This follow-up post is long overdue because the first few drafts each became chapter length discussions on the larger theme of this blog. So here's the short punchy version without too much detail:
The current business model for media enterprises is based upon the idea that more is better in alignment with the idea of the CPM. This approach worked wonders for many decades because everyone felt the same way.
The Era of Choice that began with new supply side dynamics of the digital environment changed this at the most fundamental level. Now, we feel the current recessionary psychology all around us as the marketplace is seeing demand for quality over quantity. This change is typical of a recessionary environment but the underlying cause, this time, is very different.
The ability to better qualify engagement (with content) is not just necessary going forward; it will define the successful media enterprise in the years ahead as the digital environment asserts its influence upon the changed patterns of content consumption. However, in order to get better consumption metrics will require a fundamental change in how the media enterprise interacts with consumers of media. The Era of Choice has permanently changed the balance of power in the business equation for content. Very few existing enterprises are prepared to adjust to this reality at present because the foundation of the vertical has been based upon an assumption that is no longer valid. (If you build it, they will come, on your terms)
Partnership in the Era of Choice requires a new social contract be negotiated with the market for content of all kinds. Just like during the industrial revolution, this requires that specialization be focused upon the two key components of the media enterprise.
The period of social correction we are in now will increasingly exert pressure upon media companies to work differently to serve consumers. In this light, the only way toward better, more detailed use metrics will require a corresponding give and take in other areas with customers too. The key challenge in this regard is that, for the media enterprise, there are really two customers with differing needs and, in order to serve these divergent needs (sponsors and content consumers) the companies will have to split in order to fulfill the promises that we know intuitively are possible now.
An important key to this conversation is understanding the macro role of a social correction and its near-term influence upon this process. 'What really matters' is being decided through public discourse. And while few managers want to think about how to completely re-engineer (or break apart) the media business model, the reality is that content is a tool meant to serve markets of people and profitability should be seen as a report card on the effectiveness of the business enterprise in the mission to serve the intended market.The present public company structure of most enterprises will eventually hasten the process.
As it stands right now, the market structure for monetizing content needs reform and this will only come through the specialization that will result when the media company is properly split into the two component parts: content production and content distribution. And if this sounds like a very specific idea, or even if it sounds like a very general idea, the real point is that in this prescription is room for innovation that is the responsibility of the competitors to figure out together, without collusion or over-reliance upon regulation.
<so really, the focus upon Google right now is terribly misplaced and a sign that the older generations are, as yet, unwilling to cede creative control to those who will be using it in the years ahead to rebuild our competitive advantage in the world economy from a secular bottom of some kind. >
Having spent enough years in the media business to appreciate the creative destruction that will be needed to get to where this period of new construction will be possible, well, it is simply a leap that must happen no matter how challenging it may seem.The difference between evolution and revolution at any one moment is probably best measured by one's need to look backward. What is possible right now has a lot less to do with the past than ever.
At the crux of this process will be the need to construct better use metrics that are the result of newly forged social contracts with customers which are based upon a truly rebalanced sense of trust between the vendors of content and the consumers of content. The carrot that is moving us there everyday is the reality that despite more content creation than ever before, demand for content continues to increase and together with social networking tools evolving at light speed, we are destined to come together in agreement, one way or the other. The renaissance most likely to stand out in this period of adjustment is one in which marketing is taken to new heights by a younger generation that sees the world very differently than post world war two adults have previously. The friction between the generations is not just cliche; it will provide the fires to re-forge one of our most important social tools in all of history. And no matter how much anyone thinks so right now, government will not be the arbiter in this discussion....no way.
The essential goal of achieving better metrics to characterize content consumption will be the result of a spirited new dynamic where media companies truly serve the consumers of content in a way not thought of before now and in return are granted limited access to use metrics that exceed anything we've known so far. This result would serve as a win-win for enterprises and consumers but getting there will be a bumpy negotiation as promised by a deep social correction. ready, set, go...
Dave
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