Today I have published the first Media Industry Blog report:
The report is available free of charge to subscribers of Media Industry Blog (to subscribe simply submit your email address in the form on the top right of this page).
The Media Format Bill of Rights builds upon a series of concepts and frameworks first discussed in the report ‘The Music Format Bill of Rights’ (which can be downloaded here). Although some principles translate cleanly across other media industries many others have a more complex story. This report looks at just how diverse the challenges are, and makes the case for a media product innovation framework across multiple media industries. Here are a few highlights.
The Future of Paid Content Is At Stake
With the notable exception of games, media industries have failed to translate the digitization of consumer media consumption into digitization of their revenues. Digital revenue shares will continue to either remain stuck in single digit percentages or help pull down total revenues for as long as the digital products they depend upon fail to fully embrace the capabilities of digital interactivity. Digital content products need dramatically reinventing for the digital age, to be built around four fundamental and inalienable principles of being Dynamic, Interactive, Social and Curated (D.I.S.C.).
This is the case for nothing less than an entirely new generation of media formats and products. Products that will be radically different from their predecessors and that will crucially be title-specific, not store or service specific. Rights owners will have to overcome some major licensing and commercial issues, but the stakes are high enough to warrant the effort. At risk is the entire future of paid content.
The Consumption Era Has Yet To Be Monetized
Ever since consumers started downloading from Napster and ripping DVDs and CDs the balance of power across all media industries shifted from media company to audience. The digitization of content consumption is firmly established, yet the same cannot be said of media business revenues. Digitization is transforming consumers’ relationships with content and threatens 20th century media business practices with obsolescence and irrelevance. And yet, even though the PC and connected devices are stealing ever larger shares of media consumption, only the Games and Music industries have managed to convert more than 5% of their total revenues to digital products. And for the music industry it is hardly a success story, with overall revenues declining more quickly than digital can make up for. Underlying the cross-industry inability to successfully monetize the consumption era is a recurring theme: the lack of new products and formats tailor made for the digital age. The Games Industry got it right (witness the continued growth from mobile and social gaming, and the ability of consoles to flourish even as the retail channel perishes) but other media industries have yet to get there. Three core factors underpin these challenges:
- Content scarcity is gone
- Concepts of ownership are fluid
- Consumers consume more yet pay less
Piracy is Both Cause and Effect
Piracy is routinely held up as a root cause for media industry problems but is in fact as much symptom as it is condition. Piracy has flourished in its many forms because it has moulded itself most closely to changing consumer demand. The history of 20th century media businesses can be mapped by format milestones: vinyl, VHS, the DVD, cable TV, the CD. The download and the stream were the first tentative steps towards a new wave of formats and didn’t ever get out of first gear. They are transition technologies that failed to become the holistic format milestones for their age that predecessor formats were. Previous media formats shaped and dictated revenue growth, digital heralded decline. Why? Because the download and the stream are owned by audiences as much as they are by media companies. And media companies haven’t yet realized that because these democratized quasi-formats are fantastic consumer tools they therefore need to ensure their products do more, much more. This is no longer a dubbed-cassette-copy-versus-original-CD arms race. Consumers can create digital content every bit as good as good as that of media companies.
The harsh reality is that convenience, portability and quality are the standards which consumers already get from free and illegal digital content products. Paid content strategy must be founded on going above and beyond these digital basics. Premium digital products and formats must deliver rich and interactive experiences that are:
- Dynamic – always change and update with new content
- Interactive – empower user participation and customization
- Social – place social functionality and connectivity at the core
- Curated – curate discovery and editorial
It would be puerile to suggest that the D.I.S.C. principles apply uniformly across all media types. Applicability varies and of course implementation must be tailored, but the fundamental principles have vital relevance across all major media industries. The media industries are now at a juncture where embracing disruption can save them from perpetual decline and potential annihilation. The paradigm shifts in media industry business models and consumer behaviour have been happening more quickly in the last 15 years than ever before, but these changes are still only a small part of much bigger processes that have many years yet to play out and which will come to full fruition when the Digital Natives generation come of age. D.I.S.C. strategies need pursuing now, before the condition is incurable. Media companies can identify the size of the format innovation opportunity by combining the applicability of D.I.S.C. principles to their industries with the scale of industry-wide disruption they are experiencing (see figure). But acting now rather than later will be the difference between using D.I.S.C. as a catalyst for growth as opposed to an air bag to cushion the blow of a market crash. Timing is everything.
To read the full report, which includes industry-by-industry analysis, simply subscribe to Media Industry Blog using the email form at the top right of this page. If you are already as subscriber but haven’t yet received your free copy please email musicindustryblog AT gmail DOT COM.
Full table of contents of ‘The Media Format Bill of Rights’
- The 20,000 Foot View
- Setting the Scene
- The Media Consumption Pendulum Has Swung Sharply
- (Apparently) The Revolution Will Not Be Digitized
- It is Time to Jump Off The Treadmill
- Digital Does Not Need to Mean the Death of Ownership
- The Media Format Bill Of Rights
- Applying the Laws of Ecosystems to Media Formats
- Building the Future of Premium Media Products
- Applying the Media Product Bill Of Rights Across all Media Industries
- Embracing Disruption is Risk and Dangerous But a Necessity
- We Are In the Per-Person Age, Not the Per-Device Age