Media is a business in a continuous transformation process. Concerning newspapers, customers’ attention has gone from paper to PC to smartphone, and competition is harder than ever. The global internett ecosystems change the rules as they like with unpredictable pace. All sides of the media business are continuously under the pressure of digital transformation and managers and innovators should continuously work with trends and create scenarios to thrive in such an environment.
Today I wold like to introduce five trends that you as an investor, manager, entrepreneur or innovator may want to use as a baseline for your strategies.
Content is still king, and distribution is less King Kong. The days of undifferentiated content are coming to and end. Rights on or access to quality content (meaning content people are willing to pay for) is rapidly becoming a way of securing a strategic sustainable position. All distribution plattforms, from Netflix to Facebook, are spending billions of dollars in creating or securing new content. Even almighty Facebook is paying between 30 and 50 million USD for an exclusive deal to stream 25 Major League Baseball games to Facebook Watch, its newly launched video service.
Conclusion: Invest in creating exclusive quality content that distribution platforms will be willing to pay for.
It will be harder to earn enough money through advertising only. The key word here is “enough”. There will still be possible to earn money on pure digital advertising, but not in the numbers media has learn to accept as the norm. Google, Facebook, Amazon and their Chinese rivals are accumulating market shares on digital advertising. After the implementation of GDPR, this kind of concentration may even increase. Inbound marketing, content marketing, and straight forward paywalls should claim a more important role in the future. Because content is still king, paywalls will only work if the content behind is worth it – and cannot be accessed through other channels for free.
Conclusion: Be very careful about designing your business model around advertising only. How else can you monetize your service? Is subscription a viable option?
GDPR and privacy will not affect the FB and Google business model that much. As I have stated in a previous post, GDPR may have been the ultimate blessing for the global internet ecosystems and a curse for everyone else. Users know Google and Facebook and Snapchat and Twitter, which are now in a much better position to ask users for permission and continue collecting relevant data for ad targeting. Indeed, Google and Facebook have so much data already now, that they don’t necessarily need third parties for targeting ads with enough accuracy.
Conclusion: If you think that GDPR will give your business a competitive edge, think twice and ask yourself why.
Digital assistants will aggregate content and services for you…and get paid for it. Digital assistants like Amazon Alexa and Google Assistant are specially useful when the user interacts with them with just voice, without the need for a screen. Over time, this will put enormous pressure on media, specially digital versions of newspapers. Without the choice that visual interaction gives, users are already asking assistants for news headlines spoken out loud. News aggregators with a skill in Alexa may mix news from different sources and read them out loud for the user, who doesn’t know -or maybe even care- which the sources are. Newspapers and other sources may thus become invisible to the user. Naturally, the players that are best positioned to play the role of aggregators are eventually Google, Amazon, and even Apple. In many ways, this is already happening on screen with the introduction of Apple News and Google News. It is a matter of time before a version of these are made “voice only”. And the subscription money will flow first to these internet giants.
Conclusion: Position yourself as such an authority, so that users will be willing to overcome laziness and ask precisely for your content.
Virtual product placement will be the new tolerable advertising form. The latest Facebook F8 conference made it clear to everyone willing to listen. Augmented Reality and Virtual Reality will create image integrations in your feed to be shared with your friends. These images can and will be from brands, fro hand mixers to baseball games, as the conference showed several examples of “live”, although in a very discreet manner.
Conclusion: Start experimenting now with AR and VR as advertising tools. This in order to gain experience and customer data on a scale that helps your brand to position itself as category leader on social media and Google – as advertisers have used other media like radio or TV before them.
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So, below you can find a summary you can use as baseline for your media strategies and presentations:
- (Exclusive) content is still king
- It will be even harder to earn enough money through advertising only
- GDPR and privacy will not affect the FB and Google business model that much
- Digital assistants will aggregate content and services for you and get paid for it
- Virtual product placement will be the new tolerable intrusive advertising form
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