Experts Disrupt The Favorite Narratives

Michael Hedges October 29, 2012 Follow on Twitter

Gather together any group of media luminaries these days and money is the first if not the only topic. From the media side the web remains the culprit, hogging the screens and not sharing. Outside experts, however, urge caution lest the golden goose be strangled.

German media executives and their watchers gathered last week (October 24-26) for the annual Medientage München, mostly in a disruptive mood. Broadcasters and publishers complained about their competitive disadvantage against new media. Experts in abundance offered views on everything from advertising to paywalls, centered largely on money and how to find it.

“We need regulatory consistency,” said ProSiebenSat.1 executive Conrad Albert, complaining that Google is entering the television arena with new content on YouTube channels and new media generally operate under different rules. Deutsche Telekom CEO René Obermann complained that Google isn’t paying sufficiently for broadband development. After that, Bavarian Prime Minister Horst Seehofer promised “as much freedom as possible and as few political and legal hurdles as necessary.”

Google grousing completed, the first morning discussion turned to paywalls and the survival of the printed media. “We all agree that we need to change our business model,” said Frankfurter Allgemeine Zeitung (FAZ) general director Tobias Trevisan. “This also means the paywall model.” Every month, it seems, another German publisher takes web content behind a paywall and considers ending print publication.

Not so fast, said one of experts. “If the product disappears from the aircraft shelves, from the hotel, from the newsstands it becomes invisible very fast,” offered Roland Berger consultant Alexander Mogg,” which is the kiss of death.

On the advertising side, “big agencies” have the German media market in “a stranglehold,” said advertising expert Thomas Koch, quoted by meedia.de (October 25). “The M in GroupM is probably not for media but for Mephisto,” referring to Goethe’s devil in Faust. Big media buyers are “parasites,” he opined, creating a dependency on ad trading discounts. Didn’t Rupert Murdoch once call Google a parasite?

Media people are asking the wrong questions, offered Harvard Business School professor Clayton Christensen, a noted expert on disruptive innovation. In his theory applied to media consumption he argued for providing solutions rather than audience targets. As an example, magazines and newspapers once helped kill time in a doctor’s waiting room. Now people check the news or email or play Angry Birds on their smartphones. 

The lesson of the photographic camera applies to the media business, he said citing the oft used example. When the digital age arrived cameras separated into two products; low cost picture taking – and sharing – via smartphones and a high-end specialty product. There is no “middle” product. He also mentioned that the music industry now makes more money from live events and merchandising than albums.

“Media managers should ask themselves whether their organization does such a tremendous job satisfying the consumer’s needs that they would pay for this content,” he said blasting paywalls. “This is especially true if you are in a moving environment with other organizations offering very similar content for free. On top of that, you should not make the mistake of believing that you can charge money for content just because it costs money to produce it.”

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