Ignoring The Internet Software Business Will Save The Media/Content Business
The digital content (media) business, and content business in general as it relates to the internet platform, is one of the poorest examples of adaption and adoption to a disruptive technology. But it’s not necessarily the content industry’s fault.
Over twenty years ago when the U.S. government designed the internet infrastructure, it had the content/media business (as well as other industries) in mind. Not to dismantle the industry but to help it — part of the reason why the internet platform infrastructure was invented was because the previous means of delivering information to American citizens wasn’t reliable in a natural disaster or emergency. Television and print media are often inoperable in these instances. Of course, the government wasn’t thinking about benefitting the media industry’s business by creating a more stable distribution platform for its (media) products. But that it did was certainly not to hurt it.
The internet is two parts — infrastructure, and software. It needs the software to enable application and use. Given this, the software industry was among the first to benefit from the proliferation of the commercial (consumer) internet, second only to the telecom industry. Contrary to what the software industry often believes, the internet will not ‘kill’ telecom —it’s the telecom business that benefitted the most from the invention of the internet. The telecom industry understood this and that’ why it put the time and huge investment into building and bringing the commercial internet infrastructure to our world. Case in point: we pay our internet access fee to companies like Time Warner, Verizon and Comcast (carriers) and not to Facebook and Google (software), though Google is working to change this by investing in infrastructure. Facebook’s idea that buying software applications will create position is foolish — in platform business, those that own infrastructure and a lot of it always win.
No less, being among the first industry’s to benefit from the internet put the software business on the platform (internet infrastructure) earlier than the other industries the internet infrastructure was intended to ultimately modernize and subsequently benefit. While it makes software applications on the internet (websites, apps, social networks, etc.) it doesn’t necessarily mean the software business is an authority about the internet, or even a key player in every area of business on the internet. In fact, the industry has never really recognized or understood the internet for what it is, or understood what it can do. If it did, we would be in a far different world than the one we are in.
This isn’t entirely unexpected, or necessarily any wrongdoing. Prior to the internet, the software business created things like Quickbooks, Photoshop and video games used on computers, etc. Outside of possibly providing some software products that supported some aspects of telecom business, it had no legacy telecommunications or platform business work, experience or history.
Just the same, the software industry had no prior experience, work, or history in media/content business either. While it may have provided software products to support some aspects of the industry’s business as well, that’s equally as far from being versed and experienced in the business or industry itself — processes, models, etc. It also has no formal experience or history in communications business, the internet infrastructure’s other main functionality.
The internet is a single infrastructure, and there is software on it, but by design what is and can be done on it, by who and how varies significantly. It would be almost impossible for anyone who doesn’t know the infrastructure — and each of the five legacy platform industries that will ultimately do business on it — to understand how everything will work. You’d then also have to understand the multitude of other non-content/non-communications industries the internet will ultimately augment.
Yet because the industry was among the first to be moved to the internet platform, it has been given/has attempted to take a position of authority on what legacy platform businesses and industries should do to adapt to the internet. This hasn’t really worked, which is visible by the sluggish evolution of the full functionality and use of the internet’s infrastructure, as well as many of the problems with legacy businesses adequately adapting to it.
For media/content business, part of the problem is that the business, models, monetization, size and scale of content/media business in general (digital or traditional) is significantly different than the software business. The software business keeps trying to retrofit everything on the internet into the models and business it’s familiar with (its own). This doesn’t work, hasn’t worked, won’t work and never will.
Among the most detrimental has been the approach to monetization. In media/content business, and platform business in general, the predominant model has rarely been ad-only revenue. In media, it’s been ad/subscription hybrid and has been for many decades across multiple platforms and disruptions/new inventions. That’s because in content/media business, users are paying for either value or access, and neither can be cheaply made. Ad-only models don’t provide enough revenue, or fluxuate too much, to create the product its customers want and need. Many believe it was media business that drove people to pay for content/media, but in reality, it’s because people want access — there are plenty of ‘free’ NFL football games for fans to watch on TV but large numbers are willing to pay exhorbiant fees to have access to every single game.
It doesn’t mean that ad-only models can’t or won’t exist on the internet. But it shouldn’t have ever been declared the sole model for media companies to utilize — especially given that many media companies were successfully monetizing on the internet via ad/subscription hybrid and have been for more than ten years.
Just the same, it’s nonsensical for any product on a device-agnostic platform to marry itself to a single device, content/media or otherwise. The right approach is cross-device, as it truly fits where the user is — adapting to whatever device or access point a user happens to be using at any given time, versus requiring the user to utilize something specific. That’s why the software industry’s push to tablet-only media offerings didn’t work. A distribution platform that finally frees your industry from having a single access point or product is the best invention you’ll see in your business. It’s one of the intentional benefits that had been baked into the design of the internet. There are other issues also — the look/feel and delivery of media/content, audience, and measurement — that stem from the software industry’s approach to media/content on the internet. These things have set the adaption and adoption of users and business online back far more than its moved anything ahead.
Legacy companies in content/media are starting to understand the above, and recognize that they do not necessarily need the software industry to adapt to, do business, draw audiences and make money on the the internet outside of someone to create the software they may need to do it. There are a lot of companies that aren’t doing business with Apple or Google, holding out instead and keeping a position. Others are monetizing the way that they want to (and should), and learning how to marry their legacy customers to their products online, etc.
It’s not to say that the software business isn’t a smart industry, or a good one. But just the same, it wouldn’t benefit from media/content business trying to tell it how to do software business on the internet either.
