Wednesday, 3 November 2010

The Difference Engine: Beyond content

"THE old-media world of newspapers, magazines, radio stations and television networks has a daunting task ahead of it. New-media upstarts like internet TV, social networking, mash-ups, web stores and online gaming—with their ability to stream content direct to smart phones, tablets, e-readers, laptops and game consoles—have begun to eat the green-eyeshade brigade’s breakfast, lunch and tea," the Economist writes.
The problem is rapidly becoming too big to ignore. In a recent survey of some 10,000 consumers, IBM found that the use of mobile music and video increased five-fold between 2007 and 2009, while readership of online newspapers more than tripled. Over half the respondents used social-networking sites like Facebook and Twitter. Two out of five regularly read newspapers online rather than in print. “In terms of digital content consumption,” the researchers concluded, “consumers have clearly moved beyond the trial stage.” And as they do, they take their value to advertisers with them, leaving traditional content suppliers scrambling for lost revenue.

This migration from old to new media is causing the industry to fragment, as publishers, record companies, film studios, television networks and other content creators butt heads with device makers such as Apple and Sony as well as online distributors and content aggregators like Amazon, Google, Yahoo! and YouTube. In the process, established ways of doing business are being overturned, calling into question how traditional content—whether print, graphics, audio or video—is produced and delivered.

The change is actually twofold, and much of the problem has stemmed from a failure to understand this. For one, not only is content going digital but, in the process, it is also becoming connected. This change from linear type and airwaves to interactive bits and bytes has caused the balance of power to shift to those who aggregate and distribute digital content online. Take the way consumers are swapping from printed books, magazines and newspapers to digital versions that can be downloaded to e-readers, tablets, laptops or even smart phones. It is not only bookshops and newsstands that lose from this process. Publishers, too, are suffering as advertisers abandon printed pages and television slots for the online world.

Even when they put their content on the web, though, publishers and broadcasters face the problem of getting it found. What they need is a discovery tool as intuitive and useful as, say, Facebook’s "friends"—something that offers trusted recommendations of what, from the user’s known tastes, he or she will really enjoy. Old-media firms have barely begun to address such problems.

That is what old-school content providers have to learn to do, too. Whether traditional publishers and broadcasters have the ability to indulge in such technicalities, still less the stomach to dirty their hands on downstream marketing, is an entirely different matter. But those that do—and do so as well as the innovative newcomers to the information and entertainment business—will do more than merely survive. Some might even prosper. Here’s hoping The Economist is among them.

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