The disconnect between consumers and major media

Steve Safran May 16th, 2007

We want our content, and we want it all over the place. We want it to be original and specific to each platform as well as multiplatform. We, the consumers define, our own entertainment experience. But media companies still aren’t redeploying resources into new media to keep up with demand. The Streaming Media East 2007 panel, “The Streaming Disconnect Between Consumers & Major Media” looked at this issue and talked about why the problem still exists.

The panel:

Jeff Kaufman, VP Content and Programming, nbbc
Ron Berryman, Senior VP, GM Television Stations, Fox Interactive Media
Mariana Danilovic, VP Business Development, MediaZone
John Jurgensen, Digital entertainment reporter, Wall Street Journal
Jim Sexton, SVP Interactive Brands, Scripps Networks

Moderator: Tejpaul Bhatia, President, Tej Media Networks, Inc

The notes:

How to define “the new consumer” for entertainment?

Sexton: They have a short attention span and they’re hard to predict. It makes it harder for media companies to predict longterm consumer behavior.

Jurgensen: It’s important to note that “yesterday’s consumer” is still with us. That puts people like Jim in a pretty tough position. People are gravitating to a sense of ownership to sites and services because they got there early or found a niche. If they feel they own it they put time into it, they write reviews – it’s a real passion for some people. Any way you can tap into that aspect of ownership by recognizing those people by rewarding or honoring those people – that’s important.

Berryman: There are several different kinds of content and segments out there. It’s a matter of looking at those segments and the demand. It’s a viral community – we continue to test. It’s a challenge for us.

Danilovic: Our media company’s relationship with consumers is fundamentally changing. Even if we’re going directly to our consumers, we’re not really selling the product. As media companies, we have to overcome the obstacle of…

Do consumers segment their entertainment experience?

Kaufman: There is a shift in the way we need to figure out the consumer. The traditional way is to look at what most of the people are going to do most of the time. It’s a lot harder to proscribe “this is the only place you can interact with a friend.” People segment out their behavior situationally. But I don’t think mentally in terms of their own personal brand I don’t think people do so – I think they take pride in being undefinable.

Berryman: There are different types of segments. If you have good content – do people want to be defined? Not so much. There is a group that is undefinable – it’s going to be very difficult to get to those people. If we build a business and close it and we expect people to come here, it’s going to be very difficult. If we open it and distribute the content, we’ll be in much better shape.

Kaufman: It’s not a question of substituting the new model for the old model. It’s a matter of incorporating new methods into the traditional media business. You need to make yourselves more flexible. The ability to be flexible is more important than the ability to predict customer behavior.

Sexton: The old model is still a good model. It’s just part of what’s expected. But beyond that there are some pretty good growth opportunities. We don’t want to abandon the old stuff – it’s still expected.

Danilovic: One of the major trends I couldn’t have predicted 10 years ago when I started is that the business is going global – if you look at TV and film today it’s still territorial. All of a sudden you can put a television channel online and you’re global, and there’s this power of the global consumer and that changes the way business is done today.

Jurgenson: The common misconception is that the web consumer is omnivorous and all over the web, and in fact most people interact with this entertainment content in recognizable patterns. They have small groups of websites and blogs they visit daily. Through those patterns they discover other sites. I think a lot of people still depend on aggregators, which are always going to be important when there’s such a load of material out there. I’m interested in how these new serial stories are going to succeed online. Series are coming online – two minutes apiece, one a day, 130 episodes. I’m curious to see how those will work out. Will this keep people there?

Kaufman: It shows how there aren’t really sharply defined building blocks. Success depends on what the goals were of the production. If you’re taking new content and applying old metrics, it doesn’t work. If you’re applying broadcast ratings to online webisodes – are those even compatible? It’s not about being beholden to any one model – it’s about being flexible.

Danilovic: Another trend – going to professional-produced media that’s available to broadband media that wasn’t available before. We’re putting up the world feed of Wimbledon – nine simultaneous video feeds, longform video highlights, archival footage, player interviews – lots of new ways to get information you don’t get on television.

