Mika Salmi is the former president of Global Digital Media at Viacom/MTV Networks (NYSE: VIA). He has been involved in a number of startups and currently serves as Chairman of Sulake (Habbo Hotel), and on the board of Blinkbox, among others.
The global media business is in the midst of a major transformation. Everyone wants to know when this change will end and how media will look tomorrow.
Sorry, but the future is destined to remain unclear. Media, and most importantly the distribution of media, has gone digital. That means change will be ongoing, and media will be subject to the same non-stop innovation present in the broader technology sector. The core content – videos, music, games, print, etc.
Excellent article! It's an important new perspective for examining the question everyone's trying to answer: What new business model will save media?
As you suggest, perhaps it is a combination of monetization strategies that recognize the user is paying for a "relationship" with the service provider (the content providers), rather than paying for use of a single discrete product.
As a follow-up question (for anyone reading) — what should the role of freely syndicated content be in this new MaaS model? Because written content can be syndicated anywhere and be read wherever the reader wants it, the media company loses the "relationship" with their readers needed to upsell other aspects of the "service."
If Google News, Google Reader, and Twitter determine how we engage with WSJ or paidContent.org's content, then WSJ and paidContent lose some ability to cater a "service" they monetize — which seems to be the direction things are going.
Thanks for the comment. Good thoughts.
I wrote this a few weeks ago for a UK magazine (C21/FutureMedia) and coincidentally, a decent example of MaaS came out right after that.
Ashton Kutcher's KatalystHQ second season launched on Facebook via a Slide app and i read that the first week it had 9m views with an average number of friend connections of 68. Impressive numbers. Still, that is a v0.5 MaaS effort as it has fairly standard ads (good product placement though) with no transactional revenue. It wasn't really built from the ground up to take advantage of people's social graph with new monetization methods built in.
Social games have done this and surprised everyone. They first looked at how people are using FB and built the game and biz model on top of that.
To be clear, FB is just one example and one distribution channel in a world of multiple consumer touchpoints. As the commentor points out, the service and consumer relationship are what is important.
Mika-
Enjoyed this piece, good stuff. We are starting to think about how these various forms of consumer engagement can play into video experiences, and I agree that this is probably the most powerful new form of audience interaction and potential distribution that is out there right now, and no one is doing it incredibly well. I also think that the nascent social network micro-payment platforms hold a lot of promise for media companies seeking to develop "duel revenue streams" from online video.
Jeremy
a couple of throw-ins: while i have some reservations about the micropayments model, and see long-term issues with it outside of markets with sophisticated enough payments process systems, i would certainly be prepared to use it in certain cases.
hopefully producers realise there are customers, like me, who dislike advertising so much (60 mins of an episode of 24 is what, 40 mins long?) that they'll pay something for a clean, unencumbered episode/prog/event across whichever medium it happens to be.
In this on-demand world the customer is in charge, and will only pay for (or engage) in what has value. The day of bundling unneeded products and services is and will be dwindling to a close.
We're providing a similar "political campaign as a service" format and value driven delivery in our Gubernatorial contest in Maine.
Honestly, it really is not this complicated and not much has changed. I'm disappointed to see this kind of speculation — it just adds to an already really confused industry and isn't necessary.
What's going on has to do with one and only one thing: We are changing platforms. Never in the history of platforms has there been so much wrongful and off analysis, speculation and misleading — maybe if everybody would stop talking and start learning, you'd find how easily we'd all adapt.
This article is probably the most practical attempt at outlining the likely future macro digital content business model and one we agree with.
And as with SaaS the incumbents have the most to lose initially by its success. Startups will need to kick MaaS off. If they succeed the incumbents will follow.
An early example of MaaS worth researching is http://Innovatrs.com.
Thanks for the good point of view, liked that!
It seems to me that in today’s TV business there are so many incumbent players, which base their business on the status quo that TV as a Service faces quite a few hurdles. Now that CE manufacturers are bringing Internet connectivity to TV sets these firms most often co-operate with TV companies to provide VOD content. It would be refreshing to see some really open web-to-TV solutions come to market that would foster the emergence of new kind of content, or, rather, “Service”.
Thanks, Mike – an excellent article. As Chris Anderson pointed out in "The Long Tail", gone are the days of early bird advantages with strategic and innovative business models. The future is simply this: "why becoming the new what". This in effect translates to a business model that doesn't explain how to transform the ecosystem, but rather understanding why there is a need to do so. Once this is clear, the rest will fall in place.
Interesting article. It's exciting to think of the new media experiences that will be available in the future. I invite you to take a look at some of the television experiences made possible by using the power and flexibility of the cloud at http://www.ActiveVideo.com.