Models challenge Hollywood
Posted by: Scott Maxworthy in MyBlog on Oct 05, 2008
The same disruptive technology factors that have changed the face of the music industry over the last five years now threaten to flatten the once dominant and powerful pillars of the television advertising and film industries.
Old Hollywood and television advertising models based on controlled distribution channels, the misconception that customer attention is cheap and where retail and marketing captured the most value, are now dated.
In the Internet Media 2.0 world, customer attention is scarce, where technology vaporises distribution and retail costs, exploding media and content supply.
We saw a very similar thing happen earlier with newspapers and the music industry in terms of creation and consumption
For musicians the path to fame suddenly changed with the emergence of "disruptive" Internet music download programs and online social networks like Myspace and later Youtube and Facebook.
All of a sudden, music content producers (singers and bands) could record professional quality songs from home studios and then distribute and connect with fans and consumers from all over the world via the Internet - effectively cutting out inefficient intermediaries and opening up other creative opportunities.
The market power shifted back towards artists and consumers and the big record labels had to eventually modify their business models and embrace the web.
The film and music industry business models are similar but television, like newspapers and magazines, is mainly funded by advertising.
Free to air commercial television faces the greatest challenge.
The effectiveness of the traditional ‘interrupt and repeat' model of advertising is decreasing and audiences and advertisers have been moving away from old mass media like television and newspapers towards online advertising for a number of years.
Given the current economic outlook this will only increase as businesses look for more innovative ways of doing things, they are looking online for smarter ways to engage customers with their brands and services.
The real winners out of the industry shakeup will be customers, advertisers and skilled creative talent.
For creative talent - presenters, performers, scriptwriters, and producers then there will be more production opportunities but also intense rivalry for customer attention and increased competition around production values.
For advertisers, although the Internet fragments consumers making advertising management harder, increasing web site ease of use and effectiveness will increase online sales.