Berryman: The future for paid content isn’t very good. There are some opportunities, but download to purchase is a tough way to go.

Sexton: The one place where full-length programming has worked for us is with passionate audiences. Example: woodworking. We’ve got 20-minute episodes that the woodworking audience loves. The crazy one is quilting. We’ve got 10 years of a quilting show that just went off the air. We took all 500 hours and we put them online. It’s going crazy! We’ve bought the URL QuiltersGoneWild.com. We’ll see how it goes.

Jurgensen: It’s tough for big companies to find niches and create for them. It’s easier for niches to serve themselves. Web 2.0 has changed the game. For me, Web 2.0 means interactive services, the Diggs of the world where you can vote on stories. It’s common knowledge that participatory media is participated in by a small percentage of the audience. It’s not necessarily my job to find those people who could become audience members, but it’s an interesting problem. How do you measure the numbers? Are 10-20 thousand views good?

Kaufman: It’s not old media vs new media when it comes to chances for success. It comes down to a willingness to embrace trying new things. Obviously there are advantages and disadvantages you can weight. One of the great things about Web 2.0 is that there aren’t barriers to entry if you’re willing to take risks.

I used to work at MTV, which helped launch reality television. When it started reality television, people said it was the death of sitcoms and dramas. I always said it was just another way of communicating stories. You have to think of the different ways technology works. Storytelling is still bulletproof – any new technology enhances the ways you can tell stories.

Berryman: We’ve put more than $2 billion into the web in the past two years. Traditional media companies have to keep reinventing ourselves. If we don’t reinvent ourselves, we’ll be like the local TV stations that keep losing people to the web.

Sexton: Traditional media companies need to get over themselves a bit. In Web 2.0 the audience gets to tell you what they think. Sometimes it’s unpleasant. So traditional media has to get comfortable with audience participation. They also have to get comfortable with “good enough.” Those high production costs aren’t needed online. We have found ourselves spending too much time on graphics and high-quality production. We finally said “no we’re not going to spend that” because it just doesn’t matter. In fact, it’s better if it looks a little rougher.

Jurgensen: The importance of story can’t be underestimated. The power of personality is really important, too — the idea of building a community around certain personalities. The idea is that you really attach yourself to that person – the idea of a minor start system is an interesting thing.

Berryman: We’re doing that with the Sun in the UK –it’s a little racy, and it’s very popular there.

Kaufman: The biggest challenge perceived by the industry is the loss of control. You can’t force people to encounter your stuff the way you want. People have an unlimited choice of where else to go. You have two choices – you can shake your fist at that and go out of business, or you can embrace that and say “How can I use that as an opportunity?” The ultimate result of that is more total brand interactions. Ultimately it’s much more of an opportunity than a challenge. I don’t think everyone in the media industry is ready to do this just yet.

Danilovic: There are a lot of hurdles – we thought the biggest hurdle was going to be creating a global media marketplace. When you create international portals and try to put advertising into them – there are so many issues. Advertising is not globalized, there isn’t the infrastructure for that. We can deliver it from a technological perspective, but to implement it on a country-by-country basis there isn’t a model.

Sexton: The biggest challenge is a control issue. You take an old brand and put it on new platforms and – who controls the brand? If you have a traditional structure then who is responsible for the brand? It can only be successful if it’s flexible. We’ve gotten into it with our TV people when they’ve wanted to control stuff online. The same thing can be said of web staffers who want to control what’s on handhelds. We’re figuring this stuff out.

Jurgensen: Companies have to manage expectations. A lot of people see the explosion of online video as a potential goldmine. With the opportunities for viewing growing every day – trying to punch through and getting a mega hit is going to be tough. The idea of what they want their online series to accomplish and what they’re willing to spend to get that is going to be a balance.

Berryman: Our biggest challenge moving forward: How do we create enough value in content to make this business successful for us and the consumer?

Kaufman: There’s a huge challenge in terms of the speed of evolution in technology and consumer behavior. Television had 70 years to evolve. The potential for change happens every 20 minutes now. That speed of evolution happens so quickly.