theory of media evolution (ben lerer, sxsw 2016)
TRANSCRIPT
Hi, I’m Ben.
LET’S START AT THE BEGINNINGIn 59 B.C. The Roman Empire
Published “Acta Diurna”...
Then some other stuff happened…...THEN SOME OTHER
STUFF HAPPENED
1950 19600
10
20
30
40
50
60
70
80
90
100
PERCENTAGE OF AMERICANS THAT OWN A TV
A CHANGE IN TECHNOLOGY
A CHANGE IN TECHNOLOGY: THE NEW PIPE OWNERS
CABLE PENETRATION
1960 1970 19800
10
20
30
40
50
60
1
16
53
Growth of Cable Subscriptions, in Millions
1955 1965 1975 19850
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
2 Hours, 54 Minutes
4 Hours, 20 Minutes
Hours Spent Watching TV, Daily
...LEADS TO A CHANGE IN CONSUMER BEHAVIOR
Estimated using data from TV Basics
...LEADS TO MASSIVE OPPORTUNITY
NOV ‘72 DEC ‘77 SEPT ‘79 JAN ‘80 JUN ‘80
AUG ‘80MAR ‘83 MAY ‘82 AUG ‘81 DEC ‘80
JUN ‘85APR ‘83 FEB ‘84 FEB ‘84 JAN ‘85
JUL ‘86NOV ‘93 APR ‘91 OCT ‘88 FEB ‘87
Started by a former sports anchor frustrated with the amount of time he was given to report the sports news; with a $9,000 credit card advance and $30,000 from friends and family.
ESPN
Started by the founder of The Cable Educational Network, Inc with $5 million in start-up capital led by investment firm Allen & Company
THE DISCOVERY CHANNEL
Started by a lobbyist for the cable industry looking to create the first network aimed at African Americans with a loan of $15,000 and a $500,000 investment.
BET NETWORK
SUCCESS IS NOT A RANDOM ACT.It arises out of a predictable and powerful set
of circumstances and opportunities.““
- MALCOLM GLADWELL, Outliers
A CHANGE IN TECHNOLOGY
A CHANGE IN CONSUMER BEHAVIOR
A MASSIVE OPPORTUNITYLEADS TO
LEADS TO
SO...THAT WAS BACK THEN
HISTORY REPEATS ITSELF
A CHANGE IN TECHNOLOGY
A CHANGE IN TECHNOLOGY: THE NEW PIPE OWNERS
2000 2010 20200
50
100
150
200
250
Smartphone Users, in Millions
SMARTPHONE PENETRATION
SMARTPHONE PENETRATION VS 1980’S CABLE PENETRATION
0
50
100
150
200
250
1960 1970 1980 2000 2010 2020
Cable Subscriptions (1960-80)V
Smartphone Penetration (2000-Present)
HOURS SPENT ON PHONES & WATCHING TV
1965 1975 1985 1995 2005 20150
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
3 Hours, 20 Min
4 Hours, 20 Min
2 Hours, 50 Minutes
Hours Spent Daily Watching TV(1965-85)Hours Spent Daily on Smartphones (1995-Present)
Estimated using data from TV Basics
...CHANGES IN CONSUMER BEHAVIOR
1Q06 1Q07 1Q08 1Q09 1Q10 1Q11 1Q12 1Q14 1Q15 1Q1676
77
78
79
80
81
82
83
84
85
US Pay TV Penetration Rates
Source: US Census, Company reports, Citi Research
A CHANGE IN TECHNOLOGY
A CHANGE IN CONSUMER BEHAVIOR
A MASSIVE OPPORTUNITY
LEADS TO
LEADS TO
...BUT WHY WILL THE NEW GUYS WIN?
“ “- MAXWELL WESSEL, Harvard Business Review
At the end of the day, corporations exist to make money…They hear about the advantages of ‘disruptive innovation’…and decide that their organization should do ‘some of that’. But their
organizations are designed to do something else very well. Namely, what they’re already doing
LAYOFFS AFFECT MTV, OTHER NETWORKS, AS VIACOM RESTRUCTURING CONTINUES
VARIETY March 10, 2015
Viacom expected to cut around $250 million in costs as a result of the restructuring.
