The (industrial) (r)Evolution of Media

The Era of Choice is upheld in Court as Content Companies Face New Market Reality

Three years ago I began to see the Viacom suit against Google's You Tube division as a bellwether case.  It was this very subject that spawned the larger ideas for this blog based on using the idea of changing social mood as a directional indicator in the markets for content in the US. Since then I have developed a series of flow charts that lead to a new business plan based on where this process is taking us collectively. Radical change is ahead in one of our primary social tools as a nation and this is good! 

I've written about this suit every year since inception and reflected on the big social issues that are changing and not talked about while mundane narrow points of law were fought over. I have enjoyed using old western frontier metaphors when considering the issues.   The social backdrop to this case is driving change and will build further momentum in these (new) directions very soon.

Out on brave new digital frontier the suit suggested that the ranchers (content companies) insisted that the cattle markets have sellers come take full responsibility for picking up their product(cows), taking it to market, and making sure no one steals it on the way there....and if that actually happened all good western movies would have played very differently. 

Building fences was the eventual development for all landowners that wanted to protect their land claims from intrusion and theft. In order to own something you had to take reasonable precaution to protect it.

What the case never discusses is the broader perspective: Content companies in the US have had protected markets for many decades and only know how to function in a very limited competitive environment. This case is only one small dynamic of the implications of greater competition in the markets for content. There will be many others. 

See the recent post five key developments impacting the business of media and the social trends behind them 

That post is a very brief over view but will be a springboard for much future discussion here.

For now, Viacom will contest the ruling and another year of waiting is in the works.

Search gave us Choice. Choice is driving the era of change in media companies and it has barely begun as yet. Open competition will force much greater specialization along functional lines and the media universe as we know it will change just like the frontier disappeared. Back then, many pioneers were not to happy about settlers demands and some adjusted well to the development of the frontier into self-directed towns.In this analogy we have to recognize that since distance is not an issue, we are not waiting for railroads to come. That is important to see if you want to work this analogy.  I suspect Google will adjust but that content companies will have even more difficult adjustments to make to serve Choice effectively.   

Viacom Loses $1 billion copyright case to You Tube   FT 6 23 10 

Follow this thread of trend ideas from the beginning: Category: Google You Tube V. Viacom

The People (the market) sends a message to content companies

If we assume that an era of Choice began with the introduction of search, then what does 15 years of search tell us about broad social (trending) attitudes towards data ownership?

If pioneers on a specific frontier were allowed what seems like an unlimited license to gather and collect a specific critical resource, and suddenly, the needs of new (organized) generations of settlers demand change, what message does that convey about the needed structural changes to the market?

If trends are better measured based upon movement instead of any relationship to time elapsed, what do the trends surrounding search and social media tools offer as insight? 

If demographics offer the picture of cross currents in these results, what new measurement techniques does it suggest? Does it suggest to us anything about macro changes in market (for content) psychology?

Are there other market based businesses that are really obvious and can offer a model for change that is both practical, attainable, and reasonable? 

Does the emergence of open source content platforms suggest that even popular pioneers are subject to market discipline based on the consumer's preferred time line? (I am thinking about Apple as I write this but there are other examples)  In the absence of competing platforms, pioneers hold that advantage until incremental innovation evolves and Choice is allowed. In the case of needs seen as "basic utilities", won't markets react to these perceived basic needs faster? Are these questions particularly timely for Facebook? Is there an example here for Nielsen and all for-profit content companies? Who gets to decide these issues....if this is indeed the Era of Choice? 

Sometimes change comes slowly because participation in trends is slow to accumulate. Sometimes incremental technology innovations are needed and that takes discovery time. Sometimes both happen close together. 

Over time, how we (collectively) value ideas and things of all kinds changes. It changes not only because outside circumstances change but because our collective perceptions of value changes and that gets expressed through the various groups to which we belong. Businesses lag these changes, sometimes a lot, sometimes only a little. The (industrial) (r)Evolution of Media will be a series of fast moving changes designed for markets of content consumers. The boundaries between generations will be flash points for this change but extrapolating past values and behavior based on demographics may well be less useful than ever. If social media tools are teaching us anything it is that specialization is the driving point of these cool new tools. This tends to happen in smaller groups, not larger ones. In the digital environment it will be increasingly hard to maintain any monopoly or an oligopoly for long because the only barriers to entry left are regulation and since media (generally) is built into our founding agreement as a People, we should not allow the government Of The People to regulate a core freedom in a way that favors narrow specific interests. 

If open source is indeed the power of the market talking back to enterprises demanding transparency and competition, then what other critical market based businesses might be mirrored in order to serve the changing demands of content consumers? It's worth talking about. The message the market is sending; the message we are collectively sending is that the era of government controlled media oligopolies is closing out now and that Choice is the overriding impulse in all aspects of the content experience. Over time this will be seen as America's growth business.           

Four kinds of critical market metrics can be seen changing in the market for content in one short video. I doubt this is a fad or limited to some dead end niche. This small, young group deserves a lot of credit for listening. Is Facebook an unexpected echo of the dot com era?  Only time will tell...but then directional movement combined with increasing participation is the definition of a trend. Let's take the time to watch.

