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BREAKING NEWS & VIEWS
Auletta: Media Enters the Age of ‘Maybe Models’ Keeping ahead of a terrifically accelerated technological and media landscape is one of the biggest challenges facing the industry, he said. Change is the challenge. In our recent past it only took nine years for the Internet to become ubiquitous, but before that it took broadcast TV several decades to hit optimal penetration and before that 51 years for the phone to become a universal appliance, Auletta pointed out. As a result of an exponentially increasing pace of change, media companies need to elevate engineers to a higher place in their food chain. Previous to his appearance at SIIA, Auletta told the organization in an interview that old media are struggling against Google’s inherent advantage as an endemic Web company. The only business Google has to defend is a new and growing one: search. Old media work under an inherent inhibition to innovation. “Traditional media companies have legacies to defend,” Auletta said in the interview. “They are not free, as Google is, to invent because they fear the new will weaken the old. And they lack both the engineering talent of Google, and an appreciation that in the digital world the engineer is often the creator and must be liberated, pampered like a king.” The industry needs “lean forward” types who are not afraid to experiment, not “lean back” types who are tending to blame the Internet or Google for their problems, he said. Old media are confronted with the prospect of having to embrace a set of new “maybe models” while sacrificing businesses that are declining but still generating revenue. In his keynote he demonstrated the basic conundrum media face. The print reader of The New York Times spends on average 35 minutes a day reading that paper. But a visitor to the NYTimes.com site spends only 34 minutes a month there. That's why advertisers are spending online only a tenth of what they spend in print, he said. The answer must include charging for content, he contends. Otherwise, media will suffer diminished levels of investment and quality. Advertisers already know that low-quality content is not worth their while. That is why they aren’t advertising on user-generated sites, Auletta said. If you have breaking news to share please contact Steve Smith at ssmith@accessintel.com COMMENTS
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Could someone please provide an example where a company gave their products away for free - for years - and later successfully switched to a pay model? And please don't site cable TV as an example. It was never "free." The only companies that are currently successful at charging for content have a long history with this model. Yes just like cable TV vs free broadcast TV.
Brad Forsythe
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The Advertising Show
www.TheAdvertisingShow.com