Waiting for the tornado: How media’s business model will break down

by John Einar Sandvand on November 18, 2010 · 5 comments

From Copy Economy to Access Economy: The media industry must prepare itself for a future in the cloud, claims a digital future expert.

Media futurist Gerd Leonhard was the keynote speaker of the Future Media Days conference in Oslo, Norway this week. Leonhard is a media strategist and popular keynote speaker on the future of media. He lives in Switzerland and also writes the Mediafuturist blog.

The Future Media Days conference was held for the first time by the New Media Network in Norway. After his speech (you can download his slides here) I made a short video interviw with Leonhard that you can watch above.

- A tornado is coming for the media industry,  warns Leonhard. He points out how some big mega trends will affect the very essence of how the media companies have been used to running their business.

One of the most important trends is the transformation from a Copy Economy to Access Economy.

Traditionally media business models have been based on selling copies of content: A printed newspaper, a book, a DVD, a music record, even a digital copy of a song.

That model is about to disappear, claims Leonhard. He compares Internet to a giant copy machine. Selling “copies” is a model of the past. Instead the entire world shifts to a world of access.

“If you are in the media industry you better get used to this. It is a whole new industry.”

Gerd Leonhard

We must review our assumptions, says Gerd Leonhard.  Like what is a copy in this new world? How do you define “a copy” when you have unlimited music streamed to you like in Spotify? If we cannot even define a copy, how can we speak of copyright?

Gerd Leonhard’s answer: Access (to the cloud) is the new copy!

We used to live in what can be described as the Broadcast Culture.  It was a disconnected society, based on everybody watching or reading the same content. For the media it was a one way stream of publishing.

Now it has been transformed to the Broadband Culture, which is based on millions of links between people.

“What matters on the Internet is not the noise, it is the trusted connections that you have generated”

The future of the media is not a fight for distribution, it is a fight for attention, says Leonhard.

In the past the media made money through control and scarcity.

“The future of the media is not a fight for distribution, it is a fight for attention.”

What then about media companies’ attempt at putting up paywalls in such an economy, like what The Times is doing.

- The paywall is an attention wall, unless it is so cleverly done that you don’t really notice that you pay, says Leonhard.

“Forcing people to pay cannot possibly be our future!”

Leonhard wasn’t necessarily agains asking users to pay, but underlined how i all depends on how it is done.

- It is very important to make models that keep 95 per cent of the population engaged. Then you can create uppselling options, he said.

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  • http://twitter.com/Calli Callie O Farrell

    Try personalisation of channels? Content creation needs a route to an audience – so who is the producer?
    Same infrastructure different media. And most importantly different social dynamics, different search criteria.

    New Territory

  • John Newby

    This is so true. Our model is already broken down, our efforts to live in the old world are only hiding or holding us back from the ability to enter the new world. Yes, we need to ride the wave of print, but we must understand the waves will break as they approach shore and what are we left with is backwash.

    We must be willing to innovate and try new things without the risk of losing a job. We must also come to the understanding that innovation isn’t group think, that is only a surefire path to stagnation and the least resistance.

  • SunburnedZebra

    Most of what I have read about the newspaper (excuse me, newsmedia) industry’s need to change (on a scale from fine tune in the 70′s to radically in the 10′s) is merely a variation on a theme.

    Back in the 70′s, the issue at hand was 18-34 year olds; today, it’s — well — everything. All we do is talk about change….and talk and talk and talk. Too often, those with the power in our industry have absolutely no idea (look at R&D budgets: $0?); and until they delegate some authority (and investment funding) to those WITH an idea, nothing will change radically enough..

    It’s like a cop & hospital show on TV, where the paramedic holds the mortally wounded victim’s hand and say’s, “you’ll be ok” as the second liter of blood drains onto the ground. The paramedic has no idea…nobody does until we know who the trauma team is; a good one who knows what they are doing will work hard as all hell and save the patient; the merely adequate one will work hard as all hell but then ultimately watch a flatline.

    Unfortunately, too many newsmedia trauma teams have been merely adequate for years. And lately,many of the best-trained and most experienced members of the team have been “retired.” As a “society,” we’ll live; as individual members of that society, know where the closest five-star Level 1 trauma center is. The blood is flowing. – Gary

  • Andree G. O’Meara

    One challenge I see here is to articulate what will be those new values that people will be paying for or that advertisers will pay for… it might not be so obvious. For so long, the industry created the “copy value” and was paid handsomly for it. I also don’t think the ad agencies nor their clients are clear as well. Some have well established strategies and goals but it is still the minority as far as I am been able to observe.
    Also, it’s not like the industry has had a resounding success with the last transformation – The web has not been the biggest success department at most publisher.

  • martijn van beek

    The cloud development will only partially “solve” the whole copyright issue. Why? Because it will probably still be possible for paying customer x to “record” the stream and ditribute it to the non paying customers y and z and so on. Think of all the tools already out there to record streaming video/audio?

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