Wetpaint CEO Ben Elowitz on the Future of Digital Media
“Content is king” has been a long-lived mantra of media. And in the 1990s and early 2000s, it was true.
But over the last several years, the Internet has upheaved the aphorism.
It used to be that media was linear. And in that world, content and distribution were married. The HBO channel had HBO content. A New York Times subscription bought you New York Times content. And Vogue and Cosmopolitan each month delivered exclusive and proprietary content from … Vogue and Cosmopolitan.
Until the Internet came along. In every single one of the varied businesses the Internet has touched — from commerce to media to communications to payments — there has been one common impact: disaggregation.
Content and distribution have parted
In the case of the hundreds-of-years-old media business, the Internet has fundamentally separated content from distribution. Today I can watch hundreds of South Park and Jon Stewart clips, all without a cable box — on my Apple TV, my Android phone, or YouTube on my desktop.
But wait, South Park and Jon Stewart? Content is king, you say. It’s now even more free to reign, unfettered by distribution channels!
No; because content is no longer enough. Content has always been a means to an end. And the end has always been audience.
Content isn’t the goal. Audience is.
When it comes to the business of media, there’s no question: advertisers don’t pay to reach content. They pay to reach an audience.
What’s the first item in every brief from every advertiser? It’s not Target Content, it’s Target Audience.
Media has been slow to adjust to this new dynamic. Companies have sunk billions into content management systems — using CMS as the cornerstone of their modernization — under the impression that they traffic in content.
But they don’t. They traffic in audience. And how much have they spent on audience development systems? Not much, if any at all.
Now that distribution of content to audience is no longer linear, distribution decisions are suddenly more complicated. And, at the same time, they are immensely more important — and more dynamic — to create the impact media companies are looking for: drawing an audience! Social distribution can outperform search, if you use it wisely. Day-parting your postings can boost post performance by 100 percent or more. Packaging can triple the effectiveness of content in reaching an audience.
And yet, few in media have even begun to optimize these decisions.
Who’s your Chief Audience Officer?
Distribution decisions are just as important as content decisions in building and serving an audience, and yet they are being largely ignored. Everyone has an Editor-In-Chief or a Chief Creative Officer. But how many have a Distributor-In-Chief? Or a Chief Audience Officer? A Head of Digital Programming?
The myopic focus on content over distribution is widespread, and it’s a bad business decision. It ignores a critical access of leverage, and one of competitive advantage.
The smartest media companies will do three things to take control of their digital opportunity:
1. Put someone in charge of audience development.
Give them latitude to think about the interplay between distribution and content, so that they can marry the two. Like a head of programming for a cable network, they should be tasked to realize the full potential of your digital channels. They should support the delivery of your content, and they should also provide back pressure to your content creators. Don’t merge it into your editorial jobs — that’s too precarious. Make it its own discipline.
2. Adopt an audience development strategy.
There are three basic components you have to master: insights (know your audience segments, and what each one will like); channel selection (identify the highest value distribution outlets for your brand, whether it’s search, social, YouTube, Hulu, or your own channels); and optimization (use data to create a feedback loop and tune your content, packaging, and timing to what works for your audience).
3. Systematize it.
You have sunk millions into content management systems. But how much have you spent on your most monetizable asset, your audience? You should be as systematic in audience development as you are in content creation, if not more so. Whether it’s with established processes or dedicated algorithms, make audience development a competitive advantage. Get so good at it that you truly know how to maximize every piece of content you create — and multiply your ROI. Use technology for what it does best: Systematize your advantages over your competitors.
With the rise of new distribution platforms like Facebook, YouTube and Hulu, there’s no question that the next generation of digital media is as much about distribution as it is about content. Media companies that orient their organizations to prize audience development above all (with distribution as a key component) will catch the upside of these tectonic shifts. And they will be the ones that survive and thrive in the digital age. After all, audience is the ruler of media companies’ fortunes.
This follows my recent post about how a new TV interface from Apple could decimate the television landscape.
Even though Steve Jobs never talked about changing the face of search with Siri, its natural language interface.
But doing so would certainly be a riveting Hollywood screenplay in which Jobs, the uber-innovative, uber-inventive CEO, ultimately gets revenge on a corporate rival he views as a “copy cat.”
In this fictional script, that rival would be Eric Schmidt, one of the top executives at search giant Google. It’s Google, after all, that’s breathing down Apple’s neck with its rapidly expanding Android phone platform – a platform that, according to Jobs and his lawyers, mimics Apple’s breakthrough iPhone technology.
