I recently read a couple of reports that examine the rapidly changing media landscape, its business models and the importance of involving the communities we serve.
The IBM report identifies four primary business models it suggests will coexist through 2010
Traditional media – This model relies on professionally made and branded content delivered through a “walled” conditional access environment and with dedicated devices. This is where most content owners and distributors operate today.
Walled communities – This model is based on distribution of niche and user- and community-generated content within a conditional access environment through dedicated devices. Typically, these are traditional businesses that have expanded their “walls” to include nontraditional features and experiences.
Content hyper-syndication – This model makes professionally produced content available in open channels, without proprietary access “walls” or dedicated devices.
New platform aggregation – This model relies on user-generated content and open distribution platforms. It is arguably the most disruptive model, as neither incumbent content owners nor distributors have legacy advantages here. Most media companies seeking entry will likely have to “buy in” for Speed.
The IBM report came up with 10 recommendations to help traditional companies face up to the immediate threat from the new media world and the eventual collision with their traditional partners. AlwaysOn provides a summary
1 Put consumers at the center of your business
Create a consumer-obsessed culture and place a premium on continuous consumer feedback.
2 Give control to consumers
3 Deliver experiences, not just content
4 Leverage virtual worlds
5 Innovate business models
6 Redefine partnerships, while reducing fallout
7 Shift investments from traditional business to new models
8 Create a flexible business design
9 Determine entry strategy for going “open”
10 Make user behavior a competitive advantage
The report quesitons whether or not traditional media is adapting quickly enough.
The other report is from Piper Jaffray The User Revolution: The New Advertising Ecosystem and The Rise of the Internet as a Mass Medium
1. Global online advertising revenue is exprected to reach $81.1 billion by 2011, representing a 21% CAGR (2006-2011).
2. The User Revolution. The advertising world is going through a revolution, -the "User Revolution" as it is happening primarily with the consumers, who are taking control of content consumption and branding. This trend will cause a significant rise in prominence of the Internet as a major content consumption and marketing medium.
3. "Communitainment." (Ugh!) The Internet has increasingly become a principal medium for community, communication, and entertainment--three areas that have collided together and are impacting each other's growth--generating a new type of activity that Pipper Jaffray calls communitainment.
4. The Internet Is Mainstream. The Internet has become a mainstream media outlet that now rivals traditional media for reach and advertising dollars.
5. Media Fragmentation. The proliferation of online and offline media outlets has resulted in shrinking television audiences and an increasingly fragmented media landscape.
6. The Golden Search. Search continues to gain ground, driven by the rise of search as the New Portal, the increasing use of search in branding campaigns, and the local search opportunity.
7. Google's wide variety of non-search-related products creates a virtuous cycle of brand affinity that drives incremental search volume.
8.Video Ads Could Drive The Next Wave. Internet video ads could become a game changer for large brand advertisers, who are used to the 15- or 30-second TV commercial
9. Internet Usage Patterns Are Changing. Portals maintain the highest reach, but the fastest growing category of destinations is communitainment sites such as MySpace and Facebook.
10. Ad networks are experiencing increased demand due to increasing Internet fragmentation, desire for more targeted inventory, increasing usage of networks for branding, and increased site visibility.
Agencies are rapidly evolving into more sophisticated, technology-savvy entities that combine best of breed offerings.
Companies to watch: Google (and YouTube), Yahoo!, Disney, News Corp, Time Warner, Microsoft, InterActive, Facebook, Craigslist, Brightcove, Yelp, SINA Corp., Baidu, aQuantive, ValueClick, 24/7 Media, Netflix, Wikipedia, MobiTV, Digg, and Hakia to be the most important players to watch.
The finding of the reports should not come as a massive surprise for those who have been watching the developments in our industry.
For me it is, always was and always will be about managing the relationship with those who consume and absorb our content. It’s about developing the audiences’ emotional connection with our brands. The communities around our brands – really define our brands and they need to be nurtured. Our communities are a competitive advantage in a world of search, aggregation, syndication, mash-ups and social networking.