We knew when developing the agenda for OPS that we couldn’t just have operations people say that ops was sexy. We needed an icon in the industry to help drive that point home and end the day with everyone buzzing about all the great things operations is. We were extremely fortunate to be able to get Jack Myers, media economist and chairman of the Media Advisory Group to help us end a fantastic day and really drive the point home.
Jack Myers and Rob Beeler wrapped up the OPS NY event by discussing media, transparency, apps, paywalls and of course, why ops is sexy. This blog is the fourth in a five part series. Watch the video and read the transcript of the presentation.
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Rob: So if we had Admonsters in 1899 or so, we’d be having this whole issue of how do we…
Jack: It would be newspapers…
{Talking at once}
Jack: …it would be, how do you lay out a newspaper by hand?
Rob: We didn’t take pictures back then… I’m going to completely throw another direction at you here. The paywall approach to media, so the idea that we’ve given enough for free, this advertising {?}, the CPMs are going down, {fragments?}, okay great, we’re going to just put up a paywall and we’ll start charging people for it.
Jack: That’s kind of a trick question, because my business is dependent upon paywall.
Rob: Explain that.
Jack: My revenues are almost 100% generated from subscription model. But it’s a corporate subscription, and it’s an expensive subscription. The average price is $10,000 and it ranges to $48,000, depending on the size of the company that’s subscribing. So I obviously believe in a paywall and a firewall, but I don’t think that the low-end paywall—I don’t think the pay-for-play, the New York Times model, The Wall Street Journal model—I really don’t think they’re going to work. I don’t think the model where if you view it ten times and it kicks in and you pay ten cents or fifty cents to get an article. I think the free content is out of the bag.
Rob: So news is commoditized.
Jack: News is commoditized, and more and more entertainment is going to be commoditized with more and more people watching YouTube as opposed to professional videos with demand media and five min that AOL acquired on DIY. I think more and more content is being commoditized. I do think, however, that if Wall Street Journal’s goal was to build a hundred million dollar online subscription business which they announced a couple years ago, that means 650,000+ $50 subscriptions. I don’t think they’ll ever get there. But what I do think they could have done is said, we’re going to sell a hundred million-dollar subscriptions to Wall Street companies in the Bloomberg model and give them real value. So I do think the paywall works when there’s real value, when there’s a price behind it that is sufficient enough to justify the business and where you’re really not dependent on trying to create value where it doesn’t exist.
Rob: So curated, something again, that’s unique and special is something that…
Jack: And I should also add, lest you think I’m a total mercenary with my subscription business, that part what my subscribers also underwrite is something called MediaBizBloggers.com, which is completely free to the industry {?} leaders. And anyone in this room, or your companies are welcome to launch blogs at MediaBizBloggers. We completely underwrite them, we underwrite the platform, the archives…
Rob: We pick up some of your articles every once in a while. We think that they’re ops related…
Jack: We have some great writers, Rob Norman at GroupM, Matt Seiler at Universal McCann, we have a lot of really good industry, Shelly Palmer writes on technology. Some really good stuff. MediaBizBloggers.com, and you can all subscribe also. For free.
Rob: So considering the fragmentation of media, you’ve got, perhaps paywall is a direction to go. It seems to me that we’re really going to have to get innovative to survive this period of time that you’re talking about. Large companies are going to have to change their stripes. They’re going to have to be able to just become nimble and navigate it versus trying to be reactive. Let’s make it the way media was before things opened up, and that’s the part I always see as a big challenge.
Jack: Trying to change the nature of the business is a huge challenge. Twenty-five years ago I wrote a document for CBS, and I went into my boss and said, “look, if we don’t change our business model in the next five years…” and his response was, “well, I’ll be in a different job in three years.” And what’s been interesting is we’ve been looking at, every five years you say it’s five years away, it’s five years away, and the industry moves incredibly slowly. The traditional media industry moves incredibly slowly. This time it really is five years away and we’re beginning to see the first response by the magazine industry.
The newspaper industry, you know, sweep them under the rug. It’s not a dead industry, but it’s an obsolescent industry and will have less and less relevance, because they waited too long. In the media industry has seen changes at Time, Mencken, Hearst, Conde Nast, which are pretty major management upheavals, where cable networks are beginning to get on board. But the real issue is, I do think is your roles {pointing to audience} in the companies, and at the traditional media companies they are so accustomed to having the traffic and operational people have a lesser, not have a seat at the table and not be a part of the conversation about strategy. And that has to change. That absolutely has to change.
Unless you’re at the table if you’re in a large media company, unless the operations people are sitting there literally every single day with the sales management and the financial management and the senior programming and content people, and unless they really understand the operational issues and opportunities of how they extend their brands out across multiple platforms effectively and generate revenues—profitable revenues—doing that, they’re not going to survive. It’s really that simple: they just won’t survive.
And I think we’re seeing a huge bifurcation of the industry between the value of content and the importance of content, which is the historic value equation in media and the commodity audience and eyeballs business. The technology has been building and supporting the audience business and I really think that the future growth is going to come when technology really begins to figure out how to enhance the value of the brand. Much of that value of the brand is off-screen, not on the screen. It’s going into experiential marketing. It’s going into social media. And that’s where I think the opportunities in technology are right now—to figure out how to help brands move into social and mobile.
Rob: I love again the theme of ops sitting at the table—that’s kind of what AdMonsters has been about for quite some time, and…
Part 1 | Part 2 | Part 3 | Part 4 | Part 5
We knew when developing the agenda for OPS that we couldn’t just have operations people say that ops was sexy. We needed an icon in the industry to help drive that point home and end the day with everyone buzzing about all the great things operations is. We were extremely fortunate to be able to get Jack Myers, media economist and chairman of the Media Advisory Group to help us end a fantastic day and really drive the point home.
Jack Myers and Rob Beeler wrapped up the OPS NY event by discussing media, transparency, apps, paywalls and of course, why ops is sexy. This blog is the fourth in a five part series. Watch the video and read the transcript of the presentation.