Tuesday, November 14, 2006

The lines are blurred... now what?

When I talk with people who don't understand the changes going on in media (and there are many) I often point to the TiVo box. I note how life will get interesting when you return home from work, turn on the TV and see consumer-generated videos co-mingled with high-cost products produced by the major networks.

The way I see it, when the DVRs take content from the Internet just as they do from cable or satellite providers, and that content is delivered automatically based on your viewing habits, the distribution wall comes down. Throw in some smart search and you don't even need to put things on YouTube, you just put them on your blog or on your personal site, give it the right tags and viewers' boxes find the content.

Think about a person who loves historical documentaries. Imagine if they return home and find a documentary about small town in Wisconsin right next to a documentary about Jessie James from the American Experience.

I saw such a video during a recent trip to Milwaukee that traced the history of a piece of property. The man who owned the property commissioned it from the local historian just so he could show his friends what he owned. What if he put that on the Internet so it could find an audience? That audience may be just 10 people, but so what? It's already produced, the cost of distribution is almost nothing, why not put it up, tag it and let the audience find it?

Today TiVo took a step in this direction by announcing that it will expand its Internet-based content. That's not the only step toward this world. This weekend a John Markoff article in the New York Times indicated that Web 3.0 is about smart search. Maybe it's more hype than truth, but the search world is moving slowly in this direction.

So, what does this do to the traditional advertising and media relations model? Both are built on the one-to-many concept. That is, put out a few well-placed ads and you can reach a large audience. Buy an ad in the Sunday New York Times or on Lost, and people will see it.
Place an article in USA Today and the audience comes flowing in.

And that still works. But for how long? Advertisers are already starting to look at their spots more as mini movies and entertainment than just product ads. The idea is to make the ads as compelling and enticing as the rest of the content. Media relations companies are also branching into blogger relations and other open communications concepts. These are all great steps.

The thing is, the answer may not lie in marketing, it may lie in product development. If the market becomes fractured, then it's hard to reach a massive audience with a single product. You can, however, deal with the customized world by creating customized and personalized products.

For an example just look to the open source world. Need certain functionality but not others? Then go in and tweak the code. Or maybe someone has created the code you need.

Look at the tuner generation in the auto world. A used Civic may cost just a few thousand dollars, but the car they create has tens of thousands of dollars on top of it. The car is a platform.

Even with all this, I still think we're a long way from a completely diversified media market. There will still be blockbuster shows and big hits, but now is the time to learn how to make all this work.


info said...

chuck, The answer may be with the concept of the long tail from Chris Anderson. The idea that there's a lot of sales potential in selling small number of things.

I also agree that building better products that are targeted for customers makes a lot of sense.

Chuck Tanowitz said...

Oh yes, Chris Anderson's Long Tail concept is a major part of this. But it has to go well beyond media and into hard goods.

But there are a number of organizations that are still built on mass audiences. Think of Starbucks or McDonald's. These are organizations that rely on building strong mass brands. How can you do that in today's world? How can you sustain it?

Sure, the Long Tail is part of that, but can that work in a retail setting?

John Cass said...

The long tail was written around the web. However, I do recall that REI has in-store terminals with access to the web and their web page. We've known for years that 1 + 1 = 4 when it comes to marketing both in a retail setting and online. Building a strong brand online is difficult, there have been competitors to Amazon.com that threw in the towel. However, if a company can succeed in both building a good retail division and online division there will be benefits to be gained for the effort.

Maybe that's the dilemma for many retailers that also have an online presence. Do many of them have two separate inventories? One for the store and the other for the web? I don't know the answer to this question. But I think its important to figuring out the question.

I also think that a small store might use the example of the long tail and really concentrate on providing more choices. They should also go to the web.

Powells bookstore is an example of a retail store that does offer a huge variety of books. They always did that, now they also sell online.

Chuck Tanowitz said...

I've always seen Manhattan as the prototype for the Web. The city of New York is essentially a series of small neighborhoods. But scattered through the city are magnet stores, places you don't find anywhere else. Places like a store devoted to sheet music that has strange, rare items. Or The Strand, with its massive book collection. Or specialty candy stores that carry rare and unusual goods.

These are stores that, until the Web, could only exist in New York because it was easy to find a mass audience.

But media is just one way to get an audience. Apple, for example, has opened up boutique stores, not just to sell iPods and computers, but to market the company. The same goes for Starbucks stores, which are about being a place to go, just as much as they're about coffee.

But building stores is an expensive thing to do, so it's not a strategy that can be undertaken lightly.