The Web is the big change maker in how we consume media. But the changes that it makes are just beginning.

Newspapers are struggling to find new business models. And here is a story about one called Kachingle.

Over the last few days I have been talking to people in and around the media and content business about the changes and particularly the impact of P2P. I find it really incredible how much people are aware of P2P, the concept, and how little they are aware of how it works, who delivers it and why it is so incredibly viral.

The fundamental issue is customers. The web really does put the customer in the driving seat. And particularly in the media sector. Studying what consumers do has been a fascination of mine for years – ever since I was in the music business and learned that if you wanted to understand what made records into hits, you needed to not just have good ears to find the right song, and have a great relationship with radio, to ensure that you were making records that fit the format of the radio station, but also that you went out to retail to study the customer experience in every way. It is a relatively simple ecosystem but you need to have your eye on all aspects of it if you want to win.

The TV business has been the same for years. It, too, has been a relatively simple ecosystem, and is not dissimilar to the music business.

In TV you have the audience or consumer, the transactional customer or advertiser and the content producer. The advertiser has provided all the money to enable the system to function with the proviso that they get customers themselves. The broadcasters have reaped the rewards of following a system that has, over time, required for them to ensure that they keep on the right side of the content producers – Hollywood – who keep on responding to new technologies and ideas in such a way as to gradually build up a process of the way that rights need to be protected that has become a critical part of the ecosystem.

The advent of P2P has disrupted the model, although it is still in the first quarter of the game, so the impact has been only subtly felt so far.

But the economic meltdown is going to accelerate the unraveling.  Actually it is not so much the economic meltdown as the evaporation of consumer trust. Consumers have had a massive jolt and are thinking twice about discretionary expenditures. That means that advertising is not less effective, but that it less efficient in terms of expenditure to revenue ratios.

Broadcasters, meanwhile, are focused on doing the right thing by their content suppliers. They have to do this in order to ensure that they get continuity of supply.

But consumers have also been changed by the web and the instantaneous word of mouth that comes with IM, email and modern communications functionality.

Consumers want their favourite programs now. That means when they are first broadcast. And with P2P they also have the means to get them. And since some consumers also have the motivation to share their favourite programs with their widely dispersed friends across the globe, they record, rip and remove ads in their favourite programs so that they can be shared.

TV executives love to have programs on air that are part of what they call the water cooler conversation. These are the programs that people can talk about the day after broadcast at the office. They are the hits of the day.

But what these same execs are failing to truly recognize is that the water cooler effect now takes place over IM, and email and across the globe.

When Desparate Housewives, Series X, Episode Y is broadcast in New York, people in Sydney want to be able to see that episode, not Series J, Episode K. They want to be able to participate in the water cooler conversation with their co-workers round the planet. Since they have the means, and they have the desire, they do what they need to do. They use Kadmilla or Emule of one of the other tools to get that content on demand.

This then is the true legacy of what Edward de Bernays created when he worked on turning the US from a needs based society to a desires based one. That meme has gone round the world and multiplied and it continues in spite of the economic meltdown.

Look at this ad that Hulu are running now to promote their solution to being able to see TV on demand. Its a good ad.

Enjoy:

This entry was posted on February 11, 2009 at 7:41 pm. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Posted in Main Page by Chris Gilbey No Comments Yet