What many media companies do not understand about the audience

Ty Ahmad-Taylor is the founder and CEO of FanFeedr, a custom sports news service. Prior to that, he was senior vice president of product strategy and development at Viacom, and before that at Comcast.

I worked on two large cable TV networks. And both believed, and continue to believe that they work in the television business.
It seems logical, but the problem is that this is not true. And so everywhere in the media industry. Most companies are confident that their business is to distribute content through specific channels. This misunderstanding often leads to poor strategy and its useless implementation. (Read on, I will give fresh examples).

If you produce television shows, films or music, your business is an audience. The same goes for books, magazines, newspapers. Michael J. Wolf, former president of MTV Networks, described the problem in a conversation with me: “A television company is a matter of brand and what to show. Look at networks like Syfy, Cartoon Network, or Nickelodeon. They are not without reason such. ”

The TV distribution business is the patrimony of distributors: cable networks, satellites and optical fiber. In contrast to them, the business audience is based on recruiting as many people as possible who will watch certain content, and then make money either through direct pay per view, or by advertising the content.

In short, the television business is based on audience reach and frequency: how many people watch the show, and how often they watch it.

In trade, you open a store as close to the buyer as possible. A similar single-source strategy is applied by most media companies. I repeated this comparison endlessly while working for my former employers. We spent a lot of time building our brand's all-in-one radiant temple in Paukipsi, New York, while most of our customers were on Fifth Avenue in Manhattan, Ginza in Tokyo, and Bond Street in London.

The main misconception was that we needed to own a buyer on our “land”, because that was the only way we could control its consumption. But when you are a content producer, who in essence is the majority of media companies, you need to think about the content, and not about controlling the ways in which the consumer gets to the content.

Moreover, the most valuable piece is not the banners around the video, but all the ads that are “sewn” into the video, or built into the video player on top of it. The viewer watches what the branded player shows, this small piece of code that downloads and plays video. It will easily reproduce it on any third-party site.

The obvious way to grow a media company is to actively pursue the consumer wherever he is used to grazing. (And what is Fifth Avenue of digital content with us? Of course, social networks. Facebook, Twitter and MySpace have more visits per month, per day, per year than any media site.)

Yes, of course, many companies use the opposite approach - they introduce fees where they never existed, complicating access to their content, creating new barriers to consumption where there were few of them. Companies of all stripes are guilty of this strategic miscalculation: the New York Times (also my former employer) introduces paid access to most of its content, most cable network shows are almost impossible to watch online legally, and for a fee on iTunes - please restrict movies in distribution through the network, and Sony has developed a whole concept of "digital lock".

All this is a bad idea. Just this week there was another example: Warner Bros. decided to show their DVDs through Netflix. Such a decision will narrow the audience of Warner Bros. films as soon as they leave cinemas.

If you do not take Hulu into account, then you can hardly find examples of a sound strategy. Another rare exception is one of the smallest broadcast networks - CW. In 2007-2008, this company refused to show the last five episodes of its little hit “Gossip Girl” on its website. She made it possible to view them only through iTunes. As a result, CW found that the site had lost traffic and the overall potential audience was reduced.

CW tried to get everyone to move to Spideripsi. Now she shows the series simultaneously on the air and on the network, thereby recognizing that the audience is interested in content, not the distribution channel. At a time when the company was experimenting, showing the series only on TV, the number of illegal views grew by 45%.

Distributing content across different channels in real time - and even to the detriment of existing directions - is not just the right way. Time will show that this is the only way. The key point that media companies need to keep in mind is that the value of the consumer who does not watch your product is zero.

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Translator's note.
See additional materials on this topic:
To hell with your site! We need to use other people's sites.
Using Twitter as a distribution channel.
How do mass media use Twitter? (An overview of Western media practices.)
How can content producers benefit from pirates?