4 strategic tipping points for digital content providers

Legacy and born-digital content creators are now approaching tipping points where they will be forced into deep strategic thinking and choices that will affect their future operations. Consideration of the platforms on which they operate, the platform(s) that receives preference, and the income and expenses they will bear will all inform the strategic choices.

The growth of digital consumption is forcing content creators to confront issues of offline and online consumption, but also to respond to the rapid growth of consumption on different types of digital devices—especially mobile devices. These changes are moving many firms closer to the tipping points.

In deciding how and when strategy needs to be reconsidered, managers need to watch for four critical strategic tipping points. These are points at which significant contemplation and decisions must be made or the enterprises will be put at risk by indecision:

1. When content income surpasses advertising income

2. When digital income exceeds print income

3. When mobile use (tablet, smartphone) tops desktop/laptop use

4. When income from print products no longer pays the costs of print operations

The issue of content income surpassing advertising income is important because it means that greater company attention must be paid to consumer needs and desires and that the advertiser interests must become secondary.  This represents a significant change in focus that has not been the norm in commercial media for 50 to 75 years.

When digital income surpasses offline income the question of whether a digital first strategy is desirable becomes moot. At this point digital first strategy becomes imperative and factors that may have been previously moderated moves in that direction must be overcome.

A number of content providers have already reached the mobile tipping point, where the majority of their content use and time comes from tablets and smartphones, and many others are rapidly approaching that point. At this point content production can no longer start with the version for print or desktops/laptops and be migrated to mobile devices, but needs to switch to production for mobile devices with larger screen devices and print secondary or tertiary in importance.

Those working both offline and digitally are likely to reach a point in which income from print products no longer pays the costs of print operations.  Some have already surpassed it. This will force them to confront the issue of whether to stay in or exit print. There is no simple answer to the question because it involves complex cost accounting and brand issues. When the tipping point is reached, however, the question must be considered in much the same way as digital services which did not stand alone financially in the past were supported by print.

Companies will respond to these tipping points in different ways because of their varying markets, resources, cultures, and capabilities. The important thing is that managers watch for the tipping points, consider their implications, and consciously make decisions about how they will respond to them.

A fundamental shift in the mode of news production

Changes in news production and journalistic employment are often simplistically explained as the results of technology, recent economic conditions, or changes in audience preferences. All these factors have played roles, but a more fundamental and consequential shift is altering the nature of news work and news production.

For more than a hundred years news production has been characterized by the industrial mode of production in which news factories mass produced news. They brought together the resources and equipment necessary for gathering and disseminating news and they relied on trained and professionalized news workers. The product became property exchanged in markets, with geographical, market, and economic factors constraining competition to provide news products.

Although some elements of that production mode remain in place, one can observe news provision splitting into two new production modes—a service mode and a craft production mode. These have enormous implications for the work of journalists and how news is provided in society.

The service mode is one in which news products (newspapers, broadcasts) are being transformed into services with news providers streaming news and information across a variety of platforms, such as print, computer terminals, tablets, and smartphones, and other screen-based devices. They are now focusing more on distributing news rather than gathering and producing it and are relying more on news and commentary produced by news services, content provided to them by the public, and links to other news providers than on their own production.

These news service providers are using pricing models that differ from those of the original product base, with varying prices for access to different bundles of platforms and different levels of access to premium and specialized news content. Pay systems such as those of Press+ and Piano Media are providing mechanism for paid access to multiple news providers—a new form of service. The shift to the service production mode follows that of the paid streaming audio and video services that have proliferated in the past decade.

The shift is making news service providers increasingly dependent on acquisition of news content produced by others, leading them to offer their content at relatively low prices, and inducing them to create better user experiences.  We will increasingly see such services offered at the national and international levels by larger news enterprises.

Concurrently, a different form of production is developing and gaining acceptance–the craft mode of news production. This is production by journalist entrepreneurs and small-scale journalistic cooperatives that are emphasizing the uniqueness and quality in their news. Those working in the craft mode are focusing on special topics such as climate or defense, employing specialized techniques such as investigative or data journalism, or serving smaller localities as general providers. Most are providing news directly to consumers, as well as providing materials to those practicing the service mode.

These new modes have important implications for how journalists work, the resources available to them, and how they organize their careers, compensation, insurance, and pensions. To date, little consideration has been given to how cooperative institutional support for news workers should be organized in this new environment. Journalists unions remain an artifact of the industrial mode of production and are changing very slowly and professional associations remain focused on issues other than work and labor. Something needs to change.

Media, communication and struggles over transparency

Issues of transparency are not new, but have been magnified in the information society—often because of the scale and scope of information available—and because news media are increasingly part of the story, not merely, the storytellers.

The roles played by leading newspapers worldwide—the New York Times, Washington Post, The Guardian, Le Monde, O Globo, El Pais and others—in reviewing and publishing stories based on disclosures by Wikileaks and Edward Snowden’s NSA files have thrust them into the debate about how much transparency society needs. Arguments over information they published and whether disclosures serves public purposes have been animated. These debates highlight differences in views about transparency in security matters, but they also are forcing society to address more fundamental issues about transparency involving many other issues.

Transparency debates are not just a struggle over information and secrecy, but about the bases of human interaction and experience. Transparency is a philosophical and ideological concept based on the view that disclosure is good for society. From a philosophical standpoint, however, transparency is not good in itself—like serenity, beauty, or truth—because for thing to be good in itself it cannot produce harm. Transparency, however, can produce negative consequences by harming dignity and modesty, creating surveillance and means for coercion, endangering public safety, fuelling violence and conflict, and exposing proprietary information in ways that harm economic development.

Transparency does have functional value for achieving desirable outcomes, such as understanding the environment, exposing corruption and abuse of power, promoting trust, facilitating democratic decision making, and making price evaluations in markets.  Information must be available or effective choices cannot be made. But it is not exposure merely for the sake of exposure, so it must be balanced with concepts of privacy, solitude, and security—which lead to debates about when and how transparency is practiced.

The debates taking place today are part of a highly visible struggle over transparency in information age. Digital platforms and all media are playing central roles in debates about the proper extent of transparency involving government, business, banking, and our personal lives. Media themselves are also gathering and using data from their users for their private gain, just as are other companies.

Some of the debates are occurring because of the differing norms and mores of the material and digital world. The norms of the material world tend to involve structure, authority, control, hierarchy, and formality; whereas the norms of immaterial world involve amorphous arrangements, collaboration, empowerment, egalitarianism, and informality. These differing norms and the struggles over the norms have significant implications for government, business, and personal life. They are part of a fundamental struggle over the political economy of information and data.

Wikileaks, Anonymous, and other actors are active participants in the struggle and battling powerful commercial and governmental forces that wish to impose the norms of the material world into the digital, non-material world. It is not surprising they have brought major media into their campaigns, nor should not be surprising that they have fallen afoul of state power. Activists with libertarian and anarchistic tendencies have historically generated backlashes from the state and elites because threats to power typically result in the exercise of power—a very Machiavellian response.

The debates over transparency, the use of information and data, and who should be transparent about what will grow more heated in the coming years. Media and media businesses will play important parts in the debates, not merely as conveyors of information about others, but also about the extent to which they will become more transparent on their own.