Channel Me and the Rules of New Media

Note: This is the long form version of the by-lined article that I just wrote for iMedia.

History will show that Google’s $1.65B acquisition of YouTube was the inflection point when the old content-driven media model (CBS, NBC and Fox) irrevocably evolved to a new medium (MySpace, GoogleTube and Facebook) of deep profiles, social nets and video clips. No longer was it enough to say that “content was king” because now the rules of “new media” were in effect, and “conversations were the kingdom.”

New media is exemplified by the almost random, helter-skelter manner that conversations about a song, a news story or a video clip can spark up and then spread virally across many groups of "friends" who share similar interests.

It is designed for a generation of multi-taskers that excels at consuming information in "sound bites." It is about the conversation, the narratives that can shape and direct conversations and the electricity that we feel when connecting with the human sources of content.

Unlike "old media," where content was the star, in new media, it is about the users and giving them control of what they digest, how they digest it and with whom. This article attempts to provide a framework for thinking about the rules of new media and how to work them to your benefit.

Conversations with My Brand

Once upon a time, content was content, an ad was an ad and the audience was a passive consumer. No more. Increasingly, the lines between consumer and producer are getting blurry.

For example, would it shock you to know that a video clip from a TV show that has been uploaded by the show’s producer (i.e., an “official” clip) gets watched one-third as frequently by visitors to an online video site like vSocial (disclosure: I am vSocial’s CEO and Co-Founder) as that same clip when uploaded “unofficially” by an inspired fan of the show, who generally speaking, has uploaded a poorer quality clip than the producers would upload!

What’s the explanation? The unofficial “producer” of the clip has taken ownership in getting the clip online, and wants to be recognized for their act. So they tag it, embed it in their blog or MySpace page, share it via email, tell their friends and “like minded” quasi-friends about the clip, and it spreads. Recipients of the clip, in turn, work their formal and informal social networks, thereby extending the reach far beyond what would otherwise be achievable in a web site destination-oriented content access model.

Netting it out, this is a powerful model for getting the word out and for capturing the currency of attention. How powerful? On vSocial, the most popular clip on our network (a clip from Fox’s Family Guy) has been viewed over 47 million times!

This is a “stop the film and discuss” moment on multiple levels. One is the head scratcher that broadcasters spend hundreds of millions of dollars to advertise their shows yet nobody watches commercials. In this case, however, not only was the clip not an ad, it wasn’t even formally sanctioned by Fox, and Fox did not spend a dime to get the clip distributed. The most common landing spot of the clip? Fox’s MySpace.

Try to reconcile that reality with NBC’s past assertions that such clips steal from the broadcaster. The clip that most comes to mind in NBC’s case was the “Lazy Sunday” digital short on NBC’s SNL, which paradoxically was the first and last time SNL has had buzz in ten years.

The moral of the story is that Fox gets new media and is embracing it whereas NBC is pissing off the very audience it seeks to get to watch its programs.

Moreover, an important takeaway is that this is not Napster redux. I have read many a posting that suggested that the online video wave is simply doing for digital video what Napster did for digital music; namely, providing a network where consumers could steal video content rather than pay for it. My biases notwithstanding, this never rung true for one simple reason. In music, the unit of value is a song, and many an album has only one or two songs that consumers aspire to own.

Conversely, online video is all about short clips. Generally speaking, people don’t want to sit in front of a computer (or an iPod) and watch a 30 minute show. That said, millions want to watch a two minute clip and the odds are highly favorable, if they like the clip, they will watch the show.

But this raises an interesting question for content builders. If the “right answer” is not to simply to keep content behind lock and key, but instead to embrace frictionless distribution and to allow derivative creations like clips and mashups to manifest, when should the content owner lead, when should they follow and when should they get out of the way?

Let me give you a specific example. CBS has realized real viewership gains on its shows by posting clips on YouTube, and why not? It is hard to argue with the audience and reach of YouTube?

But should CBS just give up that real estate to what is now Google? Logic suggests no they should not. First off, why should CBS limit itself to YouTube? Getting the content out there, as far and wide as possible, is goodness.

The incremental cost of letting such content run wild is de minimis and the downside is certainly no greater than a YouTube specific path since once content is open to the “embed and spread” capabilities of Adobe’s Flash, there is no longer control where the content runs and what it runs alongside of.

Second is that this approach can be designed to be bi-directional. By this, I mean that when a viewer watches the clip, the player itself can reflect the branding of the content owner (CBS in this case) and have links embedded in it that take the consumer back to specific content on their web site. Think of it as bread crumbs that take the consumer back to your home base.

