Traditional Media: Competing for eyeballs (and with their customers)

Two stories this week peaked my interest. On the surface they don’t appear to have a lot in common, but I think both reflect the same significant cultural trend.

Story number one: The iPad magazine The Daily, introduced with great hype last year, is rumored to be discontinued late this year. News Corp has been spending millions of dollars creating content for the e-magazine, but the investment has not resulted in an equivalent amount of readers.

More on this later.

Story number two: This week a contract dispute between Viacom and Direct TV resulted in all 26 of Viacom’s channels being pulled.

My youngest son, the day after the channels were removed, started flipping channels to find Spongebob. He couldn’t. “That’s no longer on Direct TV, Mike. They are having a business dispute… it’s like an argument.”

His response was simple. He shrugged, and turned the channel to the Cartoon Network.

Both stories represent how traditional media in the 21st Century just Doesn’t Get It. News Corp thinks that spending millions creating a brand and paying for “top notch” content is the way to get more readers, and Viacom thinks that people are addicted to their content, that we would go absolutely CRAZY if we couldn’t watch Snooki or Teen Wolf… and would pay top dollar to get it.

I think that Viacom is dead wrong, and that people can adjust and refocus their attentions quickly and easily… and that once they do, many of them won’t “come back”. We saw a hint of that with the writers strike that took place a few years back, and I think if a similar action took place today the impact would be even worse for Hollywood.

In the case of News Corp, what they don’t get is that the best content isn’t being mandated and created in the traditional manner of editors and daily deadlines… It’s happening all over the place, all over the Internet, by people… Well, like me.

I have several hundred readers a day at this site, without the use of advertising and with only moderate promotion through social media. I recently started three other web sites that links to stories and news that interest me. Even though they are brand new, they are already getting some pretty good hits, and I am confident that they will continue to gain readers in the future.

Visitors to my site are not watching TV or a movie or playing a video games when they read what I’ve done… And that potential revenue and “mind share” is mine, not legacy media’s… If only for a little while. And there are hundreds of thousands of people just like me, creating content in all different mediums.

There’s only so many hours, so many potential consumers of content… so many eyeballs. The variety of choices and the increasing amount of content and competition is eating traditional media alive.

It’s also about percieved value. A family of four can spend $40 for movie tickets… or pay for a premium movie channel. A large number of people don’t make decisions like this in a clinical cost-benefit analysis way… but in a struggling economy, many are.

Many of the people in Hollywood have figured this out, but I’d venture a guess (based on the recent movies the studios have released) that a majority of the studio execs think that if they make movies bigger, louder, and hype them even more the audiences will succumb and show up.

Ask the makers of Battleship and John Carter how that worked out for them.

Hollywood is at a point where they are competing with their audience… and the audience is winning.