It’s easy to get lost in the mountain of information we now access through the Internet. Perhaps, a case of information overload. But, tying these bits of information together is a great way to get a glimpse at the future of media.
This seems particularly true when looking at the decline of physical media. Digital technology will ultimately become the predominant way consumers access their media sources moving forward. Media that can economically go digital, ultimately will. Consumers will pick and choose which media to include in their personal media bubbles. I coined the term imedia to describe this behavior. The transition from mass media to personalized imedia networks presents a real challenge for commercial mass media outlets. Consider how the music industry was forced to shift their business model from selling CD’s for $18.00 each to hawking online singles for 99 cents each. The consumer chose digital convenience over a physical package and the music industry followed – RIAA lawsuits and all! The same story is now being played out again with video games. In advertising, while printed newspapers and magazines have been the first to witness this transformation with major losses in readers and ad revenues, the digital wave will eventually impact all media.
Video is next. Traditional television networks are being disrupted by streaming media. Declines in network TV viewers and the growth of online distributors, like Netflix and Hulu, support this point. Additionally, a survey from GfK says a quarter of all Americans don’t subscribe to any pay-TV service. Looking deeper in this research, cable cord-cutting is particularly popular with millennials. Since habits formed now will be hard to break, millennials will drive future demand for wireless content. So, the die is cast. Advertising media companies have been slow to react because they fear their “loss of influence” and they presently lack a viable revenue model to replace the current media advertising ecosystem. Think Nielsen ratings. Unfortunately for them, slowed reaction time has meant that digital TV networks are becoming viable media businesses built for 21st century economics. Great for consumers. Not so great for legacy media outlets and the ad industry that supports them.
The real question, yet to be answered, is how commercial media can profitably switch from selling a mass advertising audience to serving individual users. Stay tuned.