Call It a Comeback: Media to Thrive in World of New Devices, Technologies
A host of shiny new tablets have joined Apple's iPad. Both Apple and Google have rolled out subscription plans geared for media. Advertising is in recovery. The pendulum appears to be swinging from technology back to content. In short, it's a time of opportunity for media; the question is how to seize it. That's the challenge for Michael Wolf and Anil Dash, co-founders of Activate, a digital consultancy built to help media navigate opportunities ahead.
Mr. Wolf is the former chief operating officer of MTV Networks; Mr. Dash is a blogger and founder of Expert Labs. Their first public gig after founding the company last year was to remake Conde Nast's shuttered Gourmet magazine as an app for the iPad and other tablets. Both will be speaking at Advertising Age's Digital Conference April 6 and 7. We talked to Mr. Wolf about why media will be ascendant -- if it can adapt correctly.
Ad Age: Are we seeing a moment of opportunity for media?
Michael Wolf: Our point of view is that to some extent the world is coming back to media. There is this recognition is that functionality alone is not getting digital businesses the kind of traffic that they need. Along with AOL's purchase of Huffington Post, the IPO of Demand Media, and the rumored acquisition of Next New Networks [by Google], suddenly media companies look around and say "We have content that is longer-lasting and resonates more with people." The world has turned back to the point where users want professional content. Yes they want a lot of other stuff -- but people with the largest platforms are now focusing on content as a driver of their business.
Ad Age: Is the pie of available ad and subscription dollars growing, or will there be winners and losers?
Mr. Wolf: There is this keen sense of opportunity and also this sense they've got this moment to take advantage of it. At the same time, the people we are working with are recognizing that not everybody in the media business is going to benefit from an advertising recovery. At the end of the day they're going to have to steal share from others in order to grow. It's going to be a battle for who gets your time and attention online. It is going to be which content wins. You have to expect there are new companies coming out of nowhere and they are going to have hits. You have News Corp. with The Daily, but there but there is nothing to stop someone else coming out of the woodwork and creating something better and more focused.
Ad Age: Are ad dollars flowing to new and untested platforms?
Mr. Wolf: As spending is back and so are test budgets. The good news is, as a media company, people will try new formats and new advertising units. The bad news is you only get to rent their money they may not come back to you.
Ad Age: For big media, digital growth has hardly offset declines in the legacy business. Has that changed?
Mr. Wolf: Media companies do well when you have competition between platforms. One of the things we are working on with our clients is assuring they get the value for the content they produce fresh every day, but also the value for their catalogs. If you look at the media business there is a tremendous amount of untapped potential in current or library content. Also we need to move to a place where people are paying for something and get out of the loop where everything is supported by advertising. For our clients one of the big issues is how are they going to leverage those content assets to give them an unfair advantage against companies that just throw it on the web.
Ad Age: Do you think TV can survive the transition ahead?
Mr. Wolf: There's a lot of discussion around cord-cutting, but the TV business has a long time to make this transition. They've also seen what happened when people didn't do what they needed to do to manage the transition. Quickly emerging are services where people once again are paying for video. So professionally produced media content is being revalued. A big percentage of internet traffic now are people streaming Netflix. I think we're not going to be in a world of cord-cutters so much as a world of cable-nevers. In that world there is an opportunity for anybody who has a device -- whether its Apple, Boxee or Xbox.
Ad Age: Are we seeing a shift away from the open web to more closed, controlled systems of delivering content?
Mr. Wolf: Media companies do well when you have competition between platforms. We aren't sure what platforms are going to work and what consumers will buy. We've gone from this free and open web where everything is available back to a point where things are closed. We are now back to a place that works very well for media, and that is scarcity. The idea that somehow a media company could be back in the position that they create scarcity and therefore create value it totally turns on its head the way things have been going until now. This is the moment of revaluing content.