I attended the MOB conference this past week, at the HBO building in New York City. The conference was put on by the Newhouse School and was an attempt to take a different approach, to monitoring online business. Instead of focusing on ways to induce traditional, nearly obsolete business models to work online, this conference focused on ways to deduce entirely new, successful media business models based on the realities of 21st century media use.
For one and a half days, three key areas were addressed:
1)How consumers actually use new media;
2)How that usage can inform the development of new media business models; and
3)What tools are needed to implement those new models.
Here is a short recap of the conference.
David Zaslav President & CEO of Discovery Communications:
David Zaslav’s comment that the “key to innovation is paranoia” in relation to innovation in new media rings true. I think thats something a lot of good companies have, the fear of becoming obsolete, which makes them innovate to render themselves obsolete before their competition can.
Other comments include in looking at new media it is not important to look at what technology is going to do for you, not to you. It is important for brands to be relevant in the new media space, or they will lose market share. You don’t have to be the top, or the best in the space, but you need to atleast have a presence.
Finally, he described how one of the mistakes media companies make is to put old media types, who make the money, in charge of new media. In order to be successful, those in charge have to live their jobs and understand and love it.
Lee Rainie Director PEW Internet & American Life Project
Lee Rainie kicked off the event introducing the audience to the word tweckle.
Tweckle – to hackle or berate a speaker on twitter while they are speaking at an event.
Some interesting stats and comments:
82% of Americans have cell phones. 40% of cell owners have smartphones.
People depend on social networks now as “coping” tools. They use social media to make sense of events that occurred in the day.
New is pervasive. 46% of adults use 4-6 platforms on a daily basis to get the news.
80% of adults have cell phones.
33% of cell phone users now get news on hand held devices.
42% of internet users say customization is an important web feature to them, 28% of internet users have customized a news page.
Media has become social: 69% of people feel keeping up with news is a social or civic obligation. word of mouth news has increased because people trust their friends to access what’s going on. 50% rely on people around them for news; 57% share news links; 30% get news via social networks; 6% get news via Twitter.
Social networks matter more as sentries, filters, curators and distribution channels of news
Robert Picard Media economics and business dynamics advisor and analyst:
Picard outlined two business models adopted by newspapers:
1) The classic media model: large audience with low priced or free content sold at high price to advertisers
2) The variant model – smaller audience moderate to high priced specialty content sold at high price based on quality
One thing that these models had going for them was that they had platform loyalty and relatively stable audiences, who were willing to consume average and low quality free content. That is not the case these days. Today, there is an abundance of media and this massive growth in the media supply exceeds the ability of consumers to consume it leading to a drowning out of information and entertainment
One interesting statistic, for every dollar spent on media by advertisers, consumers spend three dollars.
Adam L. Penenberg, Assistant Professor, Journalism Assistant Director, Busness and Economic Reporting:
Penenberg was up next discussing how Viral and Social Media Affect Business Models.
He started out with this startling quote: “There were 1 trillion ads served to US in the first three months of 2010.” (Thats an enormous amount of clutter.) Next he asked how many people present in the audience clicked on ads… one person raised their hand in room of about 100. “I think the ad banner is broke & does not work,” Basically the media industry is counting on something very few of us do(click on ads)
He went on to describe a way for advertisers to reach their consumers. He suggested advertisers market to consumers on a social network when they are in a frame of mind to be marketed to. Google seems to do this extremely well. As consumers, we don’t seem to like ads, and with every new method of distributing ads comes a method of blocking(eg pop-up ads. have pop-up blockers)
The kicker, when we are on social network our levels of oxytocin (bonding chemical) spike, and after being on social networks, they are equivalent to that of a groom on his wedding day.
Scott Karp Co-founder & CEO Publish2 Inc.
Karp discussed how media companies must metamorph.
He started of describing how social media companies value connections and leverage the power of their networks.
He showed a video discussing the actual purpose of the web – (Jay Rosen NYU) – links are meant to connect people, not copyright and property. This is something advertisers don’t understand, the idea of connecting people to content wherever it is.
How can companies create value for consumers… connections.
Facebooks value is that it connects you to everyone you know. Googles value is that it connects you to relevant content anywhere on web
Brands vs networks.
People value networks more than brands. Brands leverage however is that they offer trusted connections.
The biggest problem with media companies is they don’t connect anything. Media brands are islands(disconnected) in the traditional media sense. Karp suggests networking to all the other brands to create a content graph of media brands. Don’t just be on the network, BE the network.
Lee Raine and Robert Picard did a good job of summing up the state of the media industry and the current industry models. It was a nice recap of the disruptive effect of the internet, and the increasing role mobile platforms are playing in the media landscape. They also touched on how the experience is changing for consumers, where they have more venues, locations and platforms to engage and interact with various media objects, thus empowering them.
One interesting point was how there was more transparency of the news creation process but less trust of the coverage, which demonstrates the increasing role social clusters/networks play in society.
All in all it was a good day of describing the current state of the media industry. Look out for day 2.