Posts about Media

My Assignment Zero interview

I was interviewed via email for NewAssignment.net’s assignment zero on crowdsourcing by Neal G. Moore, director of community relations at Indiana University’s School of Informatics. I’ll put up the first exchange. If you have better answers — or better questions — please join in.

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Chaos 2.0

I’m late to this since my AdAge subscription lapsed, but Bob Garfield (of On the Media and Ad Age) has written an important followup to his seminal Chaos Scenario two years ago. In the original, he argued that advertisers saw the decline of old media but that new media weren’t ready for them (as we indeed are not — see my AdAge column on the topic) — and so the advertisers are left without the means to market. In Chaos Scenario 2.0, Garfield argues that marketers have new ways to do their business directly with customers that no longer require advertising. He warns of “the post-advertising age.”

This is fundamental and important. In media, we have long argued that a new medium does not replace the old one and that ad spending may shift around in new mixes but do not decrease. No more. Now marketers and customers can have their transactions and conversations directly. That is to say, we the customers can get the information we want about products straight from sellers and the more that happens, the less those sellers need to waste money on giving us messages we did not ask for and do not want (aka, advertising). The more that happens, the less money they will spend on ads. Total ad spending will, indeed, decline.

That horrible crashing sound you hear is a gravy train derailing.

Media — news and entertainment — have long been supported by advertising and by the faith that even though it may be a zero-sum game, at least there were billions of dollars of support there for the earning. And profitability for those who got those dollars was very high because of scarcity: scarce space, scarce time, and now scarce consumers. What if there is less? What happens in post-scarcity world? What happens to the media economy? What happens to us?

I’d say that depends on who the “us” is. If it’s big, expensive, monopolistic, overpriced media giants — TV networks, TV studios, radio companies, newspaper companies — they are guaranteed to shrink radically and rapidly. They are screwed. But if “us” is new, small guys who are not addicted to big production luxuries — for whom the definition of big enough is many, many times smaller — there is still plenty to go around — but only if, again, we have the infrastructure in place to make it make it easy for advertisers to support us. We little guys are stuck in Chaos 1.0; we’re not ready for the advertisers. The big guys are stuck in Chaos 2.0; they’re seeing advertisers find better alternatives. And if we’re all not careful, the pie will, in fact, shrink. That’s new.

Says Garfield:

It’s a world in which Canadian trees are left standing and broadcast towers aren’t. It’s a world in which consumer engagement occurs without consumer interruption, in which listening trumps dictating, in which the internet is a dollar store for movies and series, in which ad agencies are marginalized and Cannes is deserted in the third week of June. It is a world, to be specific, in which marketing — and even branding — are conducted without much reliance on the 30-second spot or glossy spread.

Because nobody is much interested in seeing them, and because soon they will be largely unnecessary. . . .

He recites a requiem litany in the media business since his first chaos piece: MTV, Time Inc laying off. . . CBS spun off from Viacom “lest the broadcast business impede growth and depress shareholder value” . . . broadcast networks shutting out their distribution partners to give us shows directly online. . . NBC giving up on the 8 p.m. hour to give us dreck . . . big, bad Clear Channel doesn’t take over the world but is taken over by private equity. . . Knight Ridder and Tribune melt like witches on water and McClatchy doesn’t turn out to be in Oz. . . DVRs will reach half of U.S. households in three years and once we’re all skipping ads, advertisers say they’ll skip TV. . . TV upfront is down. . . Coke and J&J pull out of upfront. . .

Yup, screwed.

But marketers aren’t crying, or shouldn’t be. He continues:

What is certain is that the Brave New World, when it emerges, will be far better for marketers than the old one. What is nearly as certain is that many existing ad agencies and some media agencies will be left behind. And the reason they will be left behind is their stubborn notion that they can somehow smoothly transition to a digital landscape.

He argues that TV has been kept afloat artificially:

But TV isn’t really in the program-distribution business. It’s in the audience-selling business, and there the economics of scarcity still stubbornly reign. Because no other medium offers the reach of TV, advertisers have continued to pay more and more per thousand viewers — which is why Mr. Moonves is commanding higher CPMs; the upfront market has not yet plummeted; and video advertising on the internet, according to eMarketer, will amount to a paltry $775 million in 2007. On TV, it is $65 billion.

But economics will have its due. The law of diminishing returns will eventually prevail. Those who have perennially spent more and more for less and less will finally say, “No more,” and take their money online — whether there is sufficient ad inventory or not. . .

Mass advertising flourished in the world of mass media. Not because it was part of God’s Natural Order but because the two were mutually sustaining. . . . So why assume that either must transition to the new model? Not only is it economically nonsensical, it squanders the very nature of the digital universe, the ability to speak with — not to, but with — the narrowest communities and individuals themselves.

