Sylvia Chan-Olmsted is one of the leading scholars of media economics, and she stopped by the University of Navarra Dec. 13 to chat about some of the trends she is seeing in the industry.
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| “Media companies need to translate data into intelligence.” |
Chan-Olmsted, a professor at the University of Florida, singled out three trends:
1. There is a new value chain in media. Content is becoming “unbundled”, meaning users can buy individual movies, TV shows, or songs without having to pay for products they don’t want.
Content is becoming crowd-sourced, meaning that consumers are recommending things to each other through social media.
And the major media companies are harnessing their data about users to recommend media products and even create content based on their customers’ tastes.
Media platforms like
YouTube,
Apple,
Amazon,
Hulu, and
Facebook are all starting to invest billions of dollars in original content to challenge
Netflix, whose business model has disrupted the movie studios, TV networks, and cable services.
2. The importance of consumer engagement. Media companies that produce movies, TV series, music, video games, and journalism are all looking for ways to engage users before, during, and after their products are consumed.
For example, they might tease a series premier in social media, encourage conversation about it in social media, and join the discussion of comments and criticisms after it is displayed.
This engagement translates into loyalty and enthusiasm for a product, which has an economic value.
3.
New tools of data analysis are emerging to help media companies identify their most engaged customers. “Media companies need to translate data into intelligence,” she said. In that way, they can encourage brand loyalty and generate more revenue from their customers.
Consumers prefer choice
Chan-Olmsted said that surveys of young consumers in particular show they are willing to pay for several media services–Amazon, Netflix, Spotify, for example–in order to have greater choice.
She has done the same herself. When she and her family realized that they were subscribing to several of these services and that they were no longer watching programs on cable, they joined the legions of consumers who cut their cable service.
Implications for journalism
She did not comment much about journalism, but the trends she mentioned have implications for news media.
The U.K.’s Guardian announced recently that it now “has 500,000 regular paying supporters“, 80% of whom take “digital subscriptions or memberships”, according to Katharine Viner, editor-in-chief. It is notable that this commercial enterprise asks its users to make “contributions” to support the high cost of its investigative journalism. Also notable is that revenue from users now exceeds that produced by advertisers, as reported in Nieman Lab.
In other words, the Guardian is attempting to monetize the engagement of its users–including those who don’t currently pay– to offset the losses it has suffered in the flight of print advertisers to digital platforms like Google and Facebook.
And they are not the only ones, as I have written about in previous blog posts, and as Forbes has reported. Publishers are developing successful models to get support from users for journalism that holds business and political leaders accountable.
Related:
The audiences are in charge: Are publishers listening?
How journalists can sell advertising without selling their soul
Chasing clicks isn’t bringing in readers or money
How high-quality, credible content wins in the long run
In Latin America, women are making their mark in digital news startups
The top reason globally for paying for news? Mobile access
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