Paul Graham, an essayist & programmer with over 10 million page views in 2008, posts about the future of publishing in a "Post-Medium" world.
He draws implications from history about the hurdles that must be overcome to generate money from the audience. "In fact consumers never really were paying for content, and publishers
weren't really selling it either. If the content was what they
were selling, why has the price of books or music or movies always
depended mostly on the format." I think Paul has identified the two key factors effecting consumer purchases: 1)media companies make money by distributing content not making content consumers want to buy and 2)media companies don't sell directly to their consumers, they go through 3rd parties (e.g., cable companies and newsstands, delivery services, or subscription marketing companies).
But I draw a totally different conclusion than he does: "What happens to publishing if you can't sell content? You have two
choices: give it away and make money from it indirectly, or find
ways to embody it in things people will pay for. " That's continuing the same distribution business model and generating revenues from advertising or from consumers through 3rd parties. I don't think that solves the problem.
I believe people will pay in the media industry when the product is improved and media companies sell directly to their consumers. I think changing the business model will be the catalyst to this change.
In the Radar post, "Stop Giving the Newspapers Your Advice. They Don't Need it," Joshua-Michele Ross says: "The failure of newspapers is not a failure of imagination or foresight nor is it a failure of individuals. This kind of failure is the hallmark of all institutions in the face of tectonic disruption. Institutions are a set of agreements that perpetuate a social order beyond individual intention or tenure. Changing those agreements is costly and time-consuming." And he asks: "From the Radar audience I would like to ask for historical examples of institutions that have effectively responded to disruption? What are the lessons that we can draw from them?"
Industries and companies have transformed when they re-defined their business model to improve the value they deliver to customers and raising the bar among competitors. Here are three examples:
- IBM. Transformed the company from a hardware business model to a service business model to continue to be the best solution for their customers' information technology needs.
- P&G. Stopped "milking" established brands and eroding profit margins by going back to their old business model: continuously introduce new products that improve consumer lives.
- The Railroad Industry. Transformed the business model from shipping freight on trains to being an intermodal service (seamless, integrated shipping from end-point to end-point) to continue to be the most efficient transportation solution.
In each case above, the business got away from defining their business model by their existing infrastructure and defined based on improving customer value. And in each case, technology played a role in the enabling the improvement and around which the infrastructure was re-organized.
Today, interactive communication technologies empower Media companies to transform from a content distribution model to a communication facilitation model. When facilitating communication, media will enable content creators to find their core audience and refine communication to get their message across, incent the audience to communicate the message to their peers, create a context in which individuals and vendors can identify the relevant and compelling information to share and develop a sense of community/shared values.
Additionally, interactive technology empowers Media companies to market directly to consumers and ask they to pay instead of relying on 3rd parties.
