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The State of Media Transformation

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The State of Media Transformation

Advancements in technology have fundamentally changed the way the media industry operates.

Initially, the rise of broadband speeds in the early 2000s created fresh opportunities for media companies and advertisers to engage their audiences in new and exciting ways (see: loud autoplay video adverts).

As consumer internet use transcended the purely functional, users turned to platforms like YouTube and Facebook for entertainment and distraction. Easy access to a huge volume of high quality content led to a massive shift in consumer expectations. Internet users went from being satisfied with grainy videos and long html webpages to wanting rich, interactive content at zero cost and with no delay.

And for the most part, they got it. When video streaming became widespread, film and TV distributors moved to capitalize on the opportunity, using the internet to cut distribution costs to near-zero. Physical stores like Blockbuster were forced to adapt or be destroyed by the turbulence of industry innovators.

Similar stories can be told of mainstream broadcasters and publishers. The term ‘pivot to video’ has wafted into most marketing publications at least once over the past year – intending to describe publishers’ increased focus on producing original video content.

As consumers came to rely less on daily broadsheets for news and entertainment, print media too was forced to adapt. Newspapers were no longer the sole source of information and they now had to fight to be heard amongst the noise online.

There’s no doubt that technology has changed the media industry [1] – and the audience it serves – forever. But as time has shown, there’s no end to disruption. So what’s next?

Publishing, print and social media

To understand the future of media transformation [2], first we must look back to the advent of the internet. Print media, arguably the lowest hanging fruit for digital disruption, was one of the first to feel the effects.

Back in 2001, Bill Gates published an article entitled Content is King [3] that contained some predictions for the publishing industry, and how evolving technologies would change it. Reading it 16 years later, it’s amazing to see how many have come to pass. Here’s an interesting excerpt:

“Printed magazines have readerships that share common interests. It’s easy to imagine these communities being served by electronic online editions.

But to be successful online, a magazine cant just take what it has in print and move it to the electronic realm. There isn’t enough depth or interactivity in print content to overcome the drawbacks of the online medium.

If people are to be expected to put up with turning on a computer to read a screen, they must be rewarded with deep and extremely up-to-date information that they can explore at will. They need to have audio, and possibly video. They need an opportunity for personal involvement that goes far beyond that offered through the letters-to-the-editor pages of print magazines.

A question on many minds is how often the same company that serves an interest group in print will succeed in serving it online. Even the very future of certain printed magazines is called into question by the Internet.”

In other words, Gates saw the potential for interactivity in an online environment as a fundamental threat to publishing. This has come to pass in one sense – articles published on news websites garner hundreds of comments from users responding to the content. But social media has been the real driver of interactivity in this context.

The ‘communities’ Gates references are housed not on the publication’s website, but on the Twitter, Facebook and LinkedIn pages that act as an extension of the publisher’s brand.

However, the website, much like the front page of a newspaper, remains the crucial channel for monetization. New technologies have evolved the opportunities and scope for online advertising [4] massively, but the core concept remains the same. Engaging content brings eyeballs – something brands are willing to pay to feature alongside. Gates comments on this, too, in his article:

“For the Internet to thrive, content providers must be paid for their work. The long-term prospects are good, but I expect a lot of disappointment in the short-term as content companies struggle to make money through advertising or subscriptions. It isn’t working yet, and it may not for some time.”

In the long run, advertising is promising. An advantage of interactive advertising is that an initial message needs only to attract attention rather than convey much information. A user can click on the ad to get additional information-and an advertiser can measure whether people are doing so.”

The key benefit that differentiates online content from print can also be seen in online advertising – interactivity.

Online advertising, and the marketing technology that powers it, can now give advertisers things they wouldn’t have dreamed possible 10 years ago. Advanced targeting, retargeting, segmentation and attribution [5] has made it easier than ever to find the right person in the right place at the right time. At the same time, the advert itself can offer an experience that is engaging rather than simply interruptive.

Let’s return to Bill for a second:

 “…to be successful online, a magazine cant just take what it has in print and move it to the electronic realm.

Text-based editorial articles are still widespread in publishing as they’re cost-effective to produce and relatively easy to consume. But as the feasibility of small-scale video production increase, the publishing industry becomes better placed to realize the full potential of video.

