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The dinosaurs have gone. What the absence of revenue means for media companies.

I didn’t sleep well last night.  I had a nightmare.  I think it was about the future of media and media organisations in the digital world.  It was sparked by something I said at a recent conference.  I have been turning up on Internet related conference panels since the mid nineties, and what is odd is that, although some of the vocabulary has changed, the theme is always the same.  How do we, media companies, make money from the online opportunity.  More than fifteen years since I was first asked that question, I am still being asked it today.  It was as this thought was being processed in my brain that I had my nightmare.

I am the leader of primitive tribe.  Every day we go hunting for dinosaurs (I know this makes no sense, but it was a dream!).  We follow their spoor and when we find a dinosaur, we throw spears at it and then bring the carcass back to camp to feed ourselves and our families.  One morning we go hunting and find no spoor.  We look all over the forest for signs of the dinosaurs, but we can find none. We return to camp, puzzled and bewildered. After some discussion we make a new plan.  Instead of spears we take bows and arrows on our hunt.  The next morning we return from the forest empty handed still having found no sign of the dinosaurs.  A more radical reinvention of our approach is required.  Instead of all going out together, we travel and hunt in small groups.  We add more equipment to our armoury: knifes, catapults, lit torches, batons. We teach ourselves all the new skills we need to use these new tools.   Still no success and no sign of the dinsosaurs.  Before long members of the tribe fall ill with hunger.  Some die.  We sacrifice some others in the hope this cleansing of our population will somehow help us in our hunting.

A few moments before I awake trembling I have a moment of realisation.  We are wasting our time.  We can’t find the dinosaurs, because they no longer exist in our territory.  They have moved on to another country, a place we don’t know or understand.  A place that is not on any of our maps.  For tribes like us, there is no point in hunting for dinosaurs. They have gone to another place and they are not coming back.

In the light of the day, I thought about what the tribe should do.  Keep on going out every morning with increasingly desperate strategies or should we break up our camp, move on, learn how to feed ourselves in new ways?  Or is it possible that for tribes like ours, the only future is slow starvation.

The traditional media industry has been chasing the digital dollar for more than a decade.  In STM there have been some notable successes, but in mainstream content publishing there has been rather less.  Is it possible, that despite continuous strategic reinventions, there will never be any money for traditional content plays online?  Unless you change almost everything about what you do it is likely you will face the same fate as my tribe in the dinosaur jungle.

Here are five things the media tribe can do to stand a chance to feed itself.

1) Make a planning assumption that even if you succeed in online monetisation the revenues will be smaller than there were on the offline world.  Set your cost base planning accordingly.  Do it now –  in one big step. Sacrificing one member of the tribe at a time will destroy your morale and sap your management energy.

2) Put users at the centre of your planning, not your media brand.  Your brand may be an aid to what you do, but it is not the reason that readers find you useful.

3) The old weapons you used to generate revenue are impotent.  Throw them away. The old revenue models, like my dinosaurs are no longer available to you.

4) There has never been more media than there is today, all competing for finite users and money.  Make sure you can describe succinctly, preferably in one sentence, what it is that makes your offering truly distinctive.  Unless your name is Google, if your sentence talks about your brand, cross it out and do it again.

5) If deep down in your heart you think there is much truth in my nightmare and that is an analogy for a horrible truth – that for traditonal media companies, the money has gone for ever – change careers now – before it is too late.

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November 15, 2010 Posted by | business media strategy | 2 Comments