Digital Business insights: New media

NEARLY 200 years ago in Europe, the sale of news and the sale of advertising were first combined together in the form of the newspaper.

The sale of news was a vehicle and platform for the sale of advertising, which is what made the newspaper proprietors their money.

The ability to aggregate a large audience is what made newspapers and magazines valuable to advertisers. The same applied to the newer 20th century media of television and radio.

All these media were able to offer and provide a large audience, with broad and sometimes particular characteristics - young women, business people, computer owners, football enthusiasts, dog lovers and so on.

With the advent of the internet, these familiar and comfortable media options began to be challenged by multitudes of new websites offering information packaged in many different ways.

Because the cost of creating and managing a website was much less than the cost of publishing in other media, there was a proliferation of experiments and new offerings into the online marketplace, some successful and many unsuccessful, but nobody really cared.

It was possible to publish and see, 'launch and learn' and some new ventures were incredibly successful which prompted others to try their luck as well.

The technology also became cheaper, easier to use, faster to deploy and more powerful.

What used to cost millions or hundreds of thousands of dollars, and take months to deliver now cost thousands or hundreds and could be deployed in weeks or even days.

The risk and cost of entry was no longer a barrier. Advertising sites no longer needed any direct connection to news and publishing. They could focus on a single product or service, or even offer all products and services, and could do this in a variety of different ways.

Today, advertising messages can be delivered across a huge range of offline and online channels. But as a result the audience is much harder to target and reach effectively.

With the almost universal use of Google (or Baidu in China) to find information, the dominance of push (advertising) has shifted to the dominance of pull (search), and the power has shifted with it, from the vendor to the customer.

So for traditional media companies, incorporating new media alongside their traditional model doesn't address the issue of the new customer. Expectations have changed.

Buying successful online advertising sites would seem like the ideal solution - Seek, Carsales, REA, Domain, but it is only a short-term fix.

All these sites will be undermined or disintermediated in due course. They are a vendor's solution to a problem not a customer's and only postpone for a while an inevitable change.

Which has already begun.

There is a natural evolution under way from information to knowledge, and from push to pull.

These two currents of change are fundamental and remorseless. They are concurrent and explain much of the disruption experienced across all sectors as well as revealing new opportunities for those with eyes wide open.

The real strength of newspapers and media in general is journalism, insight and enquiry, but not as we have known it.

Journalism has to be refocused onto the new customer need (remember the move to pull from push). This requires a total shift in point of view. Not an easy thing to do.

And online sites have to be refocused on customer solutions not vendor solutions and on the new technology enabled ecosystems that are being created around shared value.

There is no room in this post to spell out exactly what this means for every sector of society. But get any part of the equation wrong and it "won't fly". It might get off the ground but not sustainably.

iTunes provides a clue to what I mean.

iTunes took the control of published content from the hands of the traditional 'editors' and 'publishers' and put it into the customer's hands.

The customer selected their album of songs and performances, their compilation, their collection. And were willing to pay.

The news media need to understand what this means for them.

People want knowledge and insights, as well as entertainment. And are willing to pay.

But to give customers what they want and actually need to be successful in the 21^st century requires real vision and culture change in media organisations and it's not going to happen easily if at all.

In Australia, News and Fairfax are the result of decades of evolution. It has been hard enough for them to take a small step in this new digital revolution and add websites into their business models. But now a much, much bigger step needs to be made.

To get safely above the ongoing digital disruptive flood demands creating a customer driven platform that can deliver 'knowledge' on all subjects across any channel, medium or device.

That puts journalists back in the box seat and the 'right' content is king.

Putting current 'news content' behind paywalls is a misguided response and won't work.

It is not about whether content is free or not. It is about whether content is valuable to customers.

Propaganda isn't valuable and every time Mr Murdoch demands that his journalists beat up on the government or climate change or whatever, he fails to understand what has changed forever.

Power has shifted to the customer and has to be respected and incorporated in a shared value model or fail.

Professor Porter at Harvard has seen the writing on the wall. Shared value is the new paradigm.

Ignore shared value and the new customer will just use Google as always and find newer, and other, sources for real and useful news and information.

People will pay for content online - see iTunes example above.

But they will only sustainably pay for really useful information, insights and knowledge supported by software tools that make it easily accessible and understandable = knowledge.

It is not about the device, the channel or the platform. It is about what is delivered. It is not about the menu it is about the meal.

It is not about the editor's or the proprietor's view of news, it is about the customer's. That is a tough one for existing owners and managers to comprehend.

That means a new business model for most existing media empires and they are not up to the change or the challenge. Not at the moment.

Maybe the ABC is, but that is another story.

- John Sheridan, August 2013.

John Sheridan is CEO of Digital Business insights, an organisation based in Brisbane, Australia, which focuses on helping organisations and communities adapt to, and flourish in, the new digital world. He is the author of Connecting the Dots and getting more out of the digital revolution. Digital Business insights has been researching and analysing the digital revolution for more than 12 years and has surveyed more than 50,000 businesses, conducting in-depth case study analysis on more than 350 organisations and digital entrepreneurs.

www.db-insights.com

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