It is not especially surprising, but media shift is being accelerated by new devices, expanding media channels, user-generated content and aggregation. IBM Global Business Services tries to make sense of all of it in a new report: “Navigating the Media Divide.”
In its report, IBM finds that everything is converging, as “traditional media” moves toward “walled communities.” At the same time, traditional media will be engaging, with others, in “content hyper-syndication,” in which professionally produced content shall be available in open and portable channels.
But to IBM, the most disruptive model, potentially, is “new platform aggregators,” which is built on user-generated content and open distribution platforms. “Neither incumbent content owners nor distributors have legacy advantages here,” warn the IBM consultants, who include Saul Berman, Steven Abraham, Lousia Shipnuck, Andreas Neus and Bill Battino (whom I worked with when he developed The Electronic Access Project, an earlier version of this report from the mid-’90s).
So who wins, short-term? IBM thinks the biggest growth is going to be experienced by content hyper-syndication, which is expected to grow 33 percent on a CAGR basis between now and 2010, resulting in $25 billion of worldwide revenues. At the same time, new platform aggregation will grow 16 percent to $50 billion.
Both newfangled categories, however, are starting from a small base. The big dollars will still come from traditional media, which IBM predicts will grow 5 percent to $340 billion, and from walled communities, which will grow 10 percent to reach $240 billion. In other words, expect to see companies like Time Warner, Sony and others continue to rule the nest.
IBM, itself, posts a caveat to its research: “We believe these models will blur over time as media companies experiment with multiple models at the same time. The divergence in goals and strategies will put tremendous strain on traditional partnerships.” The report’s top recommendation, accordingly, is to “put consumers at the center of your business and boardroom.
“Firms must be fanatical about consumers investing in a new corporate consumer-centric mantra along with advanced segmentation analytics and personalization tools.” For starters, IBM thinks that firms should appoint a Chief Consumer Officer.
IBM, of course, uses these kinds of reports to market itself to specific players. It sees special opportunity, for instance, with telcos, which have “an opportunity to leapfrog beyond ‘me too’ traditional media distribution and move quickly to the on demand, experiential niche and community features that excited consumers. To compete, they will have to be willing to undertake more dramatic business model innovation than their incumbent media peers and implement it much faster.”
But more generally speaking, “doing nothing is not a viable option,” says IBM. “For content owners, we only need to mention the music or newspaper industries as examples.”