To be clear, this approach works for the local band with their music video no differently than it does for the national broadcaster. Imagine a link in the player that takes the viewer back to the band’s web site, another link that takes them to a tour schedule, another that allows them to be added to a mailing listing and still another that allows the viewer to buy their CD.

Now overlay that with the fact that a motivated Detroit band named Broadzilla worked this model to the tune of 850K plays of their music video, despite no major distribution deal and no big advertising budget.

Big brands and little brands co-existing under the same tent under the same rules of governance. This is the credo that makes eBay and Google work; namely, that a Fortune 2000 can plug into Google AdWords and derive the same value that a niche salad dressing vendor does or that HP can auction off its excessive inventory of last year’s printers using the same platform than an individual can sell their old TiVo box to the highest bidder.

Yet, what is interesting is that while everyone is under the same tent, they need not run into one another unless they have shared interests.

Specifically, if I am into anime (Japanese animation), I can find anime content in a few clicks and connect with like minds since they are algorithmically attached to the content (by virtue of viewing, tagging, commenting, rating/reviewing and/or adding such content to their favorites).

By contrast, people who hate anime never view this content and never participate in anime specific conversations. Similarly, Daily Show and news aficionados can participate in their micro-universe of conversations, unencumbered by the anime crowd.

Extend this out to golf lovers, etc. and one can envision a virtual tent that is big enough to accommodate all ages, all demographics and all interests – a highest common denominator universe versus the LCD nature of traditional old media models.

Channel Me: A New Value Chain Emerges

Let me suggest that the value chain that is emerging will look something like this. First off, it will be user-centric. By that, I mean users will have the tools that they need for easy capturing, organizing, customizing and sharing of content of interest.

These tools will have built in recognition systems (like deep profiles) to systematically connect like minds together, and filters that provide transparency that highlights what’s new, popular, recently viewed, talked about or related content.

More often than not, such content will be ad supported, but the interesting question that comes to the fore is who pays whom? In some cases it will be a third party advertiser looking to affiliate with contextually targeted content. In others, however, the content owner may actually reward the most virally connected users for spreading the word.

The economics are definitely in the formative stage but my company already sees these types of word of mouth campaigns on a weekly basis – often “sweetened” by a contest – so this is a trend to watch.

This new value chain can be thought of as “Channel Me” given its combination of programmed content, personalization and integration within a social network. Given their low inherent (re) production and distribution costs, channels will emerge for every topic of interest.

On one hand, it is easy to relegate such a model to being akin to public access on cable networks but the reality is that the networks and communities that will emerge around this platform could someday give Comcast a run for its money.

My only guidance to content owners is not to treat such media as a revenue producing product in its own right. Rather, treat it as a (hopefully) never-ending conversation with your audience.

Similarly, advertising will evolve. Ads that function more like content, that provide information, and that actively support conversations will be the rule. Ad units will emerge that are specifically designed to blur the lines between advertisement and content.

Looking Backwards, Looking Forward

The success of MySpace, Facebook and YouTube is not that they offered an orderly sandbox for big media to broadcast content to their audiences, but rather that they created an environment where short, informal conversations could come together easily and instantaneously, all the while putting the user in control of how much transparency they wanted to share of their identity and their interests.

Yet, while it is fashionable to suggest that new media will swallow up old media, in reality new media is destined to disrupt – not replace – old media. The disruption, which is seen in the struggles of the music and newspaper industries, is inevitable any time power dynamics change as profoundly as they are changing right now.

This suggests that old media needs to jump on this bandwagon and not treat it as such a zero sum disrupter since this is where their audiences are hanging around the virtual water cooler.

Lay the right breadcrumbs for the right audiences and if your value proposition is compelling, customers will find their way back to the full product or service. Even better, encourage, enable and reward your audience for talking about you. Buzz is good, and you can get back on offense versus perpetually trying to defend a turf where the old rules no longer apply.

Along these lines, Yahoo has received well-deserved favorable press for their Brand Universe initiative which attempts for the first time to integrate multiple Yahoo services – Yahoo Groups, IM, Flickr – around a single topic of interest, like Nintendo’s new Wii gaming system.

And companies like my own are developing platforms that enable both niche content builders and major media organizations to systematically brand their content and deploy it into video channels as well as launch video networks that are consistent with this model.

The evolution of the Web from text, pictures and links to video-powered social nets is as profound as the evolution of broadcast media from radio to television, and it is destined to be no less exciting.