I was asked to talk at TechTalk IN Sheffield last week on the challenges facing media and I thought I would summarise those thoughts in my blog.  In essence, I categorised these challenges as finding, engaging, monetising and protecting our potential customers.

Find

This is all about audience fragmentation.  The days of limited and distinct media channels are over.  When I was young, life was much simpler – four TV channels, established newspapers and magazines, traditional radio stations and no overlap between any of them.  Then along came Sky to fragment my TV viewing significantly and I started to channel surfe endlessly.  But when I started using the Internet, I stopped relying on newspapers and magazines for my general and niche news, I started to listen to Blues radio stations broadcasting from the USA and lately have been catching up my TV viewing and watching motorbike reviews through OTT content.  In other words, I have substantially fragmented my media viewing and at the same time converged my multi-media consumption through one channel – the Internet.  Add to this the dramatic fall in the cost of producing media and I no longer rely on a select few to originate my favourite content.  I now spend time watching the best of YouTube, reading Blogs on the US election, watch reviews on my summer holiday options and eagerly wait to see whether my eBay bid has been successful.

So what is the net result of all this fragmentation with convergence with content ubiquity?  Well first media companies have less market share – look at ITV’s performance over the last three years. Second, advertising targeting has become much more complicated across multiple channels and multiple services creating the rise of Media Buying businesses.  Most importantly consumers are spreading their time and media dollars around and becoming more discerning by the day.  Mass media was a child of the industrial society but today targeted media is all about the informational society. This revolution is powered by the production and distribution advances fuelled by information technologies and has resulted in the lose of centres of gravity around media distribution.

Engage

Trick one in the engagement stacks is the customer experience.  The interface has to be easy, contextual, comprehensive, compelling, multi-generational (appeals to both kids and grandparenrts alike) and fast.  In the world of television, in which Amino predominately plays, this is rrequirement is challenging to deliver.  No surprise that Sky avoids changing their interface if at all possible because of the call centre activity it generates.  I have blogged previously on the challenges of offering large amounts of content through a device which such limited real estate.  Our televisions – or goggle boxes, cultural barbiturates, glass teats, electronic babysitters as they are often referred too - are a 10ft experience.  The word television comes for the Greek tele meaning distant and the Latin visio which means seeing.  So television is literally all about distant viewing and the interface must suit that challenging fact.  Safe to say that there is still a lot of innovation needed here.

As a quick diversion, how about some interesting TV facts. Did you know that one in every four Americans have appeared on television?  Also that the first couple to be shown in bed together on US prime time TV were Fred and Wilma Flintstone? The first TV commercial ever showed a Bulova watch ticking onscreen for exactly 60 seconds – screened in 1941. Lastly, during the Super Bowl the average cost of a single 30-second TV spot during the game (seen by 90 million viewers) has reached $2.7 million (as of February 2008).

But the key to engaging the media customer is knowing their likes and dislikes.  The old world of readers, viewers and listeners is dead – now it is about customers and most media companies are struggling to transition to this paradigm.  As George Patton said, ‘if everyone is thinking alike, then somebody isn’t thinking’.  If we continue to treat all TV viewers the same then we look stupid because they are not.  It is not enough to rely on programming content and day parts to segment content.  People don’t conform to those stereotypes any longer – if indeed they ever did.  I like Lovefilm’s recommendation engine offering a ‘people like you watch DVDs like this’.  This is a good start but in my mind true engagement will only happen when the industry respects their customers enough to make the effort to learn more about them.

I believe the social aspect of television is also a key engagement ingredient.  Soaps have played to this social advantage for years – we all like to be part of the water cooler conversation on what happened last night on Eastenders or Coronation Street. Programmes like Strictly Come Dancing and X-Factor have played to the effect of mass social voting and some music voting channels have allowed texting to become part of the programming.  But….  none of this competes with the Bellyvision experience of the PC with iPlayer, Facebook, Instant Messenger, email and RSS feeds all converging on one screen.  This is the new generational experience and if our industry is going to engage this new generation then TV must become more overtly social.  The pinnacle of social TV is all about harnessing the power of advocacy. LastFM and LaunchCast demonstrated this with music where you could tune it to either your own personalised stream of songs or into your mates’ feed to experience want works for them.  We all trust each others opinions and biases much more than we do any corporate entity.  If you know me and respect my opinion and I say that Wintersleep are a great new group then you are a ton more likely to try them out than if an advertising message attempts to do the same thing.  That’s the power of advocacy.

Monetise

There are four ways to fund the creation and distribution of media – advertising, direct sales, subscription and public subsidies.

A guy called John Wanamaker said in ’Half the money I spend on advertising is wasted; the trouble is I don’t know which half’. Sensible sentiment in the early twentieth century but incredibly some 100 years later we are still in the same situation. Similarly in the 1920s, Will Rogers thought ’advertising is the art of convincing people to spend money they don’t have for something they don’t need’. Maybe more the case today than it has ever been.  Let’s face it, we are all bombarded by advertising messages.  We are exposed to about 245 ad exposures daily, 108 from TV, 34 radio and 112 from print.  Add the 3000 ambient messages everyone sees on product labels, signage etc and breaking through that clutter is getting very difficult. It gets even worse, we have more and more control over receiving messages.  My Dad mutes the TV through every ad break.  My kids can fast forward at 30x through all PVR’d ads. I swap to my Blackberry or mobile phone as soon as the ads start. So adding context and relevance to those messages is critical and to do that we have to know our customers better.

Direct sales are driven by CDs and DVDs but these are reducing.  The video industries great hope is BlueRay.  Maybe, maybe not.  I think that the studios will be forced to collapse the distribution windows and drive towards simultaneous releases to cinemas and the living room through VoD.  Not for a couple of years but it will happen.

Telcos still put their trust in the subscription model. Pay-as-you-go has taken a substantial proportion of the mobile market and I would expect IPTV to move more that way (the model I choose for BT Vision so note some bias there). The big question is how recession proof the subscription model will prove to be?  Traditionally yes, but maybe not through this particularly severe credit crunch.

The public subsidy model is the most stress free route.  God bless the BBC.  Great content comes from this model.  But at what cost?  It has killed a creative free market in the UK.

Protect

Protecting our customers is an important part of being successful in media. In the 1980’s it was all about Protecting Personal Data - backing up your critical data on a regular basis.  In the 1990’s we were concerned with Protecting Personal Computer - all-in-one protection packages including virus protection.  In the 2000’s, we began recognising the threats to Personal Information – needed anti-phising functionality.  Today, media companies need to think about Protection People and Relationships.  Too many groomers and bullies are attacking young people online.  To combat this, software needs to analyse human behaviour relationships online – check out Crisp Thinking (www.crispthinking.com) for an example of this type of solution.

So everyone must focus on solutions to the find, engage, monetise and protect conundrum. The world is changing because our customers are demanding more whilst exerting greater control.  Only by knowing what they do and what they want will we find the solution.  Viva la difference…