We are already seeing mainstream publications begin to focus more on video content. Vice, for example has transitioned from a relatively underground print-only publication to media platform offering a wealth of original video content.

As a medium, video has some huge advantages – particularly when it comes to marketing and distributing. Recent statistics show 92% of mobile video viewers [6] share videos with others, and Wordstream estimate that video drives a 157% increase in organic traffic [7] from SERPs.

Film & television

For traditional publications who were willing to be agile, there was a big opportunity. But the film and television industries, offering their content online was critical.

This was driven partly by changes in the market. Increased urbanization meant that millennial audiences prized media that offered convenience and instant access. Consumers also wanted easy access to international content, such as TV shows produced and released in the US before they were distributed worldwide.

Increased demand and decreasing distribution costs meant content production accelerated, ringing in the new Golden Age of Television [8], where critically-acclaimed TV shows like Breaking Bad, Game of Thrones and The Wire fought for consumer attention. Between 2011 and 2016, the number of scripted TV shows across broadcast, cable and digital platforms increased by 71% [9].

Although both starting out as DVD-by-mail companies, both Netflix and Amazon Video came into their own with online streaming – offering instant, anytime access to huge libraries of high-quality content and ultimately changing the market forever.

However, these companies still relied on others to produce the content they were distributing. The cost of licensing was a considerable restriction of a distribution-only business model. So, in late 2011, Netflix commissioned their first original series, House of Cards. Released in 2014 to great critical acclaim, it marked the beginning of a glut of highly-regarded series, including Orange is the New Black, Stranger Things and Narcos.

Of course, Amazon Studios were quick to respond, releasing shows including Bosche and The Man in the High Castle in 2015 and 2016 respectively, followed up by another critical success in 2016 – this time a film, Manchester by the Sea.

Traditional producers responded, too. Disney, for example, decided to distribute its own content in a closed ecosystem, pulling everything from Netflix’s platform onto its own streaming service. The move signaled a growing rift in the industry, compounded by Netflix’s announcement of their plan to increase their spend on original content to a whopping $8bn [10] – aiming to make its library of content 50% original by 2018.

Whats next?

Across all media channels, personalization will be a key trend in the coming years.

For TV, instant-access streaming has increased the number of hours viewers are able to consume during a week. But this number is still finite, and we are rapidly reaching a point where there is simply too much content for viewers to feasible choose from.

This creates a demand for curation; a way to filter available content according to your preferences and viewing habits. Netflix and Amazon both already offer this via machine-learning algorithms, using hundreds of data points and some very complicated math [11].

However, better recommendations require more data. Although consumers appreciate the benefits of a service tailored to them, there is also a growing awareness of data security [12]. GDPR, the impending regulatory change in Europe, is in response to this sentiment and will foster huge change in the way companies handle customer data.

The second key trend is fragmentation. People are consuming content across multiple channels – TV, online, on their mobiles and even via games consoles. For brands to successfully engage attention-poor audiences, they must provide a consistent experience across all channels. For TV viewers, shows are often augmented by a second screen; another opportunity for content creators to engage their audience.

For publishers, the future is less certain. If Bill Gates is to be believed, traditional brands may not exist at all in 10 years, ousted by techy upstarts. More likely: publishers will find a middle way between original, short-form video content, mobile-optimized articles and other types of interactive content (such as chatbots). Despite the industry’s focus on video, there is still a demand for news and editorial in text format.

Technology has been a catalyst for rapid change in the media industry, which has been a significant challenge for some brands. But it has also enabled a huge amount of high-quality content to reach audiences at minimal cost. It has fostered relationships between small-scale content producers and big publishers, and improved the experience of users worldwide.

One thing is for sure: disruption doesn’t stop here.

Related reading

References

  1. ^ media industry (www.clickz.com)
  2. ^ media transformation (www.clickz.com)
  3. ^ Content is King (www.craigbailey.net)
  4. ^ online advertising (www.clickz.com)
  5. ^ attribution (www.clickz.com)
  6. ^ 92% of mobile video viewers (www.wordstream.com)
  7. ^ 157% increase in organic traffic (www.wordstream.com)
  8. ^ Golden Age of Television (en.wikipedia.org)
  9. ^ increased by 71% (en.wikipedia.org)
  10. ^ whopping $8bn (www.theverge.com)
  11. ^ very complicated math (medium.com)
  12. ^ data security (www.clickz.com)
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