The unbundling continues while others circle the wagons

NBC is the latest to jump on the unbundled media wagon with an announcement that they, too, will be offering programs for iTunes download and viewing on the Video iPods (and other instruments) of the world. NBC Universal is going beyond what ABC is doing, offering programs from “Alfred Hitchcock Presents” and the original “Dragnet” to “Law & Order” and “Late Night with Conan O’Brien.” CBS is expected to follow suit soon. So now we have all three networks and cable TV in the loop for à la carte distribution of their programming.

Unbundled media IS the future, folks, and I hate to say this, but the future is now. What? You say you’re still waiting for somebody to figure out the revenue model before you leap? Sorry, but you’re too late.

These are the people that Diane Mermigas charges with leadership problems in another biting essay from The Hollywood Reporter.

There is something fundamentally wrong with the blanket notion being floated by some so-called experts that the only way to realize more value from media conglomerates is to dismantle them.

Aside from being an overly simplistic, one-size-fits-all view, it smacks of an unproved knee-jerk response to the industry’s complex and challenging digital broadband transition. It fails to address some of the formidable underlying reasons why media stock prices are languishing and full values are not being realized.

Just maybe, it isn’t the mix of media assets, but the way they are being managed.

Just maybe, it is an absence of visionary leadership and enterprising strategies necessary to adapt to the change and make the most of new opportunities.

Diane’s right, but there’s more. Consider the complete idiots in the movie theater business who continue to shoot themselves in the foot over attempts to kill the goose that laid the golden egg.

Here’s the scenario. People aren’t going to the movies as much as they used to. There are a lot of reasons, but one is that people don’t have to sit through 20 minutes of commercial announcements before the show at home. So what are theater owners going to do in the wake of decreased revenue? Yup. Add more commercials.

Ad forecasters at ZenithOptimedia said on Monday that spending on in-theater ads, usually shown before the trailers, rose by 18% this year to $400 million — and likely will go up by about 15% each year through 2008.

Driving growth is digital projection that makes it easy to change ads or target ads to different audiences, says Tim Jones, CEO of ZenithOptimedia’s U.S. operations. “That’s directly attributable to the medium becoming more digital. It gives advertisers more options and affordability from a production standpoint.”

The forecast was good news for theater owners depressed by the 6% slide in box office receipts this year. To attract more ads, they’ve spent about $150 million in the last three years to install relatively simple digital projectors just for ads. That’s ahead of the much larger investment just beginning for full digital conversion to movie-quality projectors.

Mass media is in deep trouble, as I’ve said a million times. It’s clearly caught in the grip of disruptive technologies and innovations from which it cannot escape. Investors are following readers and viewers and (former) moviegoers out the door, and there’s no way to stop them.

Heatonism #1, I tell my clients, is this: Revenue isn’t the problem; audience is the problem. Fix the problem. This, of course, doesn’t always go over well, when managers are trying to manipulate the bottom line for the well being of their companies. It’s a sad scenario, but we must not wallow in it, because the reality is there are incredible opportunities available in an unbundled media world. That’s where we need to invest our time and resources.


  1. The thinking at SMLXL is that government, businesses and their brands in the 21st Century have to give up control to gain control. They have to become facilitators, enablers, life-simplifiers, co-creators, they have to inspire greater peer-to-peer interaction and in that way they will get the most precious thing from their customers — personal advocacy.

    Easy to say even harder to do but, necessary for survival.

    Within 10 years communities will have replaced the orthodoxies of government, management, business and marketing as the primary medium by which these organisations will successfully engage with their audiences.

    Further, enabling or capturing peer-to-peer information flows will transform these organisations, simply for the better.

    And, that those organisations that ignore the newly empowered and connected customer/voter/stakeholder will simply struggle to survive.

    This is the unsung, un-remarked media revolution. That the great explosion is in peer-to-peer communication — something many organisations up until now has overlooked.

  2. I agree with you, Terry, and with Alan above. But dang, it’s going to be a sad day for these old mass media types. We’ll see all kinds of walled gardens popping up from here on out.

    But I think at the core is the need to insure that the net stays neutral throughout all of this. Look for cable companies and telcos to join hands with big “mass” media types to keep throwing obstacles in the way of the inevitable. Maybe we need to think of ways to insure neutrality so media innovation doesn’t slow down. My two cents.

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