Tectonic Shifts in Digital Media

By Eleanor Haas

“Tectonic” – pertaining to changes in the earth’s crust.  “Tectonic shift” was something George Kliavkoff said at least three times in the course of his NYMIEG interview on December 17^th.  Probably not surprising from the Chief Digital Officer at NBC Universal at this moment in media history.  And those three were only a few of many implied. 

The first shift he mentioned was the shift of media and advertising to digital platforms as ROI becomes increasingly important to marketers.  At the moment, he commented, some pockets of advertising will slow but overall, we can expect to see a flight to quality – to premium content, such as NBC’s www.hulu.com. 

But Hulu itself seems to me to be a tectonic shift in business models.  A joint venture between NBC and FOX, the site delivers free streaming video content of hit television shows to online viewers.  Doesn’t this run the risk of cannibalizing the television shows and their revenue streams, he was asked?  No way.  To the contrary, NBC has found this drives incremental TV viewership later.  “Prime time television viewers use mobile devices and online to catch up,” he said. 

The magic sauce in the new world of content is making things convenient and easy for customers.  It’s all about making a great customer experience accessible to customers when and where they want it and giving them choice.  This is a tectonic shift Kliavkoff and others now take for granted, the shift in power from seller to buyer.

Hulu’s ad model gives viewers an amazing choice.  Viewers choose between three to five 15-second interstitials and a pre-roll of a full movie trailer.  About half choose each.  Interesting.

To distribute its great shows widely enough to make them readily accessible, Hulu made yet another radical decision:  be sure its content is where the viewers are.  Give it to Yahoo, MSN and other distribution partners but require that it be on the Hulu player with Hulu advertising, straight off the Hulu server to maintain the integrity of the business model and to protect the site from piracy.

Consistent with these shifts is the coming personalization of local online programming.  A study I conducted 12 years ago found that “everything points to personalization as probably the single most important interactive marketing trend today.”  Forrester Research at the time was alerting us to the expectation that personalization would redefine the web and was something every site must prepare for. 

Kliavkoff predicts a wave of technology soon to come that will enable web sites to personalize content quickly, making every visit more relevant because viewers no longer have to contend with 90 percent to 95 percent of irrelevant pixels.  For this, sites will have to share data and information while being polite about privacy, he explained.  Behavioral targeting and social networking are both part of this.

The iPhone, App store and Adroid represent another tectonic shift with far-reaching implications.  These break through carrier control over mobile content for the first time ever.  As phones become an open platform and marketplace for premium content, they become candidates for significant new mobile e-business models as well.  Lots more coming down the pike on this one; it’s still early days

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