The Consumerization of Media
At the recent BonusMX conference in Mexico City, I presented about a new idea. In this posting, I’ll describe it and give a few examples.
The Consumerization of Enterprise
A major recent trend in corporate business has been the “consumerization of enterprise”. This means consumers are affecting the technology and methods at the enterprise level.
Enterprise normally means large corporate structures (generally defined as companies with more than 5,000 employees), but it also includes any large organization. The Catholic Church, the government, or a large charity are also enterprise-level organizations.
Up until now, for better or worse, the tools and procedures of these organizations were determined at the top by experts who decided what would be done and how it would be done. This standardized the enterprise. Those decisions were broadcast downwards to staffers, who had to use the approved tools. For example, there are hundreds of spreadsheets, but when the head of accounting decides on Microsoft Excel, that becomes the standard spreadsheet within an organization.
A good example was the Blackberry phone. Nearly all cell phones are easy to hack, but the Blackberry has strong encryption. Company security teams want to keep the company’s communications and files secure, so they chose the Blackberry as the official corporate phone and banned the use of other phones. The Blackberry became the standard phone of upper-level staff at large corporations and governments.
However, the consumerization came along. This means employees prefer consumer-level products, despite the orders of upper management. Eventually, these low-level consumer-quality products replace corporate products. The Blackberry was a great phone (I had one), but the iPhone was new, had other features (bigger screen, better images, and so on), and was more popular. People began to switch to iPhones, even though it lacked Blackberry’s security. After several years, enterprise IT security gave up on banning non-Blackberry phones. iPhone and Samsung phones took over.
The same is happening with all sorts of corporate tools. Organizations decided that staff would use an internal communications platform, but employees know Facebook, Twitter, or SMS and they prefer that. This is especially true if the person is under 25 years old; they often don’t even use their company’s email address (or even use email at all. Only 1% of teens use email today).
In Silicon Valley, I’ve noticed that most of my communication with other people is outside their official accounts. They use Gmail, Yahoo mail, Facebook, WeChat, Twitter, LinkedIn, or chat tools to communicate. Nearly all of them use their personal cellphones, not their office desk phones. There are two reasons for using personal cell phones: although they move from company to company, they keep their personal cell phone numbers so they stay in touch. Secondly, it’s never quite clear if desk phones are monitored or taped.
Bring Your Own Device (BYOD)
The same for computers. For years, companies chose and bought the computers. For more than a decade, these were Windows computers with Microsoft Office. But in recent years, people are using their own laptops, and now, increasingly, their own tablets. Enterprise hurt itself by first refusing to pay for tablets (I remember how these were seen as frivolous consumer toys) and second, not supporting the switch to mobile devices. Users quickly began using Dropbox and other tools to move and store corporate files, which undermined file security. Another horror for IT was the sudden loss of control over the corporate network. IT owned the network. They assigned logins to staffers. They monitored and turned off a staffer’s access. But cell phone companies added WIFI hotspots (which means the cell phone can connect to the web and devices could then connect to the cell phone to reach the web). You can be in a corporate office and bypass the company’s network altogether. At some companies, IT teams actually walked around with handheld devices to detect unauthorized WIFI hotspots to shut them down. They were quite right to do this: it’s a major security hole, but in reality, it became impossible to stop this because workers were using these WIFI hotspots at home, in restaurant, the airport, and hotels. (If a hotel charges for WIFI, I simply turn on my hotspot and connect to the web. Why pay for WIFI?) Workers learned from each other (or their kids) how to do this and they don’t need to bother IT anymore for permission to connect a device.
When companies and IT give up and let the workers choose, it’s called Bring Your Own Device (BYOD), which means the workers choose the device. At many Silicon Valley startups, the companies don’t provide laptops or desk phones. They simple assume the workers have their own devices.
So, the consumerization of enterprise means corporate processes and tools are undermined by staff making personal decisions to use their consumer products instead of the corporate products. It means the organization loses control over the tools and processes. If the organization doesn’t adapt, it will wake up one day and find everyone is using unknown tools. A further problem: the organization will also fall behind in technology and innovation.
The Consumerization of Media
Okay, so what was the idea that I introduced? It’s related. By working on the idea of content marketing, I began to realize the same process was happening to media. So I call it the consumerization of media. This means the production and distribution of media, which was once controlled by large companies, is now determined by consumers, not the companies. The purchasers of media (the consumers) are deciding how they want to read or watch content, and the producers (publishers, the music industry, movie makers, etc.) are forced to adapt.
Up to recently, each media industry controlled the production and distribution of its media. The music industry decided the size and length of records and CD, the pricing, and how these were distributed. The movie industry released movies through chains of movie theaters in complex distribution deals. Books were standardized by size, pages, and pricing and then distributed through bookstores. The only choice for consumers was which item to buy, but they had practically no choice on how they would consume the product. (That’s a horrible concept, but we don’t have a better way to say it. You read a book, watch a movie, or listen to music, but we say you consume media. Someone, please come up with a better phrase!)
Books as an Example of the Consumerization of Media
Let’s talk about books (you can apply the same discussion to video and music). In 1450, some 560 years ago, Guttenberg began printing books in Europe (the Chinese were doing this a thousand years ago, but whatever). Guttenberg was not an author. He never wrote or published original work. He was a businessman and saw printing as a way to make money. At the time, a bible was copied by hand and cost a small fortune (a village collected money to buy a bible). So Gutenberg printed bibles. This set the basics of publishing for the next four years: publishers owned the printing press; they chose what to print (and they also rejected books); they set the price; they controlled the distribution. All of this was done by business people, not writers. The readers were passive recipients whose only choice was which book to read, but not much else. This model survived for an astonishing 550 years and resulted in large publishing companies based on text (publishers of books, magazines, and newspapers).
