Havas Media Lab

Media markets are falling like dominoes - here’s the latest prediction: film and TV are on the verge of being cannibalized by digital media.

Why? What’s the deeper cause?

It’s not just a defection to digital media, which seems to have less attractive margins. Rather, the cause is the media indsutry’s acceptance of those simple economics: the ongoing refusal to engage with serious, meaningful business model and strategic innovation.Digital media isn’t inherently less profitable (hi, Google). It’s only less profitable if we apply yesterday’s business models - built for a vastly different set of resources and capabilities - to it. If we want to rediscover profitability, growth, and advantage, we cannot go on applying obsolete business models to next-generation assets.

There are many paths to business model reinvention. Here’s perhaps the most critical for media.

We’ve been discussing, over the last few weeks, the need to revitalize brands: to shift from talking to listening. Why is that important?

Because nearly every media market’s highest-value revenue stream is branded ads, and even those that don’t obey that logic depend critically, if indirectly, on brands.

The logic is simple. Connected consumers are rational. They will continue to defect to digital media: the value proposition is explosive, and their attention is allocated far more efficiently than being forcefed inert, linear media.

But unless media owners, advertisers, and, yes, agencies get together to engage in meaningful business model and strategic innovation, old business models - especially those dominated by brands - will continue to be “cannibalized” by this shift in consumer behaviour, because consumers are too busy talking to each other to pay much attention to industrial-era brands.

We’ve discussed - at length - the inevitable shift for brands from talking to listening. What continues to be surprising is just how reluctant media is to explore these new possibilities - and how media markets continue, one after another, to implode, failing to learn to the lessons of those that came before.