Oops! We Forgot to Atomize Our Business Model!

A couple of news articles caught my eye last week. Mediapost reported on a TV exec seminar hosted by Havas’ Media Contacts unit. Talking about the online video revolution, Mediapost says major TV providers are moving aggressively online–and not only to their own online destinations, but in an array of “distributed” online content options to deliver their programming directly to consumers regardless of where they are on the Web.”

In addition, TorrentFreak discussed data from Mininova (one of the largest torrent listing sites) showing that “ 50% of all people using BitTorrent at any given point in time do so to download TV-series, quite an impressive number. In total, over a billion TV-shows are downloaded every year, and this number continues to rise.”

Our friend the Atom

Flickr photo by Marshall Astor

What it means: recently, all savvy media industry strategists have been talking about content atomization and clearly, in the TV industry, TV channels are being atomized by new Web technology. Whereby, in a traditional cableco world, channels used to be the basic content building blocks (think about how your cable TV subscription is structured), TV shows have become the new atomic element.

But there’s a problem.

The content is being atomized but the main TV business model (30-second ads) was built to be part of a larger element, the TV channel. Ads used to fill, i) the “empty spaces” between shows and ii) planned 3-minute interruptions during the show. In the first scenario, those empty spaces don’t really exist anymore as shows become the basic element and BitTorrent is disrupting the second scenario by offering easily accessible ad-less versions of your favorite programs.

Guess what. Someone forgot to atomize the TV business model while they were busy atomizing the content.

So, how do you atomize TV’s business model? Is it all about product placement, sponsorships, pre-roll ads? Do you move to a user-paid subscription model for individual shows? And BTW, is the future cableco the equivalent of a RSS reader for online videos?

And what does it mean for other media, newspapers for example?

In the case of newspapers, from a content point of view, news articles are the new atoms. This is the way news information travels online. But, in that situation, newspapers’ business model has been blown to bits (no pun intended). Let me explain. Like TV channels, newspapers are inserting ads in the empty spaces around news articles. These spaces don’t really exists anymore, so how do you monetize? News article sponsorships? A-la-carte article user-paid
subscriptions? This one is not easy as journalism ethics (rightfully so!) have kept news article and ads completely separated. How do you bring ads closer to the article without breaking readers’ trust?

What about radio?

For the traditional FM radio industry, individual songs are clearly the basic atom of content. But those are so easy to find online through legal (music streaming services, iTunes) or illegal means (BitTorrent again). As for their business model, radio stations insert ads around songs. Again, these slots don’t exist in an atomized world. Maybe radio stations should invest in original content or better DJs (Wired calls them robo-DJs in “Why things suck”)? Can radio stations move online as trusted brands and become real music aggregators/recommendation engines? It might be too late. So, is FM radio as we know it screwed? Maybe more than people think. That one again is not easy to solve.

And finally, directory publishers?

As for directory publishers, their business model is currently in the ranking of directory listings. But those individual listings might be the new content atoms. And if they are, it means that the ranking structure does not exist anymore. Is it now the merchants’ phone number and a pay-per-call model? Is it pay-per-click to individual merchants? Given that directory content is all about advertising, atomizing content does not impair a directory publisher from atomizing their business model but it just needs to be properly executed. I believe pay-per-call and pay-per-click to individual merchants might definitely be the way to go.

Conclusion

If you’re atomizing your content, don’t forget to atomize your business model! This blog post raises important questions about future traditional media business models. I don’t have all the answers at this point but I meant this post as a wake-up call to stimulate deeper strategic thinking in all traditional media firms.

6 thoughts on “Oops! We Forgot to Atomize Our Business Model!

  1. Having been in the streaming industry for quite a while and now moving onto e-publishing, I face this exact problem with my clients everyday. I really understand the concept of atomizing the business model for content providers, the real challenge right now is to get ad agencies to produce Internet-friendly ads that can complement the traditional media (radio,tv,paper) ads for their online counterpart. One of the key elements is to simplify the call-to-action these ads should communicate. As for radio, I believe that the business model still needs to have scheduled ad slots since the listener is not really watching the online player while listening; one solution called “ad-overlay” enables radio stations to replace on-air radio ads by targeted online audio ads. These ads can be served by ad-serving platforms with listener-targeting factors. For TV, I think that we are still a long way from the “TV on the Internet” buzz that we’ve been hearing about for the past 10 years. And now my challenge is with paper publications that are translated onto the web… I think that the key is to keep the same reading experience as the paper version thus limiting the impact on the publishers workflow (we simply use the PDF version that is sent to the printer) and enriching the online edition by embedding rich-media, hotspots, forms and most importantly, having this content indexed by Google and co.

    As an example, here is Mlle Figaro : http://figaro.v1.myvirtualpaper.com/mlle/2007120501/en/

    or Teen Glow (Rogers Publication) : http://rogerspublication.v1.myvirtualpaper.com/

    Pascal Cardinal
    Vice-President marketing and strategy
    Virtual Paper

  2. Having been in the streaming industry for quite a while and now moving onto e-publishing, I face this exact problem with my clients everyday. I really understand the concept of atomizing the business model for content providers, the real challenge right now is to get ad agencies to produce Internet-friendly ads that can complement the traditional media (radio,tv,paper) ads for their online counterpart. One of the key elements is to simplify the call-to-action these ads should communicate. As for radio, I believe that the business model still needs to have scheduled ad slots since the listener is not really watching the online player while listening; one solution called “ad-overlay” enables radio stations to replace on-air radio ads by targeted online audio ads. These ads can be served by ad-serving platforms with listener-targeting factors. For TV, I think that we are still a long way from the “TV on the Internet” buzz that we’ve been hearing about for the past 10 years. And now my challenge is with paper publications that are translated onto the web… I think that the key is to keep the same reading experience as the paper version thus limiting the impact on the publishers workflow (we simply use the PDF version that is sent to the printer) and enriching the online edition by embedding rich-media, hotspots, forms and most importantly, having this content indexed by Google and co.

    As an example, here is Mlle Figaro : http://figaro.v1.myvirtualpaper.com/mlle/2007120501/en/

    or Teen Glow (Rogers Publication) : http://rogerspublication.v1.myvirtualpaper.com/

    Pascal Cardinal
    Vice-President marketing and strategy
    Virtual Paper

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