The domination of the information market by mainstream media has rested upon a traditional business model for many years, but it seems to be in rapid decline. Mass media face a new challenge to create distinctive value for tech-savvy young consumers, believes Andrew Heyward, former President of CBS News, and a leading American expert in innovative digital technologies. Heyward, also a principal in the boutique strategy firm MarketspaceNext LLC and a senior advisor to Monitor Group, will participate in the Future Media Forum which will take place in RIA Novosti on June 19, and will report on how to build successful media companies in the XXI century.
The traditional media industry is facing great challenges nowadays: due to the high speed of ICT development media business, work flow, and the way audiences have significantly changed. What do you see as the greatest challenge for traditional/editorial mass media in the USA and worldwide?
What was once a comfortable oligopoly for mainstream media has fragmented into a marketplace of multiple choices for entertainment and information – and power has shifted from the provider to the customer. The greatest challenge is for mass media companies to create distinctive value for tech-savvy young consumers and get paid for it as traditional business models erode.
Are there any common points in digital strategies of different media or do always turn a new leaf when a company comes to you and asks for advice?
As Tolstoy said in Anna Karenina, “All happy families are alike. Every unhappy family is unhappy in its own way.” We like to say in our practice that “every company is a media company,” meaning that every company that has customers is now using digital media to connect with them. So while there are best practices and principles from which everyone can benefit, I always “turn a new leaf” as you say, and work with my clients to find unique challenges and opportunities around digital strategy.
Do you believe – and do you see appropriate examples in your practice – that the digital part of a media business (Internet, mobile) within a media house returns more ads and money than paper? In Russia the print business is still more profitable than virtual one.
Not only does the core business generate more revenue in virtually all companies that still publish a print product, but traditional sources of revenue pay for much of the content that appears online and on mobile devices. The same is true for television: on-air advertising and cable subscription fees bring in the lion’s share of revenue, even as consumers shift more of their time to digital platforms. Therefore it will be challenging to sustain high-quality content if digital revenues don’t make up for what is lost on the print side.
Do you believe that print media will definitely die all over the world? If yes, why?
‘Definitely’ is a strong word, and some forms of print will survive for a long time, but it seems inevitable that digital platforms will supersede print eventually. It’s not just convenience and timeliness, but the enhanced interactive services and social connections that digital products allow, not to mention a rising generation of consumers that has no legacy of print media.
What do you think about the competition between professional media and UGC for the audiences’ time and attention? Could they become real competitors in the future or will they always go in parallel?
I think the infatuation with UGC as a replacement for professional content is already starting to fade: you need look no further than YouTube’s funding of professionally produced channels. Professional and amateur content will not only move “in parallel” as you say, but they will complement one another, particularly in the news arena. And there is also the exciting prospect of work done by talented people who now have access to the tools they need both to create and distribute content, without relying on a traditional media parent. Is that professional content or UGC? It doesn’t matter.
We often see in the Internet that non media corporations like Google and Facebook get maximum ads and profit – and not media like newspapers. Does this mean that media will face growing competition for a long time?
Yes, there are many challenging years ahead for newspaper companies as readers and revenues migrate to digital platforms. A recent study from the Project for Excellence in Journalism estimated that newspapers are losing $7 in revenue for every digital dollar they gain and blamed “cultural inertia” – resistance to change in the companies themselves - for much of the problem.
Social networks are the most discussed phenomenon globally. How do you see the future of the networks and what would be the next stage of their development?
The major social networks will work hard to establish that they are effective advertising platforms – witness the saturation media coverage of Facebook’s IPO and valuation. Facebook has achieved astonishing reach and enviable levels of audience engagement, and Twitter has become a leading provider of bite-sized commentary and “breaking news” for many of its users. The next stage of their development will be an expanded effort to convert scale and engagement into dollars.
You also work as an advisor to startup firms. What are the parts of media business where they can be mostly successful and where small companies can grow fast?
It’s always dangerous to generalize, but most media startups that I’ve seen use technology to allow users to find, consume, and share media more effectively rather than inventing new forms of content. The Flipboard apps for the smartphone and tablet are a great example. I’m also involved with two companies that are crunching huge amounts of data to create new insights and solutions for advertisers – again, finding a way to build new businesses on top of existing ones.
What media projects inspire you at the moment?
I’m involved in a series of workshops around the United States called “The Next Big Thing in Digital News Innovation,” produced by the Paley Center for Media in New York. We look for promising startups in journalism and related areas and help them tell their story. Maybe we’ll find the answer to all the problems we’ve been discussing here!
The US segment of the WWW always sets new trends which spread globally during some years. What are the newest trends in 2012?
From what I can see, Russia is doing plenty of trendsetting of its own, so I should probably be asking YOU that question. In any case, you won’t be surprised to hear that a popular abbreviation among U.S. venture capitalists and media mavens these days is “so-lo-mo” – social/local/mobile. My version would be “so-lo-mo-glo” – for global. I believe the “next big thing” will be global networks of like-minded people who use technology and ubiquitously connected devices to collaborate around interests, passions, and opportunities.