And they will use new methods that have nothing to do with advertising: Word-of-mouth, social, or just direct contact with customers who want information and can now get it from the marketer or — see my favorite example, my Treo — from fellow customers.

Garfield cites the story of an OgilvyInteractive creative director who didn’t buy ads to give away 45,000 tockets for Six Flags’ 45th anniversary; he posted on Craigs List and after five hours, the tickets were taken. But who gets paid for that? Not even Craig.

Garfield predicts some of the means of death of old media and agencies. I’m not sure he’s right about them all. He heralds — as I’ve heard heralded for more than a decade now — that we’ll watch a TV show and click on a car to buy it. I don’t buy that. He argues that we’ll end up paying for more content, supporting it with our money instead of advertisers’. Not sure I buy that, either. But I do agree with this arguments that we don’t like ads, we do want information, and we are in control.

And what he’s really saying behind all that is that the fundamental economics of media are, if not imploding, deflating. That is a big deal and has implications we can’t yet imagine in media and marketing as well as in the proliferation of small media that can afford to live without big marketing — if it’s ready. Hang on. It’s going to be a bumpy ride. Downhill.

Me vs NYT at OPA re WWGD


Rafat Ali just put up this video of a discussion from the Online Publishers Association in London last week: me v. Martin Nisenholtz of the New York Times Company. Unfortunately, it starts a little late (missing my start to the discussion). and ends a little early (just as Larry Kramer, ex of CBS, is talking about Dan Rather).

At the start, I reacted to a presentation by Jeffrey Rayport, high-IQ industry consultant, who tried to present a new architecture of media that on the one hand I endorse but on the other hand wanted to turn inside-out. Rayport talked about owning audiences still and I gave the predictable if obnoxious blogger argument (joking that I was daring to speak for all mankind) that we’re not an audience and we don’t want to be owned.

Rayport set up boundaries and talked about going over those boundaries — inside out, from media to us; outside in, from us to the media — and I argued against that architecture, saying that he was making the mistake of still putting media at the center when, in fact, the public is at the center and media should see itself at the edge, serving us.

I talked about Yahoo as the last old media company to look at the world this way (along with all the older media companies): ‘We control content. We market to get you to come to us. Then we feed you as much advertising as we can, until you leave.’ That’s the centralized model of media. I contrasted this with the decentralized, distributed model embodied by nobody better than Google: ‘We go to where you are and put service and advertising there. Your pageview is then our pageview. And we have enabled you to do what you want to do. And we can all do more of it.’ I argued that media companies should ask WWGD — ‘what would Google do?’ (and, yes, Google is the new God).

That’s when Martin objected; the videotape picks up there. Raftat says:

This was at the OPA Global Forum last week in London…I was sitting behind Martin Nisenholtz, the CEO of New York Times Digital, and recorded this with my Nokia N80. It is a nuanced argument, something which doesn’t really come out in this video, or Martin’s argument there. Here is my read on it: Martin thinks Jeff Jarvis is the extreme in this journalism vs bloggers debate–especially when it comes to mainstream news sites working with bloggers and aggregating and pointing to them, working with them, and bringing them onboard–and was trying to point to a middle ground, something which he thinks NYT is doing, when in fact Jarvis is that middle ground, if you peel the layers behind some of his hyperbole. Either way, it is an important argument, though some of it is pure theater, done for the sake of it.

Yes, it was theater. But Martin and I agreed (via Treo-to-Blackberry exchange right afterward) that we were also disagreeing about something more fundamental or at least refreshingly different from the old blogger-v-msm debate. We were arguing about the centralized-v-distributed architecture of media. Martin is arguing that some media brands — yes, the Times — are worth coming to. He supports the outside-in model and sees The Times as ‘in’. I say that they all — yes, even the Times — must look at new ways in which we can do more. Yes, I do think mine is the middleground for it’s about working together in new ways that were never possible before to do more than we ever could before. (And, yes, I just ignored the blogger slaps. I say on the tape that I dream of the day when I can go to a conference and not have that old spat; it’s so tired.)

: Howard Owens responds.

In it, you get to hear Martin Neisenholtz reveal just how little he understands blogs, and how trapped he remains in Big-J thinking about what blogging is and its role in the mediascape. It’s a little surprising that a major media leader would still hold those views. Martin seems fully invested in the false dichotomy that there is a bloggers vs. journalist competition, rather than seeing the ecosystem as it exists. The telling point is his comment to Jeff Jarvis that “there is absolutely no check on you.” At least Carolyn Little gets it. “Bloggers help keep us honest,” she says. And the message Neisenholtz needs to hear from that is that bloggers keep each other honest, too. In distributed media, there is no us and them; it’s all we.

: Oh, and I will respond to Martin’s stock insult in the video that I’m a blogger not a journalist and so I don’t do journalism here, only opinion. Well, while I was in London for that conference, I went out and reported this piece about the Conservative leader’s web strategy and this one about a new online talk channel and this one about big changes at the Guardian (exclusive, as we used to say, meaninglessly) and this one about innovation at the Economist and this one about the new Telegraph newsroom and structure (for the first time on video, we used to brag, in big old media).

