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An economic understanding of what has happened to the media over the past 15 years for an understanding of what's next.
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Why it happened What it means And what’s next
Bob Rosenbaum!Media Management/2012!
©2012 Bob Rosenbaum www.themarke6arm.com
Marshall McLuhan 1911-‐1980 / Philosopher & CommunicaDons Theorist
• Understanding the Media; 1964 – The medium is the message – Explains why stories are different on air, in print and online
©2012 Bob Rosenbaum www.themarke6arm.com
Marshall McLuhan 1911-‐1980 / Philosopher & CommunicaDons Theorist
• Understanding the Media; 1964 – The medium is the message – Explains why stories are different on air, in print and online
– Hot v. Cool media • Hot: demands acDve parDcipaDon
– Newspapers, magazines • Cool: Allows passive parDcipaDon
– TV, radio • Explains why meltdown has affected print differently than broadcast
©2012 Bob Rosenbaum www.themarke6arm.com
McLuhan’s Tetrad
Examines impact of new technology on society by asking:
• What does the medium enhance? • What does the medium make
obsolete? • What does the medium retrieve that
had been obsolesced earlier? • What does the medium flip into when
pushed to extremes?
©2012 Bob Rosenbaum www.themarke6arm.com
DOCUMENTING THE MELTDOWN
©2012 Bob Rosenbaum www.themarke6arm.com
Newspaper meltdown
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
Online
Classified
Total
Source: Newspaper AssociaDon of America
U.S. newspaper revenue (millions)
©2012 Bob Rosenbaum www.themarke6arm.com
Newspaper meltdown
Source: Newspaper AssociaDon of America
U.S. newspaper revenue (millions)
©2012 Bob Rosenbaum www.themarke6arm.com
Magazine meltdown
0
200
400
600
800
1000
1200
2004
2005
2006
2007
2008
2009
2010
2011
Source: Publishers InformaDon Bureau
Average adverDsing pages/magazine
©2012 Bob Rosenbaum www.themarke6arm.com
Magazine meltdown Average adverDsing pages/magazine
©2012 Bob Rosenbaum www.themarke6arm.com
B2B meltdown
-‐30
-‐25
-‐20
-‐15
-‐10
-‐5
0
5
10
15
Revenue (billions)
% change
Source: Publishers InformaDon Bureau
2009 Trade Media Revenue
©2012 Bob Rosenbaum www.themarke6arm.com
WHY IT HAPPENED
©2012 Bob Rosenbaum www.themarke6arm.com
Internet = DisrupDon Key events in prelude to the meltdown
• 1989: America Online founded • 1993: Excite becomes first “modern” search engine
• 1995: eBay founded (as AucDonWeb)
• 1996: Craig’s List goes online • 1999: ‘Blog’ is coined • 2000: Google launches AdWords
©2012 Bob Rosenbaum www.themarke6arm.com
AOL: So What?
• Was it the first online news source? • Sped up news cycle • Allowed tracking of reader interest • Ushered in era of user-‐driven content
Nutshell: Readers want it faster and customized
©2012 Bob Rosenbaum www.themarke6arm.com
Excite: So What?
• Defined how the Internet would be used – Search = Research – Search = ExploraDon – Search = DisintermediaDon – Search = Immediacy
– Search = Portability Nutshell: Users declare independence from tradiDonal informaDon filters
©2012 Bob Rosenbaum www.themarke6arm.com
Excite: So What?
• Old media consumpDon is reacDve whereas • Online media consumpDon is proacDve • Internet becomes “honest” medium since storytelling
©2012 Bob Rosenbaum www.themarke6arm.com
eBay/Craig’s List: So What?
• Did to the “marketplace” funcDon of media what search engines did to the “informaDon” funcDon – Shortened vending cycle – Reduced cost – Removed geographic limitaDons – Increased personalizaDon Nutshell: Buyers and sellers alike share the largest marketplace ever assembled
©2012 Bob Rosenbaum www.themarke6arm.com
Blogs: So What?
• Everybody is a news outlet • Barrier to entry is the lowest it’s ever been • Variety of offerings is the widest it’s ever been • New corporate media emerge – Huffpost, Daily Beast, Slate
Nutshell: Media must struggle harder than ever to maintain/engage audience
©2012 Bob Rosenbaum www.themarke6arm.com
AdWords: So What?
• Allows adverDsers to pay for higher search engine exposure
• MarkeDng becomes directly measurable
• Reduces cost of markeDng – Metric changes from CPI to CPC
• Arrives during a recession Nutshell: Instant examinaDon of tradiDonal
adverDsing
©2012 Bob Rosenbaum www.themarke6arm.com
McLuhan’s Tetrad Revisited
Examines impact of new technology on society by asking:
• What does the medium enhance? • What does the medium make
obsolete? • What does the medium retrieve that
had been obsolesced earlier? • What does the medium flip into when
pushed to extremes?
©2012 Bob Rosenbaum www.themarke6arm.com
McLuhan’s Tetrad Revisited
How Internet media technologies have impacted society:
• Enhance: Speed, proactivity, customizability, freedom
• Obsolete: Daily news cycle, browsing, print advertising, printed marketplaces
• Retrieve: Participation • What does the medium flip into when
pushed to extremes? _________
©2012 Bob Rosenbaum www.themarke6arm.com
McLuhan’s Tetrad Revisited
How Internet media technologies have impacted society:
• What does the medium flip into when pushed to extremes?
Facebook and other social media: Logical conclusion of media that is fast, user driven (proactivity and customizability) and allows unprecedented participation and freedom
©2012 Bob Rosenbaum www.themarke6arm.com
RevoluDon in markeDng
MarkeDng before the Internet: • We talk/you listen!
MarkeDng with the Internet:
• Can we get permission to engage you? – E-‐mail lists – Blogs – Social media
©2012 Bob Rosenbaum www.themarke6arm.com
RevoluDon in markeDng
If we can find you… And get permission to engage you …
Then why do we need the media at all?
©2012 Bob Rosenbaum www.themarke6arm.com
RevoluDon in markeDng
If we can find you… And get permission to engage you … Then why do we need the media at all? • The marketer now aggregates its own audience and produces its own content with parDcipaDon from the outside; the marketer IS a publisher – Permission markeDng – Custom publishing – Content markeDng – Social media markeDng
©2012 Bob Rosenbaum www.themarke6arm.com
RevoluDon in markeDng
Screenshot of Lay’s Facebook page, 8/26, 2012
©2012 Bob Rosenbaum www.themarke6arm.com
Internet 2.0 = DisrupDon 2.0
• 2003: LinkedIn founded / profitable in 2006 • 2004: Facebook launched • 2006: Twiner launched • 2009: Quora launched – 2012: Quora declared a mortal threat to Wikipedia in San Francisco Chronicle
The marketer as publisher fully realized
©2012 Bob Rosenbaum www.themarke6arm.com
THE IMPACT
©2012 Bob Rosenbaum www.themarke6arm.com
Decline of journalism
• U.S. newspapers reduce investment in journalism by $1.6 billion/year (Rick Edmonds, Poynter InsDtute)
20,000
30,000
40,000
50,000
2007 2008 2009 2010 2011
Newspaper newsroom employment
Source: Poynter, ASNE, Newspaperlayoffs.com
©2012 Bob Rosenbaum www.themarke6arm.com
Media shakeout Newspaper closures 2007-‐2010
Source: http://newspaperlayoffs.com/maps/closed/
©2012 Bob Rosenbaum www.themarke6arm.com
New business models
• TradiDonal media – moneDzed audience – Generate content – Amass an audience – Lease access to the audience
• New models – moneDzed content – Generate content – Sell content
©2012 Bob Rosenbaum www.themarke6arm.com
Examples of new business models
• Digital-‐only startups – Rupert Murdoch “The Daily” – Fear.less
• Group sourcing – Wikileaks – Nowpublic.com
• Hyperlocal publishing – JournaDc – Heights Observer
©2012 Bob Rosenbaum www.themarke6arm.com
New business models
• Content aggregaDon – Associated Content
• Audience management – Press+ media paywall
• Content outsourcing – MedCity News
©2012 Bob Rosenbaum www.themarke6arm.com
WHAT’S NEXT
©2012 Bob Rosenbaum www.themarke6arm.com
What’s next
• DisrupDon as a way of life • Print survives, along with everything else (TV didn’t kill radio, cable didn’t kill TV) – Fewer print publicaDons per category
• Consolidators absorb innovators • Digital reading devices become ubiquitous
• InformaDon providers will adopt pracDces that make these devices preferable
©2012 Bob Rosenbaum www.themarke6arm.com
THE MEDIUM IS [STILL] THE MESSAGE
©2012 Bob Rosenbaum www.themarke6arm.com
• There just happen to be more media than ever before. • No media ever go away completely • “Obsolete” media just adapt and develop their own niche markets