ESPN CUTS 300 JOBS AS SUBSCRIBER FEE GROWTH SLOWS
LA TIMES October 21, 2015
ESPN has been under pressure to control costs as it no longer can depend on steady growth from its most reliable revenue
stream: fees from cable and satellite subscribers
HBO TO CUT 7% OF ITS WORKFORCE BEGINNING THIS WEEK
DEADLINE HOLLYWOOD October 28, 2014
Time Warner’s directive to its divisions to cut head count, part of the media giant’s effort to improve profitability, hits the
premium network operation this week
“Consumer attention doesn’t scale with either volume or
ready availability of content…”
TAL SHACHAR Redef
I HAVE A VERY PARTICULAR SET OF SKILLS
“The joke is that Chorus is a unicorn with a kitten on its back.
People think it is a magical system that fixes
everything.”
TECH CENTRIC
MELISSA BELL Co-Founder, Vox.com
16M Views
“The secret to Buzzfeed’s success is a culture that embraces constant change yet remains devoted to data-driven metrics.”
DATA CENTRIC
FAST COMPANY February 16, 2016
“NowThis has put its emphasis on creating content specifically for social media
platforms – and shortening its news videos to live and thrive on those platforms”
SOCIAL DNA
POLITICO February 6, 2015
“[Bustle] is designed to be mobile-first. Nearly 85% of
Bustle’s readership comes from mobile devices. For millennials,
this is the new normal”
MOBILE FIRST
BRYAN GOLDBERG Founder, Bustle
“The skills required to do what a great real time digital journalist does are different…using the full
capabilities of the digital medium, including covering unfolding
stories in real-time, using text, pictures, video, and commentary.”
REAL TIME NEWSROOM
HENRY BLODGET Founder, Business Insider
TRULY NATIVE REVENUE GENERATION
ABILITY TO SOURCE DIGITAL INFLUENCERS
NETWORK TELEVISION PRODUCTION
COST PER MINUTE
$50,000 - $100,000
NEW MEDIA PRODUCTION
COST PER MINUTE$500 - $1000
Data from MARK SUSTER, Upfront Ventures
CONTENT COSTS IN LINE WITH ABILITY TO MONETIZE
~Half of Millennials Don’t OwnA TV
~Half of Millennials check their phones a few times per hour
44% 51%
RESONATES WITH MILLENNIALS
MODERN TOOLS & TACTICS
MODERN COST STRUCTURES
MODERN MEDIA COMPANIES
PLUS
LEADS TO
...SO WHAT HAPPENED TO THOSECABLE NETWORKS?
SOME ROLLED UP SMALLER PLAYERS
“ABC to Acquire ESPN as Texaco Sells It’s 72%”LOS ANGELES TIMES August, 27, 1985
“CBS Corp. Will Acquire TNN and CMT for Stock Valued at 1.55B”ADVERTISING AGE February 11, 1997
“NBC to Buy Bravo Channel in $1.25B Deal”THE NEW YORK TIMES November 4, 2002
“Weather Channel is Sold to NBC and Equity Firms”THE NEW YORK TIMES July 7, 2008
...MANY GOT ACQUIRED BY THE MEDIA BUSINESSES WHO CAME BEFORE THEM
“Turner to Merge into Time Warner; A $7.5B Deal”THE NEW YORK TIMES September 23, 1995
Viacom Set to Acquire CBS in Biggest Media Merger EverTHE NEW YORK TIMES September 8, 1999
“Comcast to Buy NBC Universal”MASHABLE December 1, 2009
...AND SOME SOLD TO THE PIPE OWNERS
HISTORY IS REPEATING ITSELF, AGAIN...
SOME ARE ROLLING UP SMALLER PLAYERS
“Turner Buys Bleacher Report, Next-Gen Sports Site”FORBES August 6, 2012
“NBCUniversal Buys Big Chunks of Vox Media and Buzzfeed”RECODE August 12, 2015
“Disney Doubles Ownership Stake in Vice to 10%”VARIETY August 12, 2015
“Univision to purchase satirical website, The Onion”VARIETY August 12, 2015
...MANY ARE GETTING ACQUIRED BY THE TRADITIONAL PLAYERS...
...AND I PREDICT THAT SOME WILL START TO GET OWNED BY THE NEW PIPE
OWNERS
PLATFORM CONTENT STRATEGIES ARE TAKING SHAPE
FACEBOOK INSTANTARTICLES
SNAPCHATDISCOVER
TWITTERMOMENTS
GOOGLE AMPPROJECT
And before a bunch oftraditional media people
freak out…
Bye guys. Love ya.
Questions, comments,blah blah blah?