2nd update 9 09 08: Bloomberg reports US hires attorney to challenge Yahoo-Google partnership on search ad placement:
http://www.bloomberg.com/apps/news?pid=20601087&sid=awx_t6haGxVI&refer=home
Update: This post from Forrester marketing blog (about Google Chrome) helps to further the points in this post. Google Chrome Will Boost Pre-emptive Contextual Advertising
The title of this blog refers to a few main themes associated with this important time in our history. An article in the NYT on Aug 11th Is Google a Media Company? touches one of them.
One of the key themes accentuated and capitalized upon during the industrial revolution were the benefits of specialization in the manufacture process. Specialization had been known about for a century (and more) and yet it only achieved social momentum in the American industrial revolution. Jump forward to today...
The broad vertical of media, faced with unprecedented new technology and social momentum, must now evolve. The business cycle seems to have us collectively arriving at a spot where an overly aggregated industry is about to realize that the potential value in specializing in portions of the process of making and distributing content to consumers. In this way the process will become more efficient, allowing competitive advantage in a world where the median is constantly changing. It will allow the market to determine need....which in this case should be listed first. And finally, it will allow content producers to focus on that one aspect of the business thereby increasing efficiencies throughout the supply chain.
To many people this is already happening but in the world of FCC licensed media, this concept seems foreign, threatening, and offers little insight as to how the old business model will be incorporated into the old way of doing business. This patterned response is exactly why ten giants steps backward are first needed to see WHY this is happening right now. The (industrial) (r)Evolution of Media is demanding the same steps that occurred quietly in the unconnected post civil war US. Sure, we roared about it as a nation as our industrial capacity shot up in comparison to the rest of the world but the incremental steps were painful as hell for many groups of Americans. It was, at its core, a social movement, not a technological event. The same is true about right now.
They foresee Google’s becoming a powerful rival that not only owns a growing number of content properties, including You Tube, the top on line video site, and Blogger, a leading blogging service, but also holds the keys to directing users around the Web.
“If in fact a Google property is taking money away from Google’s partners, that is a real problem,” said Wenda Harris Millard, the co-chief executive of Martha Stewart Living Omnimedia.
Distribution and production of content must be separated and specialized in order to be more efficient for a market that is prepared to consume more media on the right terms. <think-the human thirst for knowledge, both trivial and substanative> The "right terms" means, and will coincide with a period of deflation in the pricing of content. This sounds like a forecast but is, in fact, already happening. It will simply happen a lot more before the needed scale of demand exists in order to create the social momentum for new processes to be created. All meaningful social creation is confirmed in our groups(our units of association), be it business or social groups, reflects the developing social mood. So the way in which we create our business tools is reflective of social mood. And while this is a very large and slow moving trend, it is seen in the evolution of industries throughout history. The most important question is, why will it be different this time? We'll get to that. In the meantime this post will begin a category, or trend thread called "specialization". In that category we will look at incremental signals that the vertical is both acknowledging the emerging market need and responding with momentum toward the needed change.
So, from this social perspective on the market for content, it is likely to keep evolving this same way. In the meantime, however, (the other key dynamic) social mood continues in the direction of the larger new trend. In a nutshell, that means "smaller units of social association" will proliferate is a key aspect of the developing trend and our business verticals, like a pocket knife will adapt accordingly with cool devices. This also suggests monopolies will not be desirable constructs socially. That means a social backdrop conducive to specialization on multiple social and business levels. And in what will be the most important trend in media, it will mean that a higher value on smaller groups will mean a secular shift in how "reach" in media is valued. The CPM will become archaic as the new metrics of media are recalculated. It is already happening but these are the trends that will grow and seeing both historic patterns in behavior and how social mood expresses itself cuts through some of the fog. In these complicated social transactions we will rewrite parts of our social contract that has characterized media consumption for decades. Why? Because all the social indicators point to the fact that it is the time to do just that. John Malone is right when he says that content must be paid for otherwise it will not be produced and distributed. What he does not acknowledge is the deflationary forces re-shaping expectations and how business enterprises will acclimate to the new world of media.
Perhaps this is the key to understanding why this view is how it must be seen; not as a reaction to technology, as much as it is how we perceive an uncertain future and create in light of this changed social perception. Technology has a history of coming along and changing us forever but knowing what social mood is doing when that happens makes a big difference in the general nature of the future we create.
When social mood changes, how we values things changes. Things of all kinds and social value. Dave
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