January 2nd, 2008
Instead of the usual predictable predictions, I thought I would ring in the new year with five principles that I believe will guide the ongoing transformation of media companies.
Networks are the new distribution channels
People are more powerful than institutions
The best content comes from many sources
Search still rules
Advertising must create value
Media used to be about controlling monopoly distribution channels. On the web, the network is the new distribution channel, and it can’t be controlled in the same way by a single media company. But there is huge power in networks. Just ask Google, the first media company to harness the network.
The most successful media companies will be those that learn to how build networks and harness network effects. This requires a mindset that completely contradicts traditional media business practices. Remember, Google doesn’t own the web. It doesn’t control the web. Google harnesses the power of the web by analyzing how websites link to each other.
Media used to be about institutions — nameless, faceless brands. But on the web, people are empowered. Individuals matter more — but they matter most when connected as a network. Networks of individuals will transcended traditional media company and media brand divisions. (The last bit is a combo of principles #1 and #2)
The most successful media companies in 2008 will be those that empower and create networks of individuals — both outside and inside their corporate walls.
So many people use search engines on the web because they understand intuitively that search gives them access to ALL the content on the web. Most media companies are still limited on the web to delivering their own content. In the age of limited distribution channels, this made sense.
But on the web, where consumers can access any content from any source, and where high-quality content sources continue to proliferate (on top of all the garbage), media companies cannot serve consumers well just by delivering their own content.
The most success media companies will be those that offer consumers links to the best content on the web, not just their own content (and also those media companies that harness the “power of the link” — related to #1 and #2).
If media companies don’t do this, Google and other web-native aggregators will (and already do).
Search is currently the most powerful force on the web. Any media company that fails to embrace search, does so at their own peril. Search is, at least for now, the new newsstand.
The most successful media companies will be those that harness the power of search. The New York Times made perhaps the most striking acknowledgment of this reality by basing the decision to kill TimesSelect on the need to increase search traffic by exposing all of their content to search engines.
Google turned search advertising into the most profitable media business on the web by following the basic principle that advertising must create value for consumers. Search advertising is so powerful because the ads are relevant and USEFUL.
The most successful new advertising models will be those that create huge value for consumers, not those that manipulate users or violate their privacy (i.e. be like Google, not Facebook)