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Kindles & iPods: Weapons of Media Warfare
If you are a media company, it’s got to be disturbing that the biggest beneficiary of the digital music revolution has been a computer company (Apple). Or, that the company that’s made the biggest splash in e-books is also the largest retailer of paper-based books (Amazon.com).
Increasingly, media companies are finding themselves in the back seat of driving new products based around digital media. The launch of the iPhone and the Kindle would make the list of the most disruptive media technologies of the last 10 years. They both happen to be devices, and neither is produced by media companies. This doesn’t seem to be a coincidence.
Why are these media devices so important, and why do they now appear to be driving the agenda? It’s because they have the most direct, personal link to the consumer. If you’re a media company, that’s a big problem.
As I’ve discussed before, media companies have always been under the constant threat of technological change, and this threat appears to be accelerating. In the old days, a technological revolution would spawn a new media technology cycle that lasted decades (film, TV, radio, cable TV, etc.). Now, it seems, the cycle is only good for about six months.
With consumer technology being introduced and changed at such a rapid rate, the media companies have little chance of keeping up with it. The proliferation of smaller, more personal media devices also means that the consumer has a more personal relationship with the technology. This changes the whole way the consumer relates to technology. It’s not the film industry of yore. You don’t carry around your movie projector and show it off to friends at cocktail parties.
Everybody wants to carry these new devices — and personal media — around with them. This unique phenomenon was spawned in 1979 by the Sony Walkman. I have a vivid memory of the day my father returned from a business trip to Japan and showed me a gleaming new Sony Walkman. I put on the headphones, put in a tape, and could not believe the sound quality and personal nature of the musical experience. The Walkman has evolved into a whole array of personal, digital, multitasking devices — a trend that has gathered steam as the technology gets cheaper and more widely connected to networks.
This is why Apple, with the iPod and iPhone, and Amazon, with the Kindle, have so much power. Like Sony with the Walkman, they’ve captured the user’s imagination with technology and, to a certain extent, disintermediated the media producers.
The reason many media companies appear so confounded and confused about the technology these days is that they are not accustomed to being bossed around. In the film world, the projector was just a tool used to deliver the product. The studios owned the theaters, so there was little threat. In the TV or the cable world, content was king, and it drove the deals. That’s now being called into question, with the Kindle and iPhone the new kings.
Is it an ego thing, a personal thing, or a cultural thing? Probably all three. The bottom line is that media companies aren’t adapting quickly enough. The music industry is the classic example.
What can be done to adapt to these changes? The first step would be to pursue a strategy that embraces the phenomenon, rather than trying to combat it. When the Walkman came out, music companies didn’t focus on cracking down on bootleggers. As I recall, they sold more cassettes.
The one example I can think of in the modern world in which the media companies got it right is Hulu LLC . In this case, the media companies embraced the technological change (embedded, Web video), they started their own company, and they took control of the situation themselves.
As Hulu proves, great content will still demand a premium — and many media companies will find a way to increase their fortunes, rather than lose them, if they take a similar approach to the mobile device revolution.
Is there a Hulu in the cards for the media companies in the personal device market? It can be done, but it won’t be easy. Media companies need to innovate and take leadership in this market. Rather than waiting for a new product to come along and then trying to get a piece of the action, they should be driving the agenda.
It’s not too late, because as we’ve seen, the technology can change overnight. It’s possible that Apple will continue to dominate for years, but that doesn’t preclude the media companies from looking at other avenues to get their media into the hands of consumers in a way that generates revenue. The home networking market, for example, looks to me to be a ripe place to do this.
Media companies need to carefully gear their strategies toward new consumer digital habits and figure out business models that work, rather than wishing things will just revert back “to the old days.” They need to figure out where their customers are going, rather than talking about where they’ve been.
Written by R. Scott Raynovich
Great article and although the points raised here arent new by any means, it does again emphasise that maybe some of the majors are sitting there “hoping for a return to the old days”, which is obviously killing them, but is also crippling the artists. Now it may be argued that some of the bigger and older artists have made shedloads from merchandising, gigs AND album sales, but what hope do the newer aspirants have, in terms of getting anywhere near those levels of return? In effect, the trend is now more towards D.I.Y., which is great on the one hand as it means the artist ends up with potentially much more as a reward, BUT if most of the majors go to the wall, then the only quality control left will be by the average punter or “man on the street” AND perhaps career longevity will also become a thing of the past as RECORDED music becomes increasingly devalued as a medium, due to mass availability for just the price of a net connection.
I could go on abouyt the knock on effects which havent been so good, but the positives ARE that ironically…it will sort the men out from the boys, so to speak. Think about it. The increase in availability of cheap promo platforms and recording technology, means there’s a much bigger competitive streak in many , who know they cant coast on the laurels of an album released many moons ago; in effect, EVERYONE, and not just the media companies, will have to be better , and perhaps ever more creative , to sustain themsleves. Furthermore, in these uncertain times, take heart that the portable music format is now almost a mature technology, due to the rapid speed of innovation and development; at least this will mean that the only TRUE factors to push consumerist and fiscal demand, are PRICE and QUALITY.