Forest Gump’s Momma had it right (at the time of release).
“Life is like a box of chocolates. You never know what you’re gonna get.”
We all have our favourite chocolates in the box of chocolates. Just think of the disappointment you experience when someone has nabbed your favourite chocolate Christmas time. If most of us had our way the box would only contain our favourites.
For the most part, we need to buy the bundled product (entire box) to get access to our favourite. We often discard the by product (for me those hard toffees!) in order to get to our preferred product (Salt Caramel).
Newspapers used to be very like a box of chocolates, we had to buy the whole box even if we only liked certain flavours. We bought the bundle even if we never read the sports or leisure supplements.
Today, we can choose not only what we are “gonna get”, but filter through the myriad content to select our chosen series of articles, images or authors. In the cases of algorithm-driven companies like Facebook the platform is filtered for me implicitly, by crunching the data (in realtime) on what content I consume, share, like or dislike.
Scott Galloway is our guest on this week’s innovation show and he calls these companies Benjamin Buttons, much like cars that get better and more valuable as they clock up more mileage.
Atomisation: Needles not Haystacks
Atomisation means to obliterate (content) into smaller pieces. The web now demands this of content.
Google’s mission is to organise the world’s information and because Google is now a gateway to the net and a discovery gateway at that. To be discovered we must obey the rules.
In this respect, our content must be unbundled into smaller components and then tagged and categorised in order to be discoverable.
In the past, when you liked a music single you saw on MTV you could buy that single in a physical music store for the handsome price of IR£3.99 or you might be tempted to upgrade to IR£9.99 for the entire album and still have your favourite track.
The web and in particular iTunes has obliterated this old model. iTunes allows us to search a vast catalogue of music and pinpoint not just an artist, but the exact track we seek at a fraction of the album price, we have replaced the analog cd for the digital file. It is cheaper, we have no by product, and we have a highly filtered music collection with no unwanted B sides or album-filler tracks.
This same facility of getting exactly what we want, when we want can also be applied to media. We can now listen back to an archive of a radio show we missed, pinpointing the exact interview we wanted to hear. We can watch back to a show we missed and see a certain performer or segment of the show. We can google a particular news article and find it from a plethora of sources.
This collapse of bundling has severely affected newspapers. In the past, the newspaper bundled news (now available via Blogs, Facebook, Google, Twitter and RSS readers), classifieds (now available through Donedeal, Craigslist or Tinder) and even cinema listings (now available through the cinema apps like UsherU). Today, the latter have been replaced by Google and their organisation of the world’s needles amidst haystacks.
What have we done?
When Steve Jobs signed up record labels to hand over their digital music sales to iTunes I am sure he couldn’t believe his luck. They outsourced a hugely valuable asset and are now stuck in a world where the shopfront to buy digital music is iTunes. At the time, senior executives did not see any digital revenues and thus undervalued digital sales.
Similarly, Newspapers sliced up their content and opened up their websites to Google crawlers where their content became “organised needles”. As Scott Galloway put it in this week’s show for the high quality content publications this was like they were the Porsche watch being sold in a supermarket chain with every other watch including the cheapest of the cheap.
This was a knee-jerk reaction, most traditional media saw traffic as the goal, it was about eyeballs, not quality eyeballs and certainly not eyeballs that were on a product backed by data.
Just when we see glimmers of hope where publishers might have jumps in digital revenues or hire some great new talent then something incredulous happens again.
In a bid to be the “cool kids” and show they are being progressive many publishers signed up to Facebook Instant articles, I remember thinking how crazy this was at the time. Scott puts this as follows “It’s like they took the gun from their mouth (google crawling their content) and shot themselves in the foot (instant articles)”.
“It’s like they took the gun from their mouth and shot themselves in the foot” — Scott Galloway
Strategic Alliances — Aliens have landed
What if media companies joined forces and sold access to their content to the highest bidder?
This would give serious competitive advantage to whoever bought those rights. Imagine if the rights to content for the Washington Post, The NYT and Quartz were only available via one platform. This is like media rights holders selling the rights to just one TV network, that gives the network a competitive advantage. That also removes the over reliance on digital advertising sales in a world of ad blockers.
It makes total sense, right? Yes, but no-one will make the first move.
As Scott puts it, Ronald Regan once said if aliens landed America and Russia would find a way to cooperate. Well, aliens have already landed and there is an urgent need to cooperate, but no-one will make the first step. Doing this will relegate low quality content sites to “a sewer of cat pics and fake news.”
“A sewer of cat pics and fake news.” — Scott Galloway
This is where serious bravery and leadership are called to question.
Do media alliances shut off Google, Facebook and Tunein (for Radio)? They are so worried about dropping numbers that they are frozen. Yes numbers will drop, but you will move to such a more important place.
Race for reach is no longer enough, media is now about connection and community.
As for advertising? You are not so much selling little ad slots, you are selling access to your intimate community.
Most Digital Transformation and Innovation Issues are Human Issues
Most traditional media outlets struggled (are still struggling) greatly with digital transformation.
As Ian McClean CEO of Flow group told us a couple of weeks back 70% or change initiatives fail and the biggest obstacle to changing an organisations culture is the organisations culture.
In some media organisation, admittedly the very poor ones traditional media resources and reassigned them to digital. In effect, they became “digital” overnight. Many of these “overnight digital” people are often the biggest blocker to true digital transformation. They are so fearful of being found out that they hold back the strong and promote the weak. In effect, such companies are stuck in a “7’s hire 5’s loop”.
For a variety of reasons publishers grapple with the fact that the people who got them to where they were today are not necessarily the people who will get them to where they want to be tomorrow.
Those employees who instinctively know what to do are consistently frustrated, try many initiatives, may have some rare wins, but the frustration eventually leads them to leave and join the tech giants or pre-IPO startups.
Where might it all end?
Even Twitter may suffer a fate of being a highly relevant product, but just not a commercially profitable one. That is the great problem with being a digital publisher. You cannot compete with the horsemen, Google and Facebook in particular hold the keys to the kingdom, massive scale backed by ultra laser-targeted advertising and personalisation engines, huge revenues and bright minds who know their craft. How can a traditional outlet compete for digital dimes, let alone the staff to earn them!
Scott estimates that many media outlets will be bought by wealthy billionaires as trophy buys.
This is great to bail the publications out and keep the alive, but ultimately not good for news in particular. Media that is profitable is always better media, it ensures the content is of a high standard and it ensures the content is consistent.
We are amidst a reckoning of sorts, many publishers, both digital first and traditional will collapse, we will see consolidation of portfolios (where regulation allows) and we will see increased trophy acquisitions.
If you like the topics covered here you will love this week’s innovation show, we talk to the great Scott Galloway, founder of L2 and a Clinical Professor at the NYU Stern School of Business, former board member with NYT, Eddie Bauer and Gateway Computer.
We also talk to Gene Fein, inventor and innovator. CEO and founder of Genedics, Tombolo Technologies, Berkshire Music Glen Productions and Digital Music Network. He is holder of over 100 patents and 250 pending and creator of Therajoy CBD ointment.
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