Putting this Oscar dream aside, there’s intensifying competition heating up between Apple and Google, even though Jobs is –sadly – no longer on the scene.
Indeed, even though Google has had voice-enabled search for some time on iOS and Android devices, Schmidt has said it’s possible that Siri could be a real and radical game-changer.
Schmidt may be right. And if he is, then Google will be facing a serious threat as Apple reinvents Google’s home turf of search.
With a “personality” that displays a unique understanding of humanity, Siri’s digital chromosomes enrich the user’s experience. This sets it apart from Google’s more mechanical offerings, and shows why Apple’s consumer-obsessed culture is so different from Google’s corporate DNA, which is as robotic and algorithmic as the “Android” name suggests.
There is rich irony here, as Apple disintermediates the greatest disintermediator of all time. When Google’s superior search service started, it practically single-handedly reduced the brand-driven experience that consumers had thereto relied on with directories and a fully editorialized Web. Google replaced those channels and home pages with 10 blue links. And in the process, became users’ destination of first resort 13 times per day.
And Apple has always been a curator extraordinaire – developing collections and exercising famous (and occasionally notorious) judgment to determine who deserves to be in its directories of songs and apps.
In all fairness, Page and his team are now trying hard to enrich the user experience by aligning their YouTube brand with media companies like Disney, and doling out big dollars for proprietary programming. The hope here is that YouTube can create dozens of lucrative user-friendly / user-favorite Web channels featuring comedians, sports stars, musicians and other entertainers. The company is building stocks of its ‘own’ media weapons in preparation for the coming war.
But, as always, it will be hard for Google to win the hearts of consumers when it comes to content; and it will be especially daunting because Apple is already so completely connected to users.
Meanwhile, with its enviable consumer connection, Apple will undoubtedly extract a toll from media companies, who still want to bathe in the warm digital light that emanates from the inviting and engaging brand Jobs built. And, as it has in every other media category, Apple stands to capture an outsize share of profits for delivering content into a magical consumer experience.
Jealous much, Google?
This article was published as a guest post at All Things D, and is republished here for DigitalQuarters readers.
Steve Jobs died without fully transforming television, but the day after he passed away, Apple unveiled Siri, its natural language interface. Though it’s currently only embedded in the new iPhone 4S, Siri could eventually change the face of the TV industry.
Notice I said “TV industry.”
But from my perspective, Siri’s greatest impact won’t ultimately be on users, or on device manufacturers (though they certainly risk losing market share to Apple). It will be on the TV industry’s content creators and packagers. Why? Because a voice-controlled television interface will fundamentally disrupt the six-decade-old legacy structure of networks, channels and programs. And that’s a legacy that — until now, at least — has been carried forward from analog to digital.Most observers and analysts believe that Siri’s voice commands could eliminate the need for those clunky TV remote controls. With the blurring and exponential proliferation of television and Web content, telling your TV what you’d like to watch, instead of scrolling through a nearly infinite number of program possibilities, makes a lot more sense.
There’s an important underlying precedent here.
If the Internet can be generalized to have one effect across every industry that moves online, that effect would be disaggregation. Choices go from finite to infinite. Navigation goes from sequential to random access. And audiences choose content by the item far more than by the collection. We’ve gone from the packaged and channelized to the unbound and itemized. Autonomous albums are fragmented into songs; series into clips; and magazines and newspapers into articles and individual photos.
As much as we may think that has already happened with video, it is nothing compared to the great leveling that will occur in the voice-controlled living room. Voice-controlled TV means direct navigation to individual episodes, programs and clips. And it will almost certainly lead to a discernible deconstruction of the network and channel structure — not to mention the decomposition of even the aggregated marketplaces like Netflix, Hulu and YouTube.
Here’s the simple reason: No one is going to sit on their couch and say, “Siri, show me NBC’s ‘Community.’” In a voice-activated world, monikers like “NBC” become useless. They don’t stand for anything meaningful to the consumer. They’re just remnants of a decrepit channel structure that’s unraveling. And, in the end, they’ll simply connote the fast-fading allure of mid-20th century mass appeal.
To be sure, the TV majors will lose much of their ability to realize network effects. Already, you’re hearing less about “lead in” and “lead out.” What you are hearing more about, however, is disconnected videos. A program on YouTube, for instance, will sit on a level voice-controlled playing field with an NBC show, and that field will soon become even more level, because Siri will eliminate the menus that structure the artificial hierarchies of content collections.
So how will we be able to get network effects back in video? Let’s look at four possible ways:
Beyond disaggregation, personalization is ultimately the most powerful consumer value of digital media. My mother’s TV experience was to walk over to her TV set and turn a dial to select among three channels to satisfy her individuality. But in the next generation, no two people will receive the same recommendations from the millions of content choices available.
