Old Media, New Media and Where the Rubber Meets the Road

by Mark Sigal | @netgarden | comments: 11

Analog (old) media is all about managing scarcity by controlling distribution, the net effect of which is to enable publishers to price access to their “toll roads” as they see fit.

Digital (new) media, by contrast, is premised on the assumption that the tools for content creation, selling, distributing and marketing enable meta-professionals and prosumers to create a surplus of “good enough” content.

This content, in tandem with un-tethered distribution and pretty good search/retrieval functions, operates in complete disregard for the old media-based pricing models that preceded it.

As such, when the forces of analog media collide with digital media, as they have in music, newspapers, yellow pages, books and magazines (and are beginning to collide in television and movies), a brutally efficient “creative destruction” process occurs.

Simply put, if the digital forces can assemble a “good enough” version of the un-tethered content, then in most cases, the analog media provider is in deep trouble (read: devastating business model disruption).

Understanding Media Disruption

My once-beloved San Francisco Chronicle has been “hollowed out,” reduced to a thin pamphlet, thereby accelerating their subscriber attrition.

Why PAY for content that is less deep, less differentiated than I can get online elsewhere for FREE? It's a vicious cycle.

My once-favorite local news station, KRON, no longer has sports on the weekends; it runs more syndicated content and requires that its reporters operate their own cameras to minimize cost. It's definitely struggling. KNBR, which is the sports radio station that I listen to, tells a similar story.

Do you even know anyone who actually uses the Yellow Pages anymore? That would have been unfathomable when I was growing up.

Now, Google is the Yellow Pages.

On some level, it really is as simple as saying that Craigslist killed the classified ads business, which in turn, killed the newspaper business.

The music business was once supremely cool. Records were cool. The whole chain between record producers, tour promoters and record stores was pretty cool.

Remember record stores? Whither Tower Records. Heck, even Blockbuster is standing on some wobbly legs.

Strangely, it's not that the music suddenly is less good. In fact, I probably listen to as much music as I ever have.

It's just that the "disruption" cow has left the barn (and is living in my iPod), and there is no turning back.

In this case, there are just too many incentives for the performers to maximize their online availability and shift their monetization to other sources, like touring and merchandising.

As a result, the music producer/promoter has been pushed to the backseat (for now).

(Un)Differentiated Media

It seems that the only safe havens are highly differentiated media creators that can’t readily be replicated elsewhere, such as the type of original programming one sees on HBO (e.g., check out: True Blood); the vertical/demographically targeted cable channels (where old media distribution rules still promulgate); and big budget movies, where production values (and production costs) are out of the reach of meta-professionals.

That is what makes the furor playing out with AP, all the more interesting.

AP is a syndicated content and news distribution service that makes its money offering infill content to (traditionally) analog media sources.

In the online world, however, the digital form of AP’s fee-based media is fodder for enabling digital publishers to link to, reference and excerpt from these same stories, typically without paying a nickel to AP.

Now, AP wants to turn back the hands of time by limiting/restricting access to and usage of that content.

Meanwhile, digital media advocates are citing fair use, and you just know that this can’t end well for AP, as their product is fundamentally undifferentiated.

That is not to suggest that they have no case, at least karmically speaking, but it's akin to arguing about oxygen. This is the atmosphere that they operate within.

The media industry would have to exercise a collective re-set to turn the tide on this one. Maybe they will, but I am skeptical.

Re-thinking The Audience and Your Product

Extending the conversation further, Fred Wilson’s post, ‘Monetize The Audience, Not The Content’ (read the comments section) presents a conundrum.

On the one hand, I totally agree with the objective of building your business around your audience.

But, I also think that a true solution needs to reconcile how the product or service evolves to achieve differentiation in such a universe; and that is a bigger challenge.

Here, my specific assertion is that while not all content is created equal, a whole heck of a lot of it is fundamentally undifferentiated.

In the case of The New York Times (a high profile pub that Fred regularly writes about), there are a few star writers, but none of which are such must-reads as to drive users to pay for access to them (hence, the failure of NYT's Times Select).

I love reading Frank Rich; Maureen Dowd is pretty entertaining; and Thomas Friedman is thought-provoking. Plus, there are 6-7 other times throughout the month that I find myself reading a Times article.

But, I've seriously never considered paying for access to them, and when the Select thing was in effect, and folks like Friedman were behind lock and key, I mostly forgot about them.

Case in point, whatever happened to Howard Stern after he left broadcast radio? Is the King of All Media even relevant anymore?

Don't tell me how much he is worth now. Tell me this. What happened to his audience?

It's a hard truth, but while there are 10+ good “enough” quality news/opinions sources for every news story of the day (and they are easy to find and well-indexed vis-a-via Techmeme and Google News), there is no "good enough" cheap/free alternative to the Ridley Scott directed, Christian Bale starring action movie.

As such, the NYT’s of the world face a real paradox. Their brand is their content, and without continuing to cultivate their content and innovate the way it's presented, which costs money, they have no durable audience.

