Over the past three years, I’ve published the blog ViralHousingFix. The content focused on trends in the housing market and the overall economy and the impact of changes in consumer behavior and advertiser resources on the media industry.
As I’ve explored each of these topics, I have found my focus narrowing to a question that has intrigued me throughout my professional career: How do you create Value in Media?
It dawned on me that my focus and my branding were out of alignment and that something had to change.
As a result, I’ve ported VHF to a new URL and given it a new name.
You’re now reading [Media+Value] at www.themediatransformation.com.
What is the focus of [Media+Value]?
Value can only be created in media through a direct equation: Consumers are inspired by content to make an economic commitment to a party. There is no other way to create Value.
But the number of ways that a media provider can execute this equation have become dizzying.
We can’t even agree about what a media company looks like anymore.
Here’s an example.
There’s Facebook. As far as I can tell, Facebook meets all the requirements of a media company. So does Zygna, the producers of Farmville.
But they don’t look anything like the media companies of the past.
These new media companies have combined tools and content, have made delivery part of the consumer experience, have incorporated information and data into the media equation and have created new currencies for consumers to use and trade.
Ultimately, however, the value can only be created through a cash payment by the consumer to one of these parties, or from a third party who wants to interact with the consumers engaged in the content experience that Facebook or Zygna provides.
When the path to that transaction is made clear — how frequently it will happen, how much it will be worth and how much it costs to incite that transaction — then the ultimate path to value for the media company is clear as well. Investors can speculate on the current and future value of the company based on their estimates — wild or conservative — of how large the company will get.
That’s the fusing of creative energy, operational genius and capital imperatives that makes the media business so exciting and alluring.
[Media+Value] will explore the strategies, tactics and trends that are emerging in both new media platforms and traditional media platforms that have been able to transfer their market expertise and relationships from the old to the new.
In every case, [Media+Value] is searching for the path to profit.
That path to profit can disrupt traditional media paradigms, but it can’t destroy the underlying value proposition in a market. There is no value at Zero. For a media proposition to work, it has to be able to extract a profit from its activity. While traditional sources of profit may shift, there ultimately are only two paths to profit: having consumers pay you for something that you give at a price higher than it cost you to acquire; and having third parties pay you something for access to the consumers that you are engaged with — either directly or indirectly — that is more than what it costs you to engage those consumers.
My experience developing media properties, implementing transformative technology and realizing value through growth have shown me that there are realistic roadmaps for media transformation. The challenges are not always in the model. Often, a key challenge is the willingness and ability of companies — both leadership and ownership — to look at their business in a new way, redefine their core processes and attract the new talent that can lead them down these new paths.
That’s what this blog will focus on.
I will continue to blog on topics related to the housing industry and the development of social media marketing solutions for local businesses. You’ll find those posts at our NCI blogs, including The Apartment Finder Blog, the Real Estate Book blog, Digital Sherpa and Community Sherpa. When I post in those locations, I’ll let you know here.
To those of you who have been part of this blog for the past three years but don’t have a passionate interest in how value is being created in the media landscape, thank you so much for your support. I hope you’ll follow NCI in its other locations.
To those of you who share my same curiosity about how the question of media and value gets answered, I hope you enjoy this narrowing of focus. I’m eager to hear what you think. Be part of the dialog — either on the blog in the comments, on Twitter, by e-mail or in person. I would enjoy hearing from you.