Until recently we lived in a world of relative information scarcity. Information was hard to obtain and difficult to distribute. During this period information flows were, for the most part, controlled by a relatively small group of media owners, who created very successful businesses from this scarcity.
We are now entering an age of information abundance. As a result of the inexorable rise of digital technology the increase in information in recent years has been exponential. Google Executive Chairman Eric Schmidt famously put this in some context back in 2010 when he noted that "There was 5 Exabytes of information created between the dawn of civilisation through 2003, but that much information is now created every 2 days and the pace is increasing".
This explosive growth is showing no signs of slowing down. Indeed in their 2011 Visual Networking Index Cisco predicted that by the end of 2015 annual global IP traffic will reach the Zettabyte threshold, that is equivalent to a stack of books from Earth to Pluto 20 times (72 billion miles), and that the gigabyte equivalent of all the movies ever made will be crossing the global Internet every 5 minutes.
This extraordinary explosion in the volume of information created and the ease with which new digital tools enable all of us, not just media owners, to collect, analyse and distribute it is fundamentally changing the relationship that we have with information. Information is no longer an asset to be exploited by the few and passively consumed by the many. It is increasingly a universal currency that is actively traded by us all. Information is power in the digital age, but in a radical departure from the past, this power is now spread much more evenly. And, despite the warnings of impending information overload, it would seem that just as our access to information increases thorough the proliferation of digital devices so does our demand for more of it.
The increasing importance of and demand for information ought to be a positive trend for the media industry yet more often than not the digital revolution has been seen as a huge threat to traditional media companies rather than as an opportunity for growth. Of course there is little doubt that the fragmentation and increased competition inherent in the emerging digital media landscape is upsetting traditional media business models. However, the inexorable thirst for more and more information and the explosion of new digital devices available to sate it also creates extraordinary opportunities for those able to see beyond the destruction of the status quo.
Against this background the challenge for media companies is clearly to meet this emerging digital demand for information in new ways that create more than enough value to compensate for the cost of creating it. And, the good news is that despite the doom-ladened predictions to the contrary, as Apple has shown with the success of iPod + iTunes, creating and extracting this value is not an impossible task even in highly competitive digital content markets, it just requires a new way of thinking that moves beyond the traditional approach of thinking simply about creating products and instead focuses on creating experiences.
This distinction between product and experience may seem somewhat arbitrary yet it is a potentially profound one as it requires us to fixate less on what a product is and more on how and why it is being used. Taken from this perspective value does not lie solely in the features a product has but instead in a combination of the product, the context it creates and interfaces that surround it. This is the experience and, as the success of companies like Starbucks have demonstrated, the value of it can be much greater than the sum of its parts.
Indeed, Starbucks is an incredibly powerful example of this type of experience thinking. After all coffee is, in many respects, the ultimate commodity and the coffee shop business the ultimate cottage industry. Yet by combining a great coffee product with a set of service interfaces that have transformed being a Barista into an art form, and an environment carefully constructed to create a context that is a “third place between home and work”, Starbucks has transformed an entire industry, creating a company with $11.7 billion dollars of annual sales in the process. And, as Howard Schultz Founder and CEO of Starbucks acknowledges this was no accident but a fundamental part of the Starbucks strategy “I think we’ve known for a long time now that Starbucks is more than just a wonderful cup of coffee. It’s the experience.”
And, while all this talk of products and experiences may seem strange in the context of the media business where the product is content and that content is king, if there is one overriding lesson to be learnt from the extraordinary fact that Apple has sold over 15 billion songs through it's iTunes Store since its launch in 2003, making it the number one music retailer in the world, it is that, just like coffee, the inherent value of even the best content can be enhanced by creating the right experience around it.
In this context it is not surprising that new devices and in particular tablet devices have rapidly established themselves as the saviours of the media industry. Tablet based apps can provide an extraordinarily rich and immersive interface for media consumption, perfectly suited to the ritualistic and reflective context in which particularly longer form content is consumed. This is the lean back digital experience and at its best it is so compelling that it provides more than just a convenient alternative to paper but rather a deeper and even more valuable experience that large numbers of people are more than happy to pay for.
Yet just as the success of Spotify and Soundcloud have demonstrated that iTunes is not the only viable digital music experience, so there are other opportunities for media companies to create valuable information experiences in addition to their tablet experiences that address the varied contexts in which people are demanding and consuming information in their increasingly connected lives. Specifically, just as tablet apps have created a compelling context for the lean back digital reading experience, so the increasingly communal context of media can add value to the previously commoditised experience of consuming information on the open web.
Human beings are, and always have been, fundamentally social creatures however our evolving relationship with information means that information has become increasingly fundamental not just to our sense of self but also to the relationships we have with each other. This has created a social information need that is different, but complimentary to, the lean back digital experience of the tablet. In particular this information need is more participatory, more social and less linear and as such is better suited to the characteristics of the open web.
This is media in a community context and as Jeff Jarvis points out under these circumstances the value of content "is not in what we produce but in what it produces: signals about people's interests, about authority, about topics and trends". Indeed as Jarvis goes on to explain this is how platform companies like Facebook and Twitter see content and extract value from it, albeit mostly through advertising, and there is no obvious reason why traditional media companies cannot extract the same or indeed different value from it provided they recognise the evolving role of their content. Indeed, this increasing recognition of the value of communal media may well be behind what on the surface looks like a somewhat surprising decision by Warren Buffet's company, Berkshire Hathaway, in May 2012 to acquire 62 daily and weekly newspapers across the southern states of America. This certainly seems to be implied in his rationalisation of the deal "In towns and cities where there is a strong sense of community, there is no more important institution than the local paper"
Of course in an increasingly digital world there is no reason why these valuable communities need to be restricted by geography, they can just as easily coalesce around a particular set of interests or a specific psychographic. Beyond the media industry Nike has led the way in this regard with its Nike+ running initiative. With a community of over 6 million runners uploading in excess of 500 million miles to the website nikeplus.com Nike+ has been a runaway success enabling Nike to significantly increase its share of the global running market over the last five years. However, even beyond this tangible revenue growth, in the long term the additional ‘strategic capital’ Nike+ has generated for Nike through the accumulated knowledge and insights gained from continuous interactions with millions of runners around the world may well prove to be of even greater value. These are the ‘signals’ that Jarvis refers to and in a world increasingly driven by data they are invaluable. Yet as Stefan Olander Nike’s Global Director of Consumer Connections recognizes they are only attainable with a change of mindset “In the past, the product was the end point of the consumer experience. Now it’s the starting point”.
Indeed even above and beyond the existing tablet and community based experiences the explosion in smartphone usage will create further opportunities for media companies to create new valuable information experiences, with searchability and personalisation at their core. Yet whatever new direction the digital media landscape takes over the next ten years it is clear that those media companies that can successfully create a set of complimentary experiences that harness the extraordinary capabilities of new digital devices and map to the exploding demand for information across different contexts will be best placed not just to survive but thrive in the age of information abundance.
