The New Media Landscape from a Business Perspective

1
The New Media Landscape from a Business
Perspective

• Robert G. Picard
• Media Group, Business Research and Development
  Centre
• Turku School of Economics And Business
  Administration

2
Important Changes in Communications and Media

• from mass to specialised media
• from few media to many media
• from aggregate to fragmented audiences
• from one-way to two-way communication
• from passive to interactive communication
• from fixed to mobile media

3
Digitalisation and New Media and ICT Technologies

• are not revolutionary but evolutionary
• are not revolutions in the sense of the alphabet,
  printing, photography, telegraph and telephone,
  broadcasting
• create additional value through convergence and
  by providing greater speed and flexibility
• shift location of control over communications

4
Implications of digital bi-directional
communications

• customers can play a more active role in the
  creation process
• audiences can influence the content of media more
  directly
• audiences gain selectivity and control
• choose their own communications, use it in their
  own ways, filter and personalise communication
• firms can learn more about their customers and
  provide better service
• firms can customise and personalise communications

5
Digitalisation Does Not Change the Laws of
Economics

• it may change in business models
• it often alters costs structures
• particularly production and distribution costs
• it does not change any economic laws or remove
  need for capital,operational financing, or
  effective management

6
Digital media shift media from variable to unit
cost economics

• less affected by economies of scale, economies of
  scope, and transaction cost
• less need for cost and price competition
• competitors tend to have similar costs
• competition tends to focuses on quality, service,
  and image

7
Acceptance of New Media are determined by

• the extent to which they serve consumer wants and
  needs
• willingness of consumers to invest in hardware
  and software and to pay use charges
• willingness of consumers to use their time
  differently
• whether they harm existing commercial interests
• capital and financial constraints on companies

8
Customers need to be the central part of the
strategy

• What will you give them you arent giving them
  now?
• How is the technology or service relevant to
  their lives?
• How does it improve life or help them?
• Why is it valuable for them?
• Why should they use and pay for the new service?
• Why should they use your service and not one from
  another company?

9
Customers need to be the central part of the
strategy

• Many new media / ICT products and services have
  failed or had slow acceptance because they were
  searching for wants and needs to satisfy
• Reversing normal pattern of product/service
  creation to fill wants and needs
• not a problem-solution approach

10
New Media and Consumer Needs

• New media / ICT creators and operators are
  searching for wants and needs to satisfy
• Reversing normal pattern of product/service
  creation to fill wants and needs
• not a problem-solution approach
• Increases the risks of slow acceptance, product
  failure, or company failure

11
Customer value created through use of new
communication capabