&T’s U-verse product which has been selling its content through the Xbox for a year.

–In Japan, a venture founded by the country’s main broadcasters, announced it will launch a smartphone-only TV broadcast channel, which will also deliver games and magazines through the digital network.

–Amazon debuted the new eKindle Fire with a surprisingly low price. It will fight to be the portal through which millions of consumers buy almost anything. Again, the price of distribution drops in order to facilitate the sale of Content.

–Magazine Giant Conde Nast moves into video content, launching a video division that will be creating films, television shows and video for its digital platforms, hiring Hollywood veteran Dawn Ostroff (most recently head of The CW network) to head up the new division.

–The breakdown of our traditional distributions models does not come easy. The Movie industry is in an uproar over Universal Pictures’ controversial move to offer its upcoming Eddie Murphy-Ben Stiller comedy on premium video-on-demand just three weeks after it opens in theaters. Several independent theater said they would not to play the movie “Tower Heist” in any of their locations if Universal follow through on its plans for the early release.

–Several TV shows in this new season found significant audience increases when they were able to measure delayed viewing numbers, ie. the number of times viewers watch the shows AFTER they originally aired.
Fox’s “New Girl” saw its audience jump 29% when it counted delayed view. NBC’s “Up All Night” was the big winner, seeing its ratings jump a stunning 46% when it included viewings in the week after airing. NBC’s “Community” also popped 40%, but on a lower base, while “The Office and Parenthood also jumped 37%.
Other shows are considered in trouble because they DIDN’T see significant viewership as the week went on, including NBC’s “Playboy Club” (since cancelled) and the NBC Comedy “Free Agents.”

What Yahoo, The Media Company, Would Look Like

There has been a lot of speculation about the future of Yahoo. While it is most likely to be sold, there is the distinct possibility that The Board could find the right CEO candidate and make another go of it. There is also the possibility that any company or person that does buy Yahoo will embrace the media strategy and try to make it happen.

So it’s worth taking a look at what Yahoo would look like if it did become a media company. The reason Yahoo has a shot at Media greatness has to do with it’s ability to mix content AND technology to create better, more relevant and more interesting content. Developing technologies are going to change storytelling as we know it. Text, Pictures, Audio and Video will are all converging on digital platforms, and the very best content will make use of all of those forms of media.

That’s something new for the media, which has in recent decades been siloed off into print, radio and television.
But the news and entertainment of the future will converge those mediums to tell the advantage of the consumer, who will get a story more richly and more efficiently told.

Newsrooms of the future will no longer be built around a form of media (newspaper newsroom, tv newsroom, etc.) but around the subject they cover: (Sports? San Francisco? Financial News? etc.). And the people who staff these newsrooms will increasingly become more knowledgable about every aspect of multi-media storytelling and know better how to deal out content over the various platforms.

Yahoo could be that truly digital media company, producing and distributing all forms of content over multiple platforms for emerging and merging audiences. Yahoo News would appear on ABC.com, in The Chicago Tribune, on CBS Radio and on the IPhone, among others. Yahoo Sports would appear on FoxNews.com, NBC-TV Sports Stations, Comcast Sports Nets, The Sports sections of hundreds of newspapers, on ESPN Sports Radio and TV and hundreds of other outlets. Yahoo TV-programs will run on web channels, linear cable TV channels and even broadcast television, not to mention mobile and tablet platforms.

Yahoo News, Sports and Finance on the web will contain headlines from every media company that covers those areas, with links back to the sites where the stories came from. The Yahoo content sites will contain its own content plus that of many partners.

When a Yahoo email account is opened and you get an email from someone, any news about that person or the company or even industry they work for, could show up under the mail window. A Yahoo page on Cable TV could suggest programs you might want to watch based on your previous viewing activity.

When you look at a stock chart, and notice the stock hit a peak six weeks ago, you could be able to run your cursor over the chart and up will come the headlines of the stories that day that might have impacted the stock, so you can possibly even see why the stock shot up.

When you watch the latest installment of you favorite TV show, you might be able to stop the show, and use the remote control to order the jewelry you see the star wearing from the Yahoo Shopping Channel. In fact, it will give you several alternative places, on line and off line but nearby, and you can pick where you want to order from.

When you are taking a walk in midtown Manhattan after work one Friday, you could possibly pull out your phone, check the Yahoo app, and find out which bars have a happy hour within 5 blocks.

At the San Francisco Giants baseball game at ATandT Park you might be able to pull out your phone, click open a Yahoo App and get the stats of the pitcher and the batter up right now.

Yahoo has the tech savvy and has the audience. It’s not easy, but it has the time to build the media brand. But building what could be a huge brand takes money and plenty of hard work on the part of an army of editors/producers/whatever we might call them.

But the prize is large…the first Techno-Media company in the world.

Why Media Companies Must Move Quickly To Engage Their Audiences

While media companies are starting to realize that they must continue to build their relationship with their customers in order to survive, new data suggests they better do so quickly and with the right partners.
New data from Citicorp shows how dramatically people are growing the time they spend on Facebook.
What this means is that the social platform is providing more and more content and providing its users with a preferred place to consume that content. In much the same way Apple has taken more and more of people’s time to consume content on it’s devices, Facebook has spent the time to learn how people want to consume and converge content into their routines, and continues to build devices for them to do so, on Facebook.
While this is generally a good thing for content creators, because it’s yet another outlet for content, it’s also a threat because it puts the social network squarely between the content creator and it’s audience. And the fact is, Facebook will know more about consumer behavior than the content creators will. This is the exact issue that causes the content providers to worry about Apple.
But now, like Apple, we’re beyond trying to create alternatives. Success will come to those who work best with Apple and now Facebook. It’s a long, hard road to succeed reaching today’s audiences without them.

Knight Foundation Buys The Journalism Profession Some Badly Needed Time

The world of Journalism is in a world of pain. It’s having a severe identity crisis, caused largely by the fact that it’s readers and viewers are behaving like A.D.D – stricken kids and jumping from one new device to another to be entertained and informed. The chaotic and exciting world of changing technology has captured the hearts and minds of everyone, and given them an entirely new set of expectations about how frequently and easily they can access news and entertainment, and how easily they can access marketplaces for things they want to buy and sell.

Combine all that with a rotten economy that has cut advertising expenditures in general, and you have a perfect storm threatening the world of journalism, particularly on the local level.

While it’s truly becoming a wonderful world of media, and while people are consuming more of it than ever, those who are in the business of creating that content are perplexed and confused. The rules of their world have changed and are continuing to change with each new development, which could be anything from the rapid adaption of mobile devices as sources of news, information and entertainment to the dramatic rise in alternative delivery systems and platforms for high-quality video content.

So along comes the John S. and James L. Knight Foundation to help fill the growing breach between consumer demand for local journalism and the diminishing ability of traditional news sources to serve that demand. The Knight foundation is supporting, through several initiatives, a large number of projects designed to bring targeted, valuable news and information to audiences everywhere.

the latest round of Knight initiatives were announced yesterday (Sept. 21, 2011) in San Francisco. As part of a larger effort called the Knight Community Information Challenge, community foundations around the country were invited to propose projects that would help grow new outlets for local news and information. Yesterday, Knight announced 19 grants totaling $2.26 million dollars.

A New Orleans group is going to increase coverage of and oversite into charter schools there. A Lexington, Ky. entry promised to encourage healthy eating and lifestyles. In rural Puerto Rico, where unemployment runs as high as 40%, a community foundation will attempt to increase the information available to those seeking jobs and give small businesses tips on how to create jobs, get permits and manage projects.

Three different foundations in Denver and Atlanta are developing ways to make government data far more available and useful to local people and businesses that could use it.

Still other projects more directly involve training and deploying more locally-based professional journalists, and sharing their experiences with each other. A Vermont website was funded to hire an investigative reporter to cover health reform and energy issues in the state. A Winnipeg, Canada, foundation was given money to train, engage and empower citizen journalists in places where professionals rarely go.

In the end, quality journalism has to survive as a self-sustaining industry. But efforts like these and the thousands of others across the country to fund serious journalism with contributions are helping preserve the best elements of our profession. That is an awesome task.

But we in Journalism will have to be able to stand on our own two feet and follow our own instincts on what stories to follow and not worry about whether or not there is enough money to do the things we HAVE to do.

The Secret Sauce For Yahoo: It’s About Content AND Technology

With all of the chaos at Yahoo, the debate is raging yet again: Should it be a better tech company or should it be a content company? Has it conceded so much ground in the tech arena to the likes of Google and Apple that it HAS to recreate itself as a content company, or should it try to regain the mojo that help it become a powerhouse of the last decade and build an audience of several hundred million users? Or, is content the right way to go anyway?

The answer is yes, to each question. Yahoo has talented and creative engineers and programmers. It also has a huge audience that it has monetized better than most with display advertising. But it has also been left in the dust by Google’s ability to build a monster search and direct advertising business. And it has lost significant ground in email and mobile application development. On the content side Yahoo has historically done a great job as an aggregator and shown the ability to add value in that aggregation by attracting significant audiences from its large pool of users. But it has not shown an ability to crack the new media formula that has begun to build businesses around a combination of aggregation, curation and original content (like Huffington Post, The Daily Beast and others.)

The magic formula for the future involves a combination of content and technology, specifically the technology that will create new forms of storytelling and guide better and more efficient consumption of content.

We are entering an age of Convergence. Content and technology are converging to create the newest forms of storytelling and giving consumers entirely new ways to consume content. The creation of IOS and Android powered smart phones, The IPad, Kindle etc, and other developments have clearly changed the landscape and they are only the beginning.

Successful content companies will need to understand and even master new technologies and truly understand how their customers will use those technologies to consume content. In order to succeed they will have to learn how to deliver their content on the new platforms AND how to optimize their content for those platforms. If the ability to give consumer content in real time continues to grow, will content companies have to accept that more content will need to be delivered in smaller bites? Will they have to include more video or interactivity on portable devices? Will targeting that content become even more essential in order to help consumers navigate an overwhelming overload of content?

We barely know the questions to ask, much less the answers. We are starting to understand those questions, but the answers are more elusive than we think. Media companies will have to continue to pay close attention to both technology AND consumer habits, particularly how consumers continue to change their habits because of new technology.

While many companies are taking steps in these directions, no one has emerged with all the answers. Apple has done a magnificent job of matching new products with consumer demand, even helping to create the demand. But Apple has done that from the perch of a consumer products company, a hardware company. They have steadfastly avoided the creations of content and have even had very rocky relationships with many of the content creators because their interests aren’t totally aligned.

Google has done a great job of building a targeted advertising business that takes advantage of its search business to uber-target and create efficient management. But Google, too, has avoided becoming a content creator. It does generate content from some acquisitions, but for the most part it’s content created by others, like the videos on YouTube or restaurant ratings from Zagat’s readers.

So the door is open for a company that can simultaneously seek to listen to and understand it’s audience and participate in the development of technology that gives them what they want and more.

Yahoo needs to be a company that commits to creativity in both technology and content, attempting to lead in both, but only in the context of how they work together. Whether content is email, user-generated video, advertising or unique reporting from a war zone, Yahoo should be all over the process of creating and delivering content to consumers through multiple platforms.
It should also take advantage of having one of the best brands built over the past decade to create branded content on all platforms.

Yahoo Must Move Quickly to Finish What It Started

You have to give fired Yahoo CEO Carol Bartz credit for understanding fairly quickly that the business had to become a media business to succeed. For a tech CEO to come to that conclusion had to be difficult, especially at Yahoo, where engineers have dominated the company from the beginning, leading to much of its early success and many of its later problems.

Unfortunately for Bartz that conclusion meant either she had to move quickly to get the kind of media executives needed to create a great content company, and give them the rope to succeed OR have the company replace her with a content-related CEO.

But neither happened, and once again like so many times before, Yahoo flailed about and failed to match performance with expectations. In the area of journalism, they talked the talk about bringing in strong content creators and they have hired some truly talented journalists, particularly in sports, but others as well. And they have brought in some talented and experienced execs, like Ross Levinsohn. They have not, however built any kind of media infrastructure to nurture the creation of leading brands of major news, sports, arts and business categories. All of those have huge advertising markets but has done little to break new ground for advertisers on their digital platforms.

Yahoo News, Yahoo Sports, Yahoo Arts, Yahoo Finance could claim the high ground with the right leadership teams. They have to learn to extend their brands into more traditional media through partnerships and creative thinking (perhaps like Yahoo itself has done in partnering with newspapers on classified advertising. ) Having some of Yahoo’s first rate journalists in all categories- appearing on television and print regularly is a start, but real programming is even better. There is plenty of bandwidth and there are plenty of networks looking for programming. Even though they will be digital players at heart, making waves on all media platforms will accelerate their ability to build their content brands.

Yahoo’s massive audience gives it the ability to play with the traditional media big boys, who have huge audiences on their platforms but struggle to transition their content to the new platforms. Yahoo could take a page out of the Politico Playbook, and build old and new media publishing at the same time, and manage the transition of their readers from one medium to many others.

It’s not just in news or journalism where Yahoo can play. It started down the path of creating entertainment content, but cut the cord on that experiment much too quickly, and watching the execs who they hired go off and do exactly that outside the company.

It’s always hard to tell from the outside why a CEO fails. There could be blame to be shared with some of the board members, or entrenched staffers or even the founders, but we can’t be sure. Besides, the buck stops at the CEO’s desk and managing the expectations of her constituencies, including the board, the founders, the staff, partners, the financial world and customers is her job, and it’s why she gets the big bucks, coming and going.

MediaPost Publications Understanding The Video Consumer 08/18/2011

MediaPost Publications Understanding The Video Consumer 08/18/2011.

From MediaPost:

“According to the Nielsen Cross Platform Report, Americans are spending more time watching video content on traditional TVs, mobile devices and via the Internet than ever. Overall TV viewership increased 22 minutes per month per person over last year, demonstrating moderate growth and remaining the dominant source of video content for all demographics. Even the lowest fifth quintile of TV viewers still averages an hour of TV consumption per day, with the highest quintile tuning in for nearly ten hours per day.
Mobile video viewing continues to see marked gains, with the number of Americans watching video on their mobile devices increasing 41% over last year and more than 100% since 2009. Time shifted TV continues to grow, both in the penetration of DVR devices in the home and the time spent. Internet video streaming also saw increases in time spent; this behavior is the highest among a younger and diverse subset of the population.

“Over the past year, satellite and telephone company-delivered TV subscriptions increased while subscriptions to wired cable decreased slightly. Broadcast-only households remained stagnant. Two thirds of TV homes now have an HDTV, an increase of more than 20% over last year. Slightly less than half have a video game console or a DVR, 45% and 40%, respectively.

“African-Americans watch the most video content, including traditional TV and mobile video, though less timeshifted TV than the general population. Asians have emerged as the hands-down leader in time spent watching video on the Internet, averaging six-plus hours more per month than Whites and nearly four hours more per month than the next closest ethnic group, Hispanics. Asians also watch far less traditional TV than the general population-more than a third less than Whites and half as much as African-Americans. Like Asians, Hispanics watch less traditional TV but more Internet video than the general population, but to a less extreme degree.

“Satellite, broadcast-only and wired cable delivery of TV content is nearly even among three of the four ethnic groups tracked, with Hispanics being the outliers. They are more likely to get satellite or be broadcast-only than Whites, African-Americans and Asians, and much less likely to get wired cable.

“Age plays an interesting role in video audience consumption across media, with the age groups 25-34, 35-49 and 50-64 each dominating a specific platform. Traditional TV viewership steadily increases with age, so it comes as no surprise that Adults 50-64 make up the largest segment of the traditional TV audience (25%). The largest segment of the Internet video audience is Adults 35-49 (27%), while the largest segment of the mobile video audience is 25-34 year olds (30%).

“The new trend among our TV and Internet homes shows the lightest traditional television users streaming significantly more Internet video via their computers, and the heaviest streamers under-indexing for traditional TV viewership. This behavior is led by those ages 18-34.The group of consumers exhibiting this behavior is significant but small. More than a third of the TV/Internet population is not streaming, whereas less than 1% are not watching TV.

“Hispanic mobile subscribers are the most likely to have a smartphone, while White mobile subscribers are the least. The greater use of smartphones could be linked to Hispanics watching more video on their mobile devices than the general population. Likewise, the availability of Spanish-language channels available on satellite continues to drive the increased number of Hispanics who opt for satellite-delivery of their TV content.

“Cord Swapping: Debunking the myth that consumers are no longer willing to pay for television content subscriptions, Nielsen found that 91% of TV households still paid for a TV subscription in Q1 2011. Instead, evidence points to a slight reshuffling of the method selected, whether cable, through telephone companies or satellite.”

Talking, and LISTENING, to Your Customers: The New York Times Takes a Big Step

Last week the New York Times took a giant step into the present. It started behaving the way entrepreneurial early-stage businesses behave. Unlike most successful mature companies, the Times is trying to embrace the culture of the startup by bringing its customers into the development process.

The times launched Beta620, a public site for many of its experimental projects, and asked the public to sign on and help them evaluate the projects and suggest how to improve them or even more projects. Under the headline “What’s Going On”, the Times described the site and their goals this way:

“Welcome to beta620. At The New York Times, our software engineers, journalists, product managers and designers are constantly striving to create new and innovative ways to present news and information and interact with our readers. Yet it’s often difficult to try out new inventions on the world’s largest newspaper Web site. That’s why we created beta620, a new home for experimental projects from Times developers — and a place for anyone to suggest and collaborate on new ideas and new products.”

Successful, mature businesses focus on staying successful. They don’t put out products until they are ready for prime time. They don’t want to jeopardize a successful business by presenting something that might not be perfect. The fear is that the consumer might interpret something less than perfect as a defect and lose confidence in the brands behind billions of dollars in profits.

Contrast that attitude with Google, where new products are labeled “Beta” for years, and evolve based on continuing and considerable consumer reaction. New features are added to products after they are suggested by actual users. Besides having the advantage of making your customers feel empowered, the process serves another purpose: it helps Google see changes in consumer behavior as they are happening. The success of new business frequently comes from understanding the consumers better than a more traditional business that may cling to old consumer habits long have they may have changed. For example, don’t just keep pushing DVD’s if the public is now watching shows on digital platforms. Traditional DVD businesses wither while new companies like Netflix and Hulu grow quickly using multiple new forms of distribution.

I remember how frustrating it was in 2006 when I was negotiating to put CBS TV shows on Google. Google hadn’t yet launched Google Video, nor had they bought YouTube. CBS was nervous about how their shows would look on Google TV, and pushed Google on making sure that the viewing experience would be as close to perfect as possible.

The Google folks basically told CBS not to worry. “We just call it Beta and let our viewers test for us and tell us how it’s going. We’ll just keep the “Beta” on the site as long as we want so people will understand if the video freezes or refuses to start.” To emphasize the point that this was a work in progress, the Google management team wanted CBS CEO Leslie Moonves to join them on stage wearing Lab Coats as they introduced the product to the Consumer Electronic Show in Las Vegas.

The horrified look on the faces of the rest of the CBS management team said it all. No, Leslie Moonves would not wear a lab coat. The CBS people pushed hard for guarantees that the video would be perfect before the launch (those guarantees never came…and how could they? Who could guarantee anything involving the public internet?

The clash of those two cultures was symbolic of the ongoing relationship between traditional businesses and the emerging digital royalty. While the CBS’s of the world were right to protect their brands because those brands had built multi-billion dollar businesses, the Googles of the world were also right to engage their audiences in the process of product development, because they recognized that so much is changing so fast, it’s virtually impossible to keep up with changing consumer habits unless you track them in real-time. Public Beta tests do exactly that. The difficulty in that world is to make sure you don’t overreact to real time data…instead opting for continuous evaluation and analysis, and regular testing.

In both worlds the companies ultimately have to trust the instincts of their smartest people. But the difference is the quality of data they have to inform their decision. In today’s world, much of it has to come directly from customers or consumers in as close to real time as possible.

Gilt Becomes a Content Creator For All The Right Reasons

In today’s digital world, over time nearly every company has to become a media company. That is a cornerstone theory of my book C-Scape. The “C” stands for the four themes of change that every company, media and otherwise, has to embrace: Content is king, The Consumer is in control, Convergence is changing your business and Curation is a new skill you much embrace.

Today I got an email from the fast-growing digital shopping business Gilt, known for it’s daily sales of high-end branded products and services.

The email announced the launch of “Park & Bond,” which it described as a “new shopping destination for men.”

But let’s look at what they say you will find there:

Curation: “A curated selection of the world’s best brands, available when and where you want them.”

Consumer: “The Ability to see how virtually every item appears as part of a head-to-toe look”

Content: “Tools and Content designed to help men build an amazing wardrobe and get the most out of it, from personal shopping to buying guides and how-tos”

Convergence: “Park & Bond. It’s the New Intersection of Men & Style”

To be sure, Park & Bond is a shopping site from a commerce company, Gilt. But as a new digital business it proves that it understands the most fundamental issues around doing business today. Companies must provide much more for their customers, and create the kind of experience that helps them do everything they need to do in life, including shop. It’s simply good business.

Consumers face an overwhelming set of choices for everything they do, from reading a magazine to watching TV to buying a shirt to taking a vacation. Increasingly they need and appreciate guidance and intelligent curation of their choices. Park & Bond provides consumers with all kinds of helpful information, from “How to” stories helping some of the more style-challenged members of the male species, to details on fashion trends and advices on what to look for when buying clothing and accessories. And the context of the answers is how the customer uses the product, not how it’s sold or who sells it. There are also cultural guides and and advice on taking care of clothes.

In order to succeed as a consumer business in the future, businesses are going to have to give them more and more help in quickly and easily making the best choices they can.

Tablets Booming as Content Consumption Devices

Tablet owners have quickly adapted a preference of using their tablet rather than a computer for media consumption of all kinds. Weather, music, games, News and Information are all categories of information that tablet users would rather get from their tablets than from a PC, according to new research from Frank N. Magid Associates, Inc.
“Reading” has also quickly become something tablet users would rather do on their tablet than any other place.
Tablet users have taken the time they need to be on tablets from a number of other areas, including time they had spend reading print newspapers and magazines AND the Time they spent using the Internet on their phones.
Finally, Tablet users as a group are much more active media consumers than mobile phone users are. Those who get tablets spend much more time on their email accounts, on the internet and doing many different things on digital platforms.
The charts: