Maybe the best place to begin is to survey is the world of "old media" enterprises. Q:Why old media enterprises and not the newer, sleeker, more updated social platforms that connect us to everyone, their choices and, everyplace?
A: Because old media has a sustainable, transparent business model that evolved from consistent market feedback over time. And while it is understood to be in decline, it is still working, and this combination is much more robust than anyone seems willing to acknowledge right now.
Current trends in the broad content universe are truly dizzying when you include user generated content platforms. There is just so much any one mortal can digest and interpret and the key seems to be a willingness to adjust volume levels up and down (on our own) of any new input. If we do not do this pro-actively, the software driven world of social networking (media) might have us believe that the Facebook empire is our collective future. It's not.
There is no doubt that we collectively value the features and benefits of our social networking and it has forever changed us (in a very positive way) using these new digital networking tools. However, extrapolating from here to three years down the road is more likely to yield a better result by looking at strengths still in place in the world of old media enterprises and how to combine the improvements offered by "social everything".
Over many decades, the business model for old media companies in the US leaned on one critical factor. There was a substantial barrier to entry that was reliable. In that period the main form of competition was product and promotion based. <but there were ongoing competitive forces shaping and reshaping> Since most franchises are geographically focused, competition was limited but so was the target area. On average, this reduced the challenges to a manageable set of problems facing companies that evolved towards a simplified structure emphasizing what matters most to consumers.
During the broadcast era, Choice was limited by the nature of the technology. A competitive dynamic evolved in our markets into a dualistic structure where two customers ultimately emerged: The consumer of content and the sponsor. The link between these two constituencies was measurement, otherwise known as ratings. These days, the new reality of digital engagement metrics has turned this realm of business into a gold rush mentality (using secretive and complicated algorithms) not unlike the speculative financing witnessed just a few years ago in the housing boom. It is not understood nor is it explained much more than superficially to end users. And while we know how the era of modern finance has hit a dramatic speed bump owing to complexity, this period of expanding engagement metrics feels distorted and likely misunderstood.
Better metrics of engagement are a driving force in the content universe and seem to offer great promise. This observation is too simple, however, and needs to be seen from a few perspectives. The era of Choice effectively begun around the year 1995-6 as we first bought shares in the future of Search businesses. Yahoo and Google were the first generation. It might seem now as if social networking sites are taking us to the next era in our transformation by using greater amounts of our personal data to design better engagement experiences. Is lack of disclosure a hidden liability waiting to become a big problem?
One has to wonder the following; old media companies have struggled mightily to improve measurement techniques and consumers of content, when approached and asked have always demonstrated a degree of reluctance to comply. One might assume that a big chunk of this reluctance has to do with convenience, their schedule, and the ease of compliance. Just as likely though is a consumer's unwillingness to share sensitive information about themselves. What is fascinating is how the digital universe has become exceedingly effective at compiling our personal data to hold, extrapolate, and forever use at their discretion. This new reality comes complete with endless disclosures in legalese much like the warnings offered to buyers of financial securities warning of potential loss.(hey, but Everyone is doing it, right?)
In a litigious society like ours, we now know that such warnings will not stop blocking actions later if the outcome warned about exceeds our concerns. That is the American way and also why I am not in danger of not having a new book of lawyer jokes to send my brother every Christmas.
In a world where feedback from engagement with content is now possible we all clearly see how it can help marketers of content be better. Human proclivities being what hey are, however, suggests that the present euphoria surrounding social networking will be tempered at some point with legal action that demands better disclosure, just like the mortgages that were signed and later contested in a chorus of outrage and discontent. To not see this coming is to miss the obvious. The question then becomes what really matters to enterprises that monetize content (of any kind)? ...and this takes us back to the 4P's.
In the universe of old media companies, the value of the product is inextricably entwined with engagement metrics. Eventually, forces of specialization will force the interests of consumers of content and sponsors into differentiated businesses. Until then, the glue that makes enterprises profitable is firmly based on aggregated metrics that are better approximations of who is engaged with what(?). Until this time, the P that represents Product will be enmeshed with the metrics accumulated by all enterprises.
The reason this observation is valuable, and not just obvious, is because social trends that affect how consumers of content see their place in this process is very much like the transient trends that allowed us all to become blind to the risks associated with adjustable rate/option to pay mortgages several years ago. History has shown us over and over how warning labels are rarely sufficient disclosure for events that have not already been personally experienced by the person(s) being warned, especially if death is not warned.
In the meantime, the plodding and old fashioned TV stations and radio stations have an advantage recognized by few these days. In them are all the spare parts needed for two or three enterprises of the future that will rise up to fulfill all that the era of Choice promises. Social media platforms seem to be focusing on the product "P" (in their own way) but in the process they are ignoring changing socially shared values as if nothing but scale matters. It may not matter next week or next month but, when it does matter, it will be a game changer just like many new landlords now wish otherwise. When this happens, a profitable footing that is clearly understood by both parties to the transaction, will be a critical advantage and the next phase of media revolution will take another vector.
Once more: Is lack of disclosure between host and customer a hidden liability waiting to become a big problem?
Is transparency a critical dynamic in the formulation of customer experience? If shared values were always to stay the same as they are right now then maybe not. It is precisely because how we value things changes with social mood (things and ideas of all kinds), that this observation is worth much more than a few hundred words of our time.
Dave
Further reading: Two older posts that are relevant:
Revolution of Evolution of our Media Tools? (looks at the much longer time horizon)
Distribution Channels Continue to Multiply But Are They The Ultimate Answer?
