In the world of traditional media everyone is running scared, as old advertising revenues are declining as advertisers follow the trend of users going elsewhere.
One recent example is Telegraph Media Group - publishers of The Telegraph and The Sunday Telegraph, in 2008 their revenues fell by 3.2% to £343.4m this is one example amongst many.
Yet this shift creates an opportunity for media companies. Historically media companies were able to make money because they owned the means of distribution. It was capital intensive to create distribution - whether paper (printing presses, networks of newsagents) or broadcast (radio licenses, broadcast towers). Thus media companies consisted of two key parts
- Distribution businesses
- Content & editorial businesses that took advantage of the distribution advantage
With the rise of digital media, the advantage that these businesses have over distribution is going away. Anyone can create a distribution channel - even this humble blogger has readers in 41 different countries.
So where does the value remain?
With Google it's easy for anyone to find content - and that raw content doesn't have much value, but if we look at the role that Google is playing in this market for content we get an insight.
Google acts as the "editor" of the content here - each time you write a search query you get a personalised, focussed set of content that may interest you. This editorial process is valuable to consumers - look at the usage that search engines get.
There are other "editors" in new media - Twitter acts as a form of crowd sourced "editing" - driving traffic to content. This blog gets more traffic from Twitter than from Google.
Understanding that the editorial process creates value, and that consumers connect the brand (Google, Twitter) with that value is a powerful insight for old media brands.
They have a valuable asset - in their brand, and their editorial process, and they have the opportunity to leverage that brand in the shift to digital distribution. As more content is created, the challenge for consumers of finding interesting, high quality content increases, and consumers will turn to their trusted brands to provide filtering for them - whether it's Google's accurate search engine, Twitter's crowd sourced comments, or the Financial Times' industry reporting and analysis - the value comes from the connecting the consumer with valuable content. As PwC have outlined in their report on Global Entertainment and Media Outlook "Stop talking about the demise of newspapers, start talking about the rise of news brands."
Media companies need to focus on enabling consumers to easily access their content, wherever, whenever in a high quality way, and take advantage of their strong brands from the old media space to build strong, trusted brands in the digital economy.
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