Digital collapsed the production costs of books. Once a digital file has been created, it can be duplicated perfectly and unlimited. There are no production costs. In a deeper sense, the copy isn’t a copy; it’s identical to the original file. Digital wipes out the costs of investment in Heidelberg Press (a printing machine the size of a train locomotive) and the salaries for skilled technicians to operate it. They’re not needed anymore.
The distribution system began to break down in the late 80s as the internet arose. People found they could post and release texts on the Internet. Other people could find these texts, read them, and distribute them further. Because the texts were in digital format, it was essentially free to distribute them. Texts could be distributed worldwide (for a number of historical and political reasons, there’s no such thing as international book publishing. Books are published by publishers in each country.) The web made it possible to distribute a book worldwide.
If reproduction and distribution is free, then many texts became free, which broke the pricing model. Most paperback books were generally (in the 90s) US$10-15. That was seen as a fair price to cover the costs of running a publishing company (editors, staff, etc.), printing, distribution trucks, bookstores, clerks, and so on. But what’s a fair price for digital books when production and distribution costs are zero? At Amazon, hundreds of thousands of books are free. This spelled the end for bookstores. Borders, a mega bookstore chain with nearly 700 stores, went out of business. Barnes & Noble, its major competitor, is in trouble. Over a thousand small bookstores closed in the last ten years in the USA.
The other big change in books was the switch from print to tablets and smartphones. The first iPad appeared in 2010. Tablets are cheaper than laptops, easy to carry around to cafes or on airplanes, and can be used by the pool, on the sofa, or in bed. Sales of desktop and laptop computers are falling as people switch to tablets. I love to read; I’ve read more than 30,000 books; I have some 5,000 books in my house. I thought digital devices would not replace books. But I got one of the first iPads (I have two now) and I have a Samsung Note 3 (a large cellphone). There’s no doubt: it’s easier to read on a digital device. I can read anywhere. I have several hundred books on my devices. The devices are synchronized, so I can set down the Samsung Note, pick up the iPad, and continue reading at the same page. I can click a word to look it up in the internal dictionary. I can click Amazon, buy two or three books (which download in a few seconds), and have more to read. I can read two online newspapers and three sites for essays and ideas (3QuarksDaily, Aeon, CounterPunch), none of which I can get offline.
The switch to mobile devices is forcing text publishers (publishers of books, magazines, newspapers) to adapt their text to be readable on those devices. At first, they came out with apps, but that didn’t last, because readers didn’t want apps. They wanted the website. So publishers created mobile versions of websites, such as m.time.com, m.nyt.com, and so on (the “m” marked the mobile version). But again, people wanted the main site, and publishers didn’t want the headache of maintaining two sites. Furthermore, every month brought yet more smart phones and tablets in different sizes. The current best solution is the concept of “responsive design”, which means the publisher builds one site and the site is able to detect the size of screen and then resize itself accordingly. The cost is absurdly low; a responsive design template is US$25 and there are thousands of them. That’s right: a publisher’s web that once could cost $100,000 or more can now be set up for $25 and it works better.
As for writers, the changes in publishing are astonishing. Book printing was developed over a period of 550 years so a modern book is a complex process. Traditional book production could involve 20-30 people; now it can be done by one person. I’ve written more than nine books. The first eight were published by publishers, so I know quite well the tremendous amount of detail work to convert a text into a printed book. Very little of this is obvious to the reader. For my 2013 book, I decided to use digital publishing at Amazon. The production workload was easily cut by 80%, and now, after several digital books, I could cut it by 95% from traditional book production. This makes it easier for me to write, so I released a major book in May 2013 and two 50-page ebooks in October and November. This speed would not be likely under traditional publishing.
Finally, people ask me about production quality. I’ve also printed my digital books and the print quality (if you know what you’re doing) is just as good as a book printed by a major publisher.
So you see the impact of digital on book publishing. It affects the production, distribution, pricing, and sales, including the costs and speed for all of these.
The Impact of Digital on All Media
The fundamentals of media production were established by Gutenberg 550 years ago. Over four centuries, publishers controlled production and distribution.
But digital is radically changing every media: music, sound, video, photography, and so on. A single person can create music; some music artists earn US$300,000 per night, and they do this night after night. Movies are being created with inexpensive handheld cameras and released via the web that earn millions.
My key point: it’s not the industry that led the change. It’s the consumerization of media, carried out by the consumers and authors, the outsiders, the ones at the bottom, that led the change simply by choosing cheap, flexible alternatives. The media industry’s only choice was to either adapt or die. Who controls publishing, production, and distribution at the New York Times? It’s no longer the publisher. The readers are in control.
This has serious implications. Gutenberg set up a nice little business project by printing bibles. But the results were beyond anything he could imagine. Before, only highly-trained priests could read and declare the purpose of a sentence in the bible. But soon, everyone began reading the bible for themselves. Different opinions arose. That led to movements. Which led to the Reformation, the Counter-Reformation, the Inquisition, and religious wars (which are still going on today in Northern Ireland). Over 100 million people died in these conflicts. The Catholic Church was dealt a severe blow and never recovered. The royal kingdoms of Europe were wiped out in flames and blood. Medieval Europe was overthrown. The widespread distribution of ideas and books brought about the Renaissance, the Enlightenment, and the Age of Reason and Science.
What will be the result of the democratization of media? What will happen to established religions, governments, and companies when anyone can publish and distribute their ideas as books or videos? There is no doubt these organizations will fight to preserve their authority, wealth, and power. Digital media is a deep threat to them. Just like knights and priests, they will not survive.