Thus, I think a better path is to:

1. Come up with well-defined linkages between online and offline workflows. For example, print subscribers get access to deeper analysis, better tools for saving, excerpting, sharing and finding related content;
2. Create new types of media/engagement units that reward loyalty, communit-ize it, perhaps game-ify it;
3. Re-think segmentation (and pricing) across high-end, low-end, hyper-local, and vertical-specific distinctions, and re-work the product accordingly.

Apple, Record Labels serve up 'Cocktail'

So it seems fortuitous, that as I am updating this post, word filters into the blogosphere that Apple's long-rumored Tablet computing device is due in September (the Friday rumors said Q1, 2010), and that Apple is working with the record labels to re-invent the packaged music experience for the digital realm. Smart!

Here's an excerpt from the article:

Apple wants to make bigger purchases more compelling by creating a new type of interactive album material, including photos, lyric sheets and liner notes that allow users to click through to items that they find most interesting.

Consumers would be able to play songs directly from the interactive book without clicking back into Apple’s iTunes software, executives said. “It’s not just a bunch of PDFs,” said one executive. “There’s real engagement with the ancillary stuff.”

New York Story

Ending where we began, creative destruction has had a field day with the media business (and by virtue of its association, advertising as well).

To get to the other side intact, the NYT’s of the world have to figure out what they are that a focused, less expensive blogger, prosumer or meta-creator can’t emulate.

With brutal efficiency, this truth will separate those that can meaningfully, unquestionably differentiate from those that can’t.

Prognosis: more hurting ahead; then the industry finds its footing, begins a renaissance, and gets back on offense.

Related Posts:

1. Digital Media Rules: The Open Sourcing of Information
2. Apple, the ‘Boomer’ Tablet and the Matrix
3. How Social Media Works: It's About Breadcrumbs and Conversations
4. The Programmable Fan Site: A New Media/Ad Unit Model
5. Flip Video News Network: Crowd-Sourcing meets CNN

My Netbook Took Me Back To Windows

by Brady Forrest | @brady | comments: 17

When I left Microsoft I switched to a Macbook Pro and didn't look back. I never thought that I would use a Windows machine regularly again. Then I got an Asus Eee PC 1000h (10.2 in screen, 1.6 GHz Intel Atom N270 Processor, upgraded to 2GB RAM; I judge it to be on the larger end of a netbook). For three weeks it was my sole computer. It runs XP and that is just fine for what I expect from a netbook.

How is the netbook different? It is a secondary machine that knows its place. It is not as powerful as my Macbook nor is the workspace as big; I am definitely less efficient on it. I got it for its size and price. The 10 inch screen (1024x600 resolution) is fine for most work. The weight (3.2 lbs) is a relief for a traveller. And ringing in under $350 (with discounts and Live Cashback) it is an affordable luxury. In fact the price makes it almost disposable. Not disposable in a throw-away fashion, but in a if it gets stolen, lost or ruined while I am on the road it will not be the end of the world or a costly item to replace. It's a machine that I can throw in my backpack when I go out for the day and not worry too much.

During my three week of travels I used the machine primarily for browsing the web, answering email, managing photos and watching video. It has a tiny screen, but I sought software that left as much room as possible in the workspace. Chrome, for example, takes up very little screen space with toolbars. I switched from the clunky Zimbra Desktop client to Windows Live Mail (a really well-designed mail client if you can overlook the lack of smart folders and a couple of quirks).

My other major criteria for software was the ability to sync off the machine. Other than when managing media I tried to never save directly to the file-system and only to the web. The netbook will never be my main machine and I do not want to "forget" a file on it. I relied on Evernote to record my notes and save them to the cloud.

To make the machine more reminiscent of my Mac I installed Launchy. It's an extendable application launcher like Quicksilver. With Launchy I never use the Start Menu.

This is not to say that I didn't find the computer limiting. I was unable to install Valve's Portal (most likely due to the integrated graphics card) and video occasionally stuttered on the machine. I try to keep a minimum number of apps open to prevent the machine from slowing down.

Instead of XP I could run a Linux variety or Mac OS X. I do dual-boot with Ubuntu-eee, but it is not my primary OS. As you can see in the screesnhot it is very icon heavy and does a good job of being user-friendly. However, the OS lacks the client software that I need (no Chrome or Evernote client). Soon there will be another Ubuntu designed specifically for netbooks. According to Techcrunch Tariq Krim is developing Jolicloud, but without more information I am not certain how it is different from Ubuntu-eee - based on screenshots they look very similar.

I ultimately chose XP because it stays out of the way, it has the software I want and it lets me get the job done. I am not sure that it will keep me. Chrome will be coming out on Linux. Evernote (and other clients) could opt to develop across all platforms. New netbook-oriented OSs are going to be designed with a netbook's characteristics in mind.

(It's being reported that Dell will start penalizing users for selecting XP over Vista to the tune of an extra $150. It's interesting to note that Dell does not offer Vista as an option for the Dell Mini, its netbook offering.)

(Ubuntu-eee screenshot courtesy of ubuntu-eee.com)

Update: In the comments Corey Burger provided some interesting information on Ubuntu-eee: The icon-heavy launcher is built by Canonical and is called the netbook-remix-launcher or ubuntu-mobile-edition launcher, depending. Ubuntu-eee is basically just that plus a few tweaks. Coming with Ubuntu 9.04 will be official images/isos for all sorts of netbooks.