Media: It is a control thing!

Published 5th October

Partnerships and Joint ventures have to be a way forward.

I previously wrote about how the market opportunity in the new media world will be realised by the those that have grown up around the digital environment – the indigenous – as they are the ones that are most likely to get it and understand how the business models can and will work. These will be individuals that understand the operations of traditional media but are not held back by the need to re-think the traditional business models and operating principles. The traditional media owners still have a very important role to play — they know how to deliver revenue.

The past few years has seen some great media concepts to come to the market, but realistically how many in their current form will be around in say five years. The last five years has given us the likes of Youtube, MySpace, Facebook, Bebo and now Twitter. All have had fabulous price tags attached, yet none have delivered any realistic value (revenue).

The poor commercial performance is not for lack of a great concept or even consumer engagement; all of the players have user numbers measured in millions. They have audience reach. The challenge has been to convert those great product concepts and massive audience reach to a commercial benefit. So far no one player has succeeded. Why is that?

For most it is a control thing. It has to be.

The new players are set on dominating their field and being able to dictate the pace of development. Today is not about control. If it was these services would already be delivering significant returns. A domination approach very rarely works. Businesses should cease to attempt to control entire products or value chains, they should instead become assemblers of the world’s best components. This will enable focus on core business skills and in turn deliver greater overall returns.

The new players have created a new backbone for media, they are shaping the way consumers engage, consume and share media. They have created the new media world.

Most of our traditional media owners have historically made significant revenues but are starting to struggle in the new media world. Most are simply not good at technology and find it challenging to build brand engagement. Consider a media owner like Yellow Pages their business is about conversion and retention of customers, or advertisers. They sell to, process and manage massive volumes of advertisers each year.

The traditional owners are very good at delivering revenue, distribution is their core challenge. The new players are great on distribution, poor on revenue. Surely strong grounds for partnership.

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