Who Will Earn Dollars From Digital Technology?
The agencies, publishers, broadcasters, artists and business people who will succeed in this new digital era, are those who are paying attention to the changing behaviors and tastes of the new digital audience. And what companies will be able to unleash the power of digital technologies to transform their businesses and brands?
To my believe there is hardly any strategic case around that will prove that traditional ad agencies will be able to make a successful transition into the new agency: one that masters the excellence for digital technology, eCRM and customer engagement. For the monetization of digital technology I would bet my money on agencies that have mastered digital technologies and invested in innovation the last decade.
A commercial translation of above statement means that traditional ad agencies’ roles will be owning the last part of the value chain: creating 30″ TV commercials, but making Dollars from digital technology, I don’t see that happen to most of them…
How about publishers, broadcasters and filmmakers…
In 2004 I stated in an interview that Dutch Print Publishers might lose 600 Million Euros of ad revenues before 2010, which equals about 35% of total yearly media budget that goes into print ads. That prediction will probably be reality soon….
Most newspaper publishers saw their classified ads go up in smoke. Almost all classified ads have moved to classified sites like Craigslist and Marktplaats.nl. And the publishers did not really move along, afraid to cannibalize their traditional business models. It seems extremely difficult for large profitable companies to seize the disrupting force called: digital?
Well, competition can also come out of a whole unexpected corner. Look at how Google has downsized the Yellow Pages. Or how Skype has hurt the Telecom companies. Again examples of how digital technologies have proven to be the next big thing to earn Dollars.
How about brands? How many brands around the globe have really been doing their utmost to grab the digital space and new the third-hand digital generation? If we only look at today’s media consumption (the number of hours spend online on a screen: internet, mobile etc) most brand and media managers have been unable to push their media mix into the right direction.
Many brands are just doing 3-5% of their total media budget online, whilst their target audience spends 50% of their time online. Pretty awkward that these brands have been able to neglect their consumers’ behavior for about 10 years and keep hiding behind “the advice” of their media agencies. But marketers that don’t practice the sole purpose of marketing (watch trends and changing consumer behavior in order to tap into new behavior) should they have the right to complain: It’s so difficult these days to reach my target audience?
I feel these marketers should not complain at all. They themselves (and nobody else, not even their media agencies) are to blame for their ignorant behavior. It’s called: being responsible and accountable for one’s own actions. So marketers, please point at yourself, show some guts and take your responsibility.
No way to hide anymore, since Oprah, the Pope and Barack Obama have shown you how to create a digital distribution strategy. You should have hired a digital agency and listened the last 10 years. How often do we need to tell you?
Next talk to broadcasters. Off course CNN, BBC, NBC and ABC are still doing pretty okay to keep up with digital technologies. But can they really step into the new digital world?
And how about the filmmakers? Are they able to seize digital?
Talk to filmmakers and media executives about the Internet -the biggest tectonic shift in the entertainment industry since the advent of cable – and they typically gripe about two things. Consumers, they say, predominantly seem to want to watch short video clips, and the economic models for earning a decent return on Internet content are still hazy.
About 15 years after Americans started exploring the Web, there’s still anxiety about the business potential of digital entertainment and reluctance to explore new creative possibilities. NBC Universal Chief Executive Jeff Zucker is fond of expressing his fear that the media conglomerate will have to swap the “analog dollars” it earns from broadcast television for “digital dimes.”
But like it or not, consumption of video on the Internet is growing much faster than movie ticket sales or TV viewing: As of April, the average Web surfer in the U.S. was watching more than six hours of online video every month, according to comScore, a tracking firm.
Hollywood faced a similar crisis in the 1950s, when a new technology began showing up in American living rooms offering hours of content – for free – every night. Television seemed like a serious competitive threat to most studio executives, who were accustomed to re-releasing their movies in theaters every few years; they worried that putting their pictures on TV would gut that lucrative business. Dore Schary, an MGM executive, complained that television broadcasters “just can’t pay enough” for the rights to show the studio’s product.
There were also, though, a few pioneers who saw potential in the new medium. In the early days of television, such entrepreneurs as Walt Disney believed that if consumers liked the tube so much, there must be a way of building a business from it. Disney didn’t abandon making high-priced movies. But he also created content for television that had lower production costs than his movies, and he used TV as a platform to promote his theatrical releases and his new theme park.
Others followed Disney’s lead, and by the 1960s, Hollywood’s studios were making more content for television than for theatrical release. The TV programming relied on different stars, lower production values and a new business model based on advertising and sponsorship.
Many in Hollywood still deride the wacky, user-generated videos that occasionally turn into viral hits on YouTube, the top website for video viewing. And it’s true that one of the most-watched videos ever uploaded to the site is titled “Charlie bit my finger – again!”
But a number of young creators – many of them working outside of Hollywood’s orbit – have been feverishly experimenting with new ways to tell stories and generate revenue. An office worker in Connecticut created the catty entertainment commentary show “What the Buck” on YouTube, and suddenly found he was making more from the site’s “partner program,” which offers creators a cut of ad revenue, than he was at his desk job, which he promptly quit.
Lance Weiler accents his suspense films with cell phone and Web-based “alternate reality games” that enable players to explore the story and interact with characters after they’ve left the theater. Robert Greenwald, a Culver City-based documentarian, has raised hundreds of thousands of dollars online to support his left-leaning films and Internet videos on such topics as the mortgage crisis and the war in Afghanistan.
And Gregg and Evan Spiridellis are building a new kind of animation studio in Venice, where they produce a series of viral videos about current events and politics, and sell subscriptions to a vast collection of customizable digital greeting cards. This month, they’ll debut their latest video for President Obama at the Radio and TV Correspondents Assn. Dinner in Washington.
Business models for content on the Internet are still evolving. But it’s already becoming clear that $100-million movies like “Land of the Lost,” or even $10-million independent films, may not represent the future of the industry.
And new technologies like YouTube, the iPhone and next-generation gaming consoles are opening up all sorts of new, creative possibilities. The artists and business people who will succeed in this new environment are those who are paying attention to the changing behaviors and tastes of this new digital audience -rather than trying to ignore them or, worse, explaining why they are wrong.
So the remaining question is: How will you unleash the power of digital technologies to transform your businesses and brands? So let go of your doubts or resistance: since ALL things will become digital eventually. Consumers simply love digital.
Source: LA Times
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Great article on the future of media: http://tinyurl.com/lrnmkp
I completely agree with this. Aiming for ditigal markets is something our company (Damnation Books) envisioned from the start. We want to bring books to where the readers are.
The technologies are very exciting and the company has turned into a “fun” job, learning and creating for the digital audience.
@ Kim
Glad you do. Thanks for your response.
Seems like a very smart choise you made. Kee enjoying the learnings and fun!
Cheers
Igor