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Tuesday, March 22, 2005
From Mass Media to Micromedia - Market Dynamics
The transition from mass media to micromedia (nanomedia, picomedia, whatever) is going to follow 3 key dynamics. First, from the bottom up, verticalization, which has been much discussed lately. Downloadpunk is a nice example of verticalization (with some fun music for you to check out).
Second from the top down, horizontalization. Ugly word, big potential - imagine cross-media search, or a Downloadpunk where you can find not just music, but video, books, clothes, Manic Panic, and dog collars.
Let's discuss horizontalization for a second, because it's often overlooked in favor of sexier verticalization. The first glimmerings of this are in the ongoing horizontal disintegration of the big media conglomerates.
I think the important thing to note with the big guns is not the separation of content from distribution - that's a strategy that hasn't really worked for almost 2 generations - but rather, the separation of different kinds of content from each other (movie studios, record labels, theme parks). This is a strategy that has yielded fat profits for about 15-20 years, but won't work for big media anymore.
I think the main reason - and this holds for both vertical and horizontal disintegration of big media plays - is that as search and distribution costs have fallen, the old economies of scale (manufacturing, marketing) and scope (distribution, retailing) which created such enduring competitive advantages have vaporized. So horizontally integrated media plays must be much more narrowly and sharply targeted to reap synergy benefits in a micromedia environment - think of my Download punk example above.
OK, back to micromedia dynamics. The third one is peer production, which I think I've discussed extensively. Suffice it to say that PP will create a supply side explosion of content which is massively heterogeneous. Combine these three, and you begin to understand just how fragmented (and fertile) the Media 2.0 landscape will be.
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