It’s conferences that are about only opinions, often wrong.

Not not getting it

At yesterday’s Guardian meetings (blogged below), editor-in-chief Alan Rusbridger said, “Everybody now gets it.”

A few days ago, a blogger (whose link I can’t find now) took me to task for saying that mainstream media people “don’t get it.”

Does everybody get it now? Well, I’m not sure. But I do think it’s time to give up accusations of not getting it. I’ll plead guilty to using the phrase too often. And I’ll admit that it was pretty self-important. So I’ll try to get rid of not getting it. That won’t be easy; I have to confess that as I read some news stories about the news business in the last 36 hours, the phrase came to mind two or three times. I bit my tongue.

I think that – especially after the last year’s cold reality checks and volcanic change in the newspaper, radio, TV, and magazine businesses – everybody does get that the past cannot be preserved. Everybody knows now that change is inevitable. And everybody – which includes me – is searching for the right moves to make next. Is everybody innovating enough, fast enough? No, but I think everybody realizes they have to.

Got that?

Guardian column: YouTube is good for TV

Here’s my latest Guardian column (nonregistration page here). It’s about Viacom pulling its clips off YouTube but what it’s really about is the end of control as a media business strategy:

The days of doing business by telling customers what they cannot do are nearing an end. If your customers want to watch your shows, listen to your songs, read your news, or play your games, can you still get away with telling them they cannot unless they come to you and use your devices, pay your fees, and follow your rules? That could work in a scarcity economy in which you owned all the stuff and the means to get it. But no more. Business isn’t about control any more.

The wise company today will go with the flow of the public’s desires and try to figure out how to make money by helping them do what they want to do. That may sound obvious, but it’s not how media work. In the age of consumption, control was what media were about. In the age of creation, they should be about enabling.

Take Viacom. The American media giant – owner of MTV, Comedy Central, iFilm, Paramount, and much more – followed the old rules this month when it demanded that YouTube take down 100,000 clips that viewers had put up there. Mind you, Viacom was quite within its rights, for it controls the copyright to that content. And as a content creator myself, I’m no foe of copyright. It’s also clear that this is a negotiating move on Viacom’s part.

Still, it wasn’t a smart move. And here’s why: the evening before Viacom’s announcement, my teenage son and webmaster brought his laptop to the dinner table – yes, that is what life is like in the home of bloggers – and showed me a YouTube clip of his hero, Bill Gates, being interviewed by my hero, comic Jon Stewart, on Comedy Central’s faux news, The Daily Show. My son had never watched Stewart. Nor does he ever channel-surf the TV. The only – only – way he is going to discover a new show is via the internet, and the best way for him to do that is via YouTube. Yet the next day, that clip disappeared from YouTube and thus Viacom cut itself off from its future audience.

Comedy Central has put clips on its own site and even allows them to be embedded, like YouTube players, on blogs. Fine. But the first problem with that is that the network is speaking to the audience it already has. To attract a new audience – to make up for the free YouTube promotion it has now cut off – Viacom will have to invest marketing money. Control can be expensive. The second problem is that the network, not the audience, is picking the good stuff now. If your audience wants to praise and recommend and pass around your best stuff, why wouldn’t you let them, encourage them, enable them?

At the recent McGraw Hill Media Summit in New York, online mogul and conference keynote star Barry Diller said that “the issue is availability”. The music industry, he said, “stuck its head in the dumb sand for way too long”, but that won’t happen to the video industry because “everybody’s going to make everything available”. The question is where and how. Diller said that producers won’t want to find themselves at the mercy of a single powerful distributor, as they were in the early days of cable TV in the US. Fair enough, but they don’t have to. Their videos can be on their sites and on YouTube; they should be everywhere. Diller argued that Viacom will make money from its clips with advertising, subscription fees and micropayments (the last long-promised and prayed-for but still not materialising). I say he left out the other business model: free promotion of their core business, their network shows.

Rather than cutting off new distributors and promoters, I say that producers should be finding the ways to take full advantage of the opportunities they present. How can you build new audience for free and grow larger than you ever could when you were limited by your own distribution and marketing? How can you enable that growing audience to recommend and share your best stuff? How can you find yourself in a larger conversation – not just in comments on your site, but in the response videos people make on YouTube and elsewhere? How can you use this new medium to find new talent and new ways to make content for less? And, yes, how can you make advertising revenue on the clips that are on YouTube and then on the countless blogs that embed its videos? If, in its negotiation with YouTube, Viacom manages to crack that nut – getting revenue plus promotion plus branding plus content while helping the audience do what it wants to do – then that would be wise, indeed. We’ll see. My advice is simple: find the flow. Then go with it.