3 insights from the entertainment industry and online/digital media

… the web is beginning to fit into the media world’s oldest script: a new technology rides into town, the moguls try to destroy it, but it survives and becomes part of the town’s future. Hollywood loathed the VCR (comparing it to the Boston Strangler); the networks hated cable TV; sheet-music publishers feared the phonograph; Socrates was sceptical about writing (not interactive enough, apparently). Yet nearly always two things happen:
+ the old media survive (people are still buying vinyl records and even the old printed magazine), and
+ the new media expand the market.

Experimenting becomes important not only for entertainment but in publishing it could be used to real business success. Only two of the examples include the best selling book Fifty Shades of Grey and recent acquisition from the new owner of Washington Post, Jeff Bezos, who promised to try many new ideas to monetize the news.

E.L. James’s “Fifty Shades of Grey”, an erotic novel, was first put out online and as an e-book before a traditional publisher bought the rights. The Washington Post’s new owner, Jeff Bezos, the founder of Amazon, promises to try lots of new ideas for making news pay. … Experiments that were once impossibly expensive now cost peanuts. The trade of dollars for digital pennies doesn’t always hurt.

The term “trading analogue dollars for digital pennies” was coined by the Jeff Zucker in 2008, then the president of NBC Universal, today boss of the CNN Worldwide. Today Zucker admits that old media is “well, well beyond digital pennies”. So what would be a sustainable business model for the entatainment and media in digital times? Christopher Vollmer from Booz & CO consultancy believes that media business does best, when it has at least two profitable revenue streams. For example newspapers pushing into new business such as marketing conferences. In other words being able to manage different business models successfully.

… the New York Times has nearly 700,000 online subscribers, but few others have done so well. Media businesses do best when they have at least two profitable revenue streams, says Christopher Vollmer of Booz & Co, a consultancy. As a result newspapers are pushing into new businesses such as marketing and conferences. American papers last year made around $3 billion, or 10% of their total revenues, from these new activities.

Sources:
The Economist. August, 17th, 2013. Pennies streaming from heaven: The entertainment industry and online media
The Economist. August, 17th, 2013. Counting the change: Digital media

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