Chapter 12, Part 3
The Revolutionary Evolution of the Media is a book in progress. Go here to read it from the beginning.
With the advent of the 21st century, the rapidly changing media landscape shifted into overdrive as every facet of media tried to cope with the disintermediating Internet.
Seemed like very business model was under sustained attack … digital monsters were everywhere. It reminded me of the early navigation maps that filled in some ocean areas with the warning: Here Be Sea Monsters. Like now, they were lurking.
The first business to capitulate was music. Digitalization had already happened as compact discs replaced vinyl records and cassette tapes, making music easy to steal and then share or even sell. (Don’t for get that an early Internet meme was: content should be free. An awful lot of early adapting Internet users simply stole what they wanted.)
Later almost everything was stolen, including many individual identities.
In 1999, three guys (Shawn Fanning, John Fanning and Sean Parker) founded Napster … a file sharing service specializing in MP3 digital files. MP3 made copying music too simple … soon some 80million users were sharing music. They were, more specifically, stealing music. No one was paying copyright or performance or publishing fees. Many of the songs were from bootleg concert recordings, unreleased masters and copied old songs. Metallica heard itself on a computer and sued for copyright infringement. Dr. Dre followed shortly thereafter. The Recording Industry Association of America sued, too, beginning a series of unintended consequences. The publicity over the suit drove more users to Napster. RIAA won and Napster appealed. The 9th Circuit Court ratified the decision and ordered Napster to halt trading of copyrighted material. Napster complied in July of 2001. But the damage was done.
Among the unintended consequences and abetted by Apple’s iTunes, the popularity of the single song recording helped destroy the concept of a record album. There wasn’t any more need for the songs you didn’t want to play.
Another consequence was the ability of free play to drive the selling of more concert tickets. Some bands without record deals were able, for a time, to tour successfully because of bootlegged song play.
The overarching change was the complete disruption of the music business.
Next in line for a digital demolition was the movie business. It was a little harder to crack but the move of television to digital distribution helped a bit. Plus, the movies weren’t film anymore, they were digital. Easy to copy, easy to steal, just like music.
Digitalization also upended the print business. Sales of books from Amazon via its Kindle easily passed – for a time – printed books (some have resurged recently; particularly some 1st editions, coffee table and picture books). Amazon, of course, wasn’t satisfied with completely changing the publishing business (bye-bye Borders), it recently passed Walmart as the most valuable purveyor of goods, period.
The e-book quickly resonated with travelers … no big blockbusters to carry on airplanes. Travelers also quickly added newspaper and magazine digital versions to their Kindles. Easy downloading of any new, desired book with no waiting. No more groaning bookshelves. No more stuffing used magazines and newspapers for flight attendants to throw out.
Newspapers, faced with free blogs on the Web and story aggregating web sites, began what has been a long decline, aggravated by the fact that they were losing their major source of revenue: classified ads. E-bay and Craigslist won the classified advertising battles by allowing searches keyed to key words and opening up the markets nationwide instead of merely local … all the while undercutting the classified pricing system almost mercilessly.
As the value of the content, which of course includes advertising, dropped, subscribers went elsewhere for news … mostly online. Today, companies owning both print and electronic media are busy shedding and spinning off the print assets into independent companies in order to protect the better revenue-generators.
Some papers and magazines are doing better than others … but only because they can provide robust news, information or stories and photos that cannot be provided by others. Some, such as the UK’s Financial Times, have gained substantial subscription revenues, thanks to quality hard to find elsewhere,
Of course, the print guys fought back. For example, the once powerful Time, Inc. founded one of the earlier online so-called portals (a gateway to certain data, news and information mimicking a magazine) called Pathfinder in 1994. It burned up a hundred or so million and didn’t really work; it had a short afterlife as a link to all of Time’s magazines. Some think the failure of the portal approach drove Jerry Levin to call Steve Case.
The cable companies, which had built their systems on packages of video entertainment provided by a growing number of network channels, found themselves offering high-speed broadband access that provided their nascent competitors traveling down to the cable subscribers at no charge beyond what he subscriber was paying. That led to major Internet content provider companies rallying around the concept of Network Neutrality … or, the infrastructure owner cannot treat different customers to different access and service rates. Nothing escaped the rush toward digitalization … even the billboard companies got slammed … many had to upgrade to multimedia ever-changing content … and the world’s biggest billboard turned out to be the multi-block section of Manhattan called Times Square. Ever-changing, ever-moving … people taking pictures of the video “billboard” with a camera aimed at the picture takers … using cameras within their cellphones.
In fact, the billboard has moved onto the smartphone, too. Not to mention the tablet.
As the 21st Century has moved into its second decade, the hardware has changed as much as the content.
Smartphones and tablets (particularly variations of the Kindles and iPads) are fast replacing the desktop and laptop computers as the primary access point to broadband. Wi-fi, or short distance broadband access, is rapidly augmenting Internet access and, in many instances, replacing cellular voice connections.
More changes are on the way with the iWatch, Fitbit and other wearable computers.
Next: Chapter 13, Part 1 – Monetizing the New Media Mix
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