Choice as seen through The Diaspora Project

The Difference Between Pioneers and Settlers

12 02 10 Links added to end of post....

Americans need their media businesses to begin to make needed adjustments to their business model in order to better serve the changed markets for content. In order to expedite these changes it helps to recognize the difference, historically, between pioneers and settlers.

I am a big fan of old westerns. One reason why is because many capture the real mood and circumstances of the time the film portrays. There were economic and social highs and lows over the many decades as we moved west as a society. One of the most captivating periods of social transformation is the transition from scattered pioneers to competitive communities (markets) of settlers.  Once a frontier has been established this often involves a complicated social adjustment. (For instance: Thinking we should rely on government to manage the process is a reflex reaction but a very bad idea. Why? People should define their specific needs for government and it should not be the other way around. History shows that may invite greed and corruption when so many unknowns still exist.)

Pioneering anything requires a unique perspective and insight.  It requires skill sets most people (or companies) do not cultivate. In reviewing recent and distant history it is easy to see how the process naturally allows for inefficiencies. The inefficiencies are easily recognized later by the settlers because competition did not exist earlier. Different challenges that no longer exist are ignored as the old ways are often criticized. Yes, pioneers in our old west often wasted resources and often made no attempt to manage or conserve them but that perspective is now passed on by those who came after the pioneers.

Adding social structure to a newly settled frontier is a messy process. The vision of the few gives way to the Choices of the many. Traditions surrounding compromise and right-of-way must be established. Social contracts not previously considered often require revision in light of the needs of the new local markets. To do this, updated social norms must be accounted for and allowed room to change more with the place and the times...and then change again if needed. This is not the job of government and oligopolies will not do this well.  Successful social structures endure because they are sensitive and flexible to changing shared values of the many...not the few visionaries.  As populations grow the values of pioneers are inevitably in conflict with the newer settlers because expectations are expanded.  (Many great movie settings were born this way.)

What changed  since the late 1990's is very obvious: Technology. This change has enabled consumers of content (all kinds) to change their expectations and to have Choice for the first time. Choice is as important to the business of media as the railroad or modern guns were to settling the west and changed our nation forever. Choice has already transformed  us as a nation and how we communicate. (witness: social media) Much more change through Choice is coming.

Pioneers are both essential and reliable elements of a successful free society as they confront new frontiers. So too are settlers.  The analogy I am painting needs to be discussed (LOUDLY) in the new media these days. Government and regulatory bodies need to be removed from the business of content for The People when it comes to developing new business models for production and delivery systems. The notion that journalism might somehow go away is preposterous. Many of the same interests that have been firing journalists are the same ones hiring lobbyist to voice fearful concerns asking for unreasonable protection. I ask you to think hard about these issues because media is primary social tool. It is built into our founding agreement as a people. Media tools are among the most important components of a free society.  Government does not belong in the middle of these big decisions regulating one of our core freedoms. New business models will not be smartly figured out by government agencies...government tends to protect yesterday's shared values because it reflects consensus associated with lagging interests. Protecting old interests would be terribly unproductive for our society right now. Mature businesses commonly lose relevance when significant new technology comes along. New business models are put to use in order to more efficiently use new technology to serve changing markets. This is natural selection at work in the economy. The businesses that were most powerful in content production and distribution in the 20th century will probably not be the companies leading us in the 21st century unless government is allowed to hold us back using fear because of powerful lobbyists. So, how do we look forward and not backward?

We need crowds of competitively-minded settlers right now; lots of them. Settlers think big and are willing to risk it all to suffer humble beginnings and are capable of moving mountains slowly. The best days of some digital pioneers are already coming to an end...a time when their specific interests are in conflict with the needs of the new settlers. Many 20th century media pioneers feel like they should somehow be grandfathered into this new era. The old business model needs to be updated. Significantly Changed. Pulled Apart. Specialized. The parts will not go away but the fact that some parts will be re-allocated does not ordain ownership of these parts to the old enterprises as if it is royal title being passed down. There are no meaningful pedigrees in business that a market does not support by way of profits.  The businesses of building cars and banking has taught us this lesson many times recently. Failure must have stigma attached or winning means nothing. We are all going to have to earn it in the years ahead. Failing companies cannot be bailed out or we risk creating disincentives through bailouts.

If Congress and federal agencies get out of the way, the free markets will combine myriad new possibilities to produce more efficient content companies. This result will make us all better off than we are today.  We will have journalism, many new jobs, and better forms of communication benefiting our free society.  Right now, it does not matter if you produce journalism or entertainment. The tools we use to get our content products to market have changed and need to be changed much more in order to serve quickly changing communities of content consumers. Most pioneers move away as settlers arrive. A few of them are able to change (evolve) their perspectives and help to build the new communities that rise up around them even though they are no longer part of a powerful regional or local oligopoly.  They adjust and change with the new shared values around them. When you think about this, one thing is very clear: It's time to change. Are you ready? 

The end of this post is where I might begin a meaningful comparison of Google and Apple as both pioneer and settler. I'll save that for another post. Which do you think is more likely to adjust to settler lifestyle? The answer might surprise you.

Wired Magazine highlights how the settler mindset acts

iroM: follow up comments (at very end) of this post link 11 02 10

Why Pioneers Have Arrows in Their Backs