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In any country in which people’s access and choices of news, entertainment, and other information, has switched from relative scarcity to surplus, notably in the post-industrial countries, the changes in the media environment have been swift and incandescent, sparking remarkably successful new companies whose business models are based upon the surplus, searing traditional media industries whose business models are rooted in the scarcity. Like all other products and services, media contents are inescapably governed by the Principle of Supply & Demand. There are no exceptions for news, entertainment, and forms of information. It is foolish to think that the switch in people’s access and choices from scarcity to surplus hasn’t or won’t radically change how media contents are transacted and thus how media business models operate.
I’ve already described how this epochal switch has fundamentally affected how consumers gravitate to and around contents, the keystone to any discussions or theories about how media transactions must be transacted. Without it neither what is observably occurring in the media environment nor any hypotheses about what will bring commercial success in that environment will fit and withstand. As people’s access and supply of news, entertainment, and other information, increases by magnitudes, all aspects of transactions are affected, not just the pricing. The behaviors and balances of power between buyers and sellers change. The timings, the formattings, and the packagings or unpackagings of what is transacted change. The formulations and scalabilities of business models change. And any media executives and media academicians who don’t realize these things need themselves to be replaced or changed. No one should hold illusions that virtually all transactions in the media environment haven’t fundamentally changed, even in transactions in which no money change hands.
However, legions of media executives and media academicians nowadays still either deny that how the media industries operate have fundamentally changed or insist that their own sector or company within those industries can continue to operate largely unaffected and unchanged except for putting its contents online. They erroneously believe that the major change underway in media during the past decades has been that people are simply switching media consumption habits from ‘analog’ to ‘digital’ that consumers are simply becoming ‘wired’ or ‘hooked-up’; and that all that is required for media companies to do is to put traditional media products and packages online or available to mobile telephony, with a production emphasis on ‘digital first’. These executives and academicians see New Media simply as an online distribution mechanism for the contents of printed periodicals and broadcast program and perceive Social Media merely as online promotional devices to drive consumers to that content on websites. Such is the widespread inertial thinking of those trained in the Industrial Era of Mass Media when confronted by Informational Era technologies.
Although it is true that consumers are switching their media consumption habits from ‘analog’ to ‘digital’, those executives and academicians fail to perceive the wider panorama and spectrum of changes underway, changes that became obvious ten years ago and were predictable even earlier. This myopic legion still controls most media companies worldwide. Their Mass Media inertial momentum in a new era in which Individuated Media is quickly becoming the norm has now nearly half a human generation in time, a period in which the media industries and media schools should have adapted; should have changed their production and distribution infrastructures and product definitions; should have phased out old business models rooted in scarcity and implementing new business models rooted in surplus; and should have formulated new theories, doctrines, and practices based upon the new media environment and not that of the past. Instead, by failing to perceive and adapt, their management has led the media industries, at least those in the post-industrial countries, where the changes have been greatest, into long-term decline and, in many cases, into bankruptcy, obsolescence, and extinction.
Their myopic and obtuse undertakings are why I refer to all the transactional aspects in the spectrum of changes underway as the red color category of New Media Chromodynamics. Red has become the color of their ledgers and countenances, as well as the unemployment with which their failing strategies beset their industries. How to generate revenues and profits from media contents in the new media environment are the most sanguine of topics for media executives and their academicians, and my topics in this section. I’ll describe the various red hues of media change, starting with price and value, followed the subjects of charging for online contents and for advertising space or time. I’ll then outline how the epochal change from relative scarcity to surplus affects the packaging of content, rights and permissions for contents, and issues of brands and branding.
Yet at the onset of detailing the red hues of the media environment, I first need to dispel a ‘hue and cry’ which has arisen from journalists at printed periodicals and from their publishers during the past ten years. Many journalists complain that consumers need to place the same high values that they themselves do on the package of daily news stories which they produce. A frequent lament I hear in newsrooms is, ‘Readers must understand the great value of what we produce and so be willing to pay a corresponding price for it!’ Meanwhile, many traditional publishers of periodicals claim that their industries made a grave mistake years ago by not charging from the onset for content placed online. These publishers believe that consumers have simply become ‘habituated’ to not paying for that content, and that the solutions for that are either to ‘educate’ consumers to pay or simply to start charging and thus force them to pay. These publishers believe that not charging for online content was the latent cause of why their online operations, despite nearly 20 years of efforts, generate far lesser revenues than do their declining traditional forms of media such as print.
Neither those journalists’ nor those publishers’ assertions withstand examination, as I’ll detail while describing this color category. However, the timings of their assertions warrant a note. Their complaints began round 2004 when not coincidentally the majority of online consumers in post-industrial countries had gained broadband Internet access. Broadband changed how people utilized online content. Broadband’s ‘always-on’ characteristic no longer required them to dial-up online access and monopolize a telephone circuit. Moreover, broadband’s higher transmission speeds made accessing multimedia content quick and easy-to-use, particularly when combined with access via WiFi wirless networks or 3G (and now or 4G) mobile telephony. A result is that people no longer went online only once or twice or even a couple of times per day, but became online whenever their computerized devices were turned on. It became a major factor not only in causing them to change their media consumption habits from ‘analog’ to ‘digital’ but in the new ways in which they now they gravitate to and around content. Once they gained broadband access, they began much more quickly reducing or even abandoning usage of printed periodicals and, more lately, usage of radio and television sets. (For example, the average net declines in printed newspaper and news magazine circulations in the U.S. had been less than 1 percent annually before broadband but have since accelerated to 4 to 7 percent annually.)
The journalists’ and publishers’ assertions since 2004 are reactions to these accelerating declines in their livelihoods’ audiences and financial viabilities. Nevertheless, their assertions are good points from which to begin describing the most sanguine hues illuminating in the New Media environment: content valuation and pricing. Let’s go there.
The next webpage will be posted on October 30, 2014 (new pages from the manuscript of The Rise of Individuated Media are being posted every two to three days.