Originally posted on 6 A.M.
We had a Media Future panel at the Edelman Global Leadership meeting this week. Two of the participants, Jonathan Miller of Newscorp and Chrystia Freeland of Thomson Reuters, had particularly acute observations about the way forward for their industry. So did Matthew Bishop, who addressed our team on Wednesday evening.
- Evolution of Three Segments—Miller and Freeland agree that mainstream media must have a dual revenue stream from advertising and subscription in order to thrive. As the MSM segment begins to charge for content, there will be an even faster rise of the insurgent niche, featuring media such as The Huffington Post. They have tiny distribution costs and small infrastructure of reporters. The third segment is professional service entities such as Bloomberg or Thomson Reuters, who charge high prices to their clients. “The question becomes how much ankle to show in the consumer space in return for ability to attract better reporters and better sources,” said Freeland. Note that Bloomberg makes available its content to the public on Bloomberg.com fifteen minutes after it is posted on the terminal and that only 8% of stories written by Bloomberg reporters make it to the public site.
- Rise of New Digital Brands That Integrate Backward into Print—Miller spoke about Politico, which “has a print vehicle where they make most of their money via advertising. They are really superb, with true authority. They could start to charge for their digital content.”
- Commentary More Valuable than News—In an informal poll of Edelman executives at our leadership meeting, the most frequently cited names of “must read” journalists were columnists Thomas Friedman and Maureen Dowd. “Commentary is more valuable than commodity news,” Miller said. “But there is an ever shrinking time frame for readers between news and expectation of views”. Freeland said that there is growing tension in the newsroom between beat reporters and their more celebrated editorialist colleagues. “Tom Friedman wants his content to be free so he can sell more books and deliver more speeches. Meanwhile the business side of the media is installing pay walls.”
- Power of the Tablet—This is rapidly becoming the fourth screen for media, along with the TV, PC and cell phone. “There will be 40-60 million units in use in the USA within two years,” Miller asserted. “This will change behavior. It is a terrific opportunity for print, both newspaper and magazine, to reinvent itself with a dual paid and free content model.” Freeland sees that video is the key accelerator for mobile devices. “Youth want visual content; video with text.”
- Three Paradigms—Miller discussed the Mark Zuckerberg web media structure, with the first being linking web sites to each other (Google), the second being applications – especially games (Zynga), the third being the people centric web (Facebook). He is trying to reposition MySpace in the “what you are actually interested in” niche.
- The Power of Consumer Voice—Fox just held auditions for Glee, my teen daughter’s favorite TV show. Candidates had to create videos to enter; 37,000 were posted in three weeks. Then over 100 million votes were tallied to find the winners.
- Downward Pressure on Pricing—In prior periods, the media companies were content creators and distribution owners. Now the two competencies are separating. “Apple is really a seller of mobile devices,” said Miller. “They want songs to sell for 99 cents. In fact, iTunes is a break-even business.” The continued squeeze on content producer revenue by distributors is best exemplified by Google, “who think that media is free.”
- Ultra Premium Brands–The Economist Magazine, according to its US editor Matthew Bishop, expects its readers to devote two hours to each issue. “Our bargain is that you will be truly informed for that investment of time. We don’t see other media as competition. We are competing against other options for your Sunday afternoon leisure time.”
We will have to move ever more quickly to adapt to a world where the extended universe of media is more segmented.
Image credit: Robert Scoble and dkleinst