Before he died, Jobs now famously told Walter Isaacson, his biographer, that he had finally cracked the TV code. It’s unclear what Jobs meant, what this entailed or what he thought it would lead to in the years to come. So, barring further posthumous disclosure, Jobs’s own predictions of his ripple effects will be a media mystery for now.
One thing that’s clear, though, is that Jobs’s Siri will start the dismantling — or creative destruction — of the TV industry as we’ve known it for the last 60 years.
Each week, we hear of major publications and traditional broadcasters who are struggling to stay afloat in a digital age with new economics and new expectations. Despite the promise of interactivity made with the internet revolution over the last 15 years, most publishers have done little more than replicate dead trees online, with zero innovation beyond the hyperlink, the slideshow, and an embedded video now and then.
And yet we can see from the rising successes of the last decade like Facebook, Google, Zynga, YouTube, and others that what catches audience attention is interactivity.
To earn loyal audiences today, publishers need to go beyond content creation: they need to produce compelling experiences that distinguish them and get the consumer coming back for more. The Pew Internet & American Life Project concluded that “when asked whether they have a favorite online news source, the majority of online news users (65%) say they do not.” In an era where the consumer’s cost to switch is the flick of a click, publishers must offer compelling, differentiated experiences to earn loyalty. Choices abound consumers: there are scads of publishers online in every category; content suggestions offered constantly via social networks; and blue links proffered by search engines dozens of times per day per reader. In an environment of choice, as brand experts have known for years, nothing builds loyalty like a great experience.
And now is the perfect time to create those breakthrough experiences. The enabling technologies for the digital customer experience have improved considerably in recent years: we now have ubiquitous broadband, flash and other streaming video, plus HTML5 and maturing mobile application platforms. Add to that personalization, targeting and social graph access, and there are some amazing opportunities to innovate.
It’s not just consumers that are thirsty for upgraded experiences. Advertisers are showing that they will pay more for immersive interaction over basic display ads next to text. Video ads during full TV episodes on ABC.com, Hulu, and others, or mid-day live sporting broadcasts command many times the CPM of typical display ads. Indeed, according to Michael Learmonth at AdAge, The Wall Street Journal’s online video content is bringing in envy-inspiring CPMs at $75 – $100.
But video is not the only way to create an immersive customer experience online. Online sites of traditional publishers like Better Homes and Gardens are experience train wrecks (to be fair, they’re not alone in that regard). Contrast that with the much more successful (certainly from an ad rate perspective) MarthaStewart.com which has many of the same elements – a top stories slideshow, cross-promotions for the print magazine, etc., and it’s a substantially better experience due to the focus on design and usability that is expected of the Martha Stewart Omnimedia (MSO) brand.
Even still, much more can be done with today’s technology to put the consumer’s needs and interests first. The latest example I’ve seen of true creativity in user experience design is Microsoft’s (MSFT) Glo. There are additional signs of greatness in the tablet demo that Time Warner (TWX) built for its Sports Illustrated brand. And The New York Times (NYT) continues to excel in their applications and interactive graphics which enjoy significant pass around (bit.ly shows over 5,000 social media clicks to a recent budget infographic and today’s “A Moment in Time” project has already generated over 100 tweets in the first 15 hours). But too few companies are making similar efforts to distinguish themselves. The opportunities are there, and we need to step up.
Consumers will decide which brands deserve their loyalty and content alone won’t cut it. We are on the brink of a total revolution of experience. For publishers, it’s reinvent or fail.
Do you know additional examples of publishers innovating?
Last week, I explained why the traditional ways of judging “quality” in published content are useless in the digital age. Judging by readers response to that piece, those dated values (which I labeled credential, correctness, objectivity and craftsmanship) are still sacred to many people. But here’s the problem: They simply aren’t enough to win audiences, drive financial success, or, for that matter, ensure viability. The demise of institutions like Newsweek proves that—and shows that publishers that don’t move beyond these anachronistic measures of success will perish.
So this week, I’m offering part two of my take on the changing definition of quality in published content. Here are the four new rules of quality that publishers must obey to flourish. The biggest difference between the old and new definitions of quality are who’s doing the judging. In the era of Publishing 1.0, when production costs were high, alternatives low and time ample, the editor deemed something quality or not. But today, content isn’t scarce at all—in fact, it is in oversupply. And it is the audience that judges quality directly, dozens of times per day.
So, according to the audience, what is quality? It comes down to these four characteristics:
—Relevance. Read the rest of this entry »