What the heck is happening to the media landscape? According to my friends at Bernstein Research, three factors are driving fundamental changes within media – 1) Price Erosion; 2) Increased Complexity; and 3) Declining value of traditional mass reach
The authors argue that as the barriers to content distribution fall, consumers have increasing access to the long tail of content that – in a pre-digital world – they could not access. As a result, the old oligopoly structure of the industry is eroded away. In addition, lower content production and distribution costs and the proliferation of legally questionable consumer practices are further creating downward expectations on pricing.
The proliferation of distribution channels and formats increases complexity, as all elements of content, from length to pricing to revenue model, have to be adapted to multiple channels. Case in point is Free-to-Air TV program, which can also be viewed online, albeit with a pre-roll ad. The same can also be sold on iTunes or viewed as a short clip of a key moment that is streamed on YouTube. Monetization of content across platforms (and cost control across distribution channels) will be increasingly challenging.
Historically, mass media has been successful in delivering the largest possible audience at the lowest possible cost. However, today the marketing community is increasingly embracing narrower and more sophisticated segmentation of advertising and promotional messages. While there are technology innovations that could help traditional media companies to adapt to this environment, their adoption will be very slow. As a result, the value proposition of traditional mass media is becomingly increasingly irrelevant.
Technology is changing the European TV industry landscape by fragmenting distribution platforms, altering viewing behavior and proliferating new economic models. Given the pressures that the two primary business models, Free to Air broadcasting and Subscription Pay TV, are facing in this world of fragmentation, the only way to sustain growth is to acquire premium content and/or access to new distribution channels to ensure content reaches consumers anywhere and anytime. In this contest, most broadcasters have started experimenting with online transmission by repurposing some of their programs to suit the online platform. However, the authors contend that one of the key underlying concerns of posting TV content online is that it can simply add costs without winning any incremental viewership, as audiences fragment across distribution channels.
Media is truly in a transition phase – where producers are embracing multiple delivery platforms in response to changing consumption patterns; and marketers are increasingly struggling to reach relevant critical mass. While we navigate through this turbulent phase, one thing is for sure - only the most efficient players are going to survive to see the light of day in a post-apocalyptic media world.
The authors argue that as the barriers to content distribution fall, consumers have increasing access to the long tail of content that – in a pre-digital world – they could not access. As a result, the old oligopoly structure of the industry is eroded away. In addition, lower content production and distribution costs and the proliferation of legally questionable consumer practices are further creating downward expectations on pricing.
The proliferation of distribution channels and formats increases complexity, as all elements of content, from length to pricing to revenue model, have to be adapted to multiple channels. Case in point is Free-to-Air TV program, which can also be viewed online, albeit with a pre-roll ad. The same can also be sold on iTunes or viewed as a short clip of a key moment that is streamed on YouTube. Monetization of content across platforms (and cost control across distribution channels) will be increasingly challenging.
Historically, mass media has been successful in delivering the largest possible audience at the lowest possible cost. However, today the marketing community is increasingly embracing narrower and more sophisticated segmentation of advertising and promotional messages. While there are technology innovations that could help traditional media companies to adapt to this environment, their adoption will be very slow. As a result, the value proposition of traditional mass media is becomingly increasingly irrelevant.
Technology is changing the European TV industry landscape by fragmenting distribution platforms, altering viewing behavior and proliferating new economic models. Given the pressures that the two primary business models, Free to Air broadcasting and Subscription Pay TV, are facing in this world of fragmentation, the only way to sustain growth is to acquire premium content and/or access to new distribution channels to ensure content reaches consumers anywhere and anytime. In this contest, most broadcasters have started experimenting with online transmission by repurposing some of their programs to suit the online platform. However, the authors contend that one of the key underlying concerns of posting TV content online is that it can simply add costs without winning any incremental viewership, as audiences fragment across distribution channels.
Media is truly in a transition phase – where producers are embracing multiple delivery platforms in response to changing consumption patterns; and marketers are increasingly struggling to reach relevant critical mass. While we navigate through this turbulent phase, one thing is for sure - only the most efficient players are going to survive to see the light of day in a post-apocalyptic media world.
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