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Now is the media of our discontent

In media on 10 September 2009 with View Comments

When the media industry must think about their customer it seems like its the analogy of trying to put the genie back in the bottle or in the words of The Beatles, a exhortation addressing customers for them to:

Get back, get back
Get back to where you once belonged
Get back, get back
Get back to where you once belonged
Get back, Jojo
Go home

However the genie is now out of the bottle and a lot of the business practices that they have done over the past three decades or so have been partly responsible:

• I guess it started with the film industry and Jaws or Star Wars, but the media industry has been chasing blockbuster rather than slow but steady sales
• Record companies in particular EMI have been slicing talent off their rosters that haven’t been immediate blockbuster material

This goes against the economics of digital media where consumers now have the opportunity to choose content based on their more individual tastes. In fact, a lot of file sharing is about obtaining hard-to-find or rare content that the record companies own the rights to but won’t or don’t feel its economical enough to reach.

Instead of trying to take advantage of global market niches, they went to war with their consumers.  Even iTunes contains a small amount of the total music that record companies currently own, much of the music is on magnetic tapes that are literally decaying away in vaults.

Its not only back catalogue content, but also new talent that the record companies have failed to develop. Whilst its not my taste, the career of Steve Brookstein is a case in point. Careers of famous artists like Cosby, Stills, Nash & Young have highs and lows. This just could not happen at a modern major record label.

A by-product of this is that much of the major media has become irrelevant to their audiences:

• Clear Channel radio was turned off by customers once they had the opportunity to listen to more than the same 50 tracks on computer-controlled heavy rotation
• HBO managed to wipe the floor with major US TV networks by providing quality content that consumers were  prepared to pay for rather than watch the ad-supported content for free
• The Evening Standard felt the need to apologise to customers in public advertisements for losing touch with them as part of their rebrand
• The music industry has seen year-on-year sales declines, music has declined in monetary and cultural value – its audio wallpaper for most people rather than something that enjoys active listening

The media industry doesn’t seem to understand the value of word-of-mouth:

• Research by the likes of Oxford University, the University of Colorado at Boulder and Instituto de Empresa in Madrid has shown that piracy can actually increase music sales
• Henry Jenkins outlined how piracy made a market for Japanese anime in the US
• Mark Pesce provides a case study on how Battlestar Galactica benefited from programme piracy to whet the appetite of fan boys and bring in triple the viewship normally expected for a show on  the Sci Fi Channel

A failure to embrace innovations consistently:

• Take NewsCorp as a case in point: trying to charge for newspapers and yet providing video content for free on the Internet

Authority doesn’t recognise disruption

Up until about 100 years ago, one of the major trades was that of a cooper. A cooper specialises in making barrels, buckets and butter churns. Wooden barrels are seldom seen now outside wine making, buckets have been made on an industrial scale out of galvanised or enameled steel and plastic and butter is now manufactured on an industrial scale at creamery. At no time did the government try and preserve wooden barrel making capacity despite the disruption caused by the industrial age.

Contrast this with the interventionist policy that governments are exerting to protect the media industry from the inevitable disruption brought by the internet. Where people have tried to square the circle like Apple with iTunes, the music industry has greeted this process ungratefully as they don’t control all aspects of the process and can’t get customers to buy products that they want to sell at a price that they want to sell at. If it was any other business, the management team would have been kicked out by the shareholders.

Instead you have countries criminalising voters and siding with industries that are failing to get their house in order.