On Friday, February 10th, I had the opportunity to attend a Media & Entertainment conference for MBA students at Stern, NYU. This conference is an otherwise rare opportunity for students to meet face to face and learn from top executives at major conglomerates like Sony/EMI, MTV/Viacom, and Time Warner, as well as indie defectors at cutting-edge new media marketing firms, like Wiredset and Deep Focus. The panel discussions were highly technical, and probably typical of the new media vocabulary and grammar popping up at corporate boardrooms across America. It took me a few days to let the flood of information coalesce… and here they are, the top 5 take-aways from the sessions, with my editorial commentary:
Multi-Platform Marketing – Hedge your bets everyone, but multi-platform marketing is the name of the game. With so many competing technologies, business models, differing consumer segment demands and desires, marketers are obliged to at least test out the alternatives available to them. Whether we’re talking about simultaneous multi-platform distribution of content (e.g. film released in theaters and on DVD simultaneously; songs available for wired or wireless download to laptop, mobile, iPod, PSP or other device) or cross-platform advertising and branding opportunities, it’s obvious to new media marketers that digital convergence is on the way. However, it may be further away than we expect, and we will probably continue to experience the apparent divergence and proliferation until market forces (or federal forces) kick in and force a saturation. It’s going to be a bumpy ride, but some (a precious few?) are already starting to see positive results in revenue streams from experiments in multi-platform marketing.
The Trend to Spend - Related to the point above, panelists stressed that we are only going to see increasing costs of online marketing in the coming years. Managing multi-platform marketing, advertising and promotions is a huge administrative and operational burden right now. This is obviously related to the scope of divergence and convergence of technology platforms. However, with the (open) Internet’s almost utopian capability for leveling the playing field, i expect to see more aggregators and intermediaries showing up to fill in the gaps, allowing smaller players to compete affordably and cost-effectively. Yet, the industry still has to overcome its bickering over metrics and determine the linkages between multi-platform marketing activities and the bottom-line.
Pay to Play – Certain panelists touted the “have everything, own nothing” concept, as the future in retail of online content. This is the model espoused by Napster, which itself is predicated on Mr. Gates’ historic vision of on-demand-delivery of online application software. In other words, we should expect a commodification of content such that the content is rendered less valuable than access to that content. We will be paying more to transfer the content, because the content itself is ephemeral, in terms of attention. Streamloading and similar delivery mechanisms are expected to make a major comeback, only if supported by broadband penetration. This model will only be successful to the extent that content providers are able to manage their delivery systems – as well as the extent that users trust surrendering that element of ownership and control to corporations, and miscellaneous third parties. With the superfluous static and dynamic content online, powered by the continual explosion of online content creators (non-profit user-generated content notwithstanding), compared to the handful of entities controlling the foundations of distribution channels (reference: end of network neutrality), it’s clear who has the bargaining power.
The Right Rights - To support the pay-to-play model in favor of content creators however, some panelists were excited about upstart Navio’s rights-based digital commerce solutions, which so far seems to be a promising soft DRM solution that works. Navio aims to allow not only content creators, but entire communities (e.g. P2P file-sharing networks) to buy, sell, trade and share their rights to content. In addition to a range of specialized products for monetizing commerical online content, the company’s core product is the AV Commerce Suite™, a secure, digital commerce service and transaction engine, supported by Navio’s servers as an internet Application Service Provider (ASP) that delivers the aforementioned capabilities. What’s amazing about Navio, is that conceptually, it seems possible for every party to get its micro-cut from the transfer of online content here, there and everywhere. In other words, depending on the accepted industry-wide valuation models, bloggers could get compensated for viral marketing, P2P file-sharers wouldn’t have to be moochers, and every monetizable action on any content file could be monetized, in potentially infinite numbers of micro-payments. Navio hopes to do for the Internet what paper money and credit records couldn’t do for the real physical world – provide a reliable, accurate, pervasive valuation model. Navio has already partnered up with IBM, CISCO, Red Hat, Cingular and others. One panelist conferred to this blogger that we have 12-18 months to prepare for the mass adoption of this zeitgeist. However, before I toss my 2 cents into the ring with this saviour, I’d like to see how well Navio is able to manage the scaling of their success, because the entire model rests on the efficiency and efficacy of Navio’s servers, and, not-to-mention, customer service…
Sell Out or Get the Hell Out – Finally, a thought that is probably terribly disturbing to anyone who still hasn’t tossed out the term “sell-out” from their vernacular. Web 2.0 is pushing the content market to a near elimination of any separation between content and the monetization of that content. Music, film, TV and traditional print conglomerates are still powerless to Internet companies, who can easily shut out anyone and invest their billions in market capitalization to developing their own content houses. True, right now, at the beginning, these companies need the big media brands to drive & draw consumers online, but the migration is quite inevitable, and with increasing user sophistication, the big media brands will be back to competing online, the same way they are struggling offline. Take the previous 4 points into account, and independents have much reason to be anxious too. We are already experiencing an increasing trend of content creators trying to expand and multiply their revenue streams as extensively as possible. For content, if you’re not making money from additional distribution channels or merchandising, the only other place you can look for more money is basically advertising, including licensing rights, co-branding, product placements and so on. Content creators will face increasing competitive pressures from content marketers to create and distribute content in a way that puts more food on the table for more people. The future is ripe for smart authors, musicians, designers, and so on. Everyone else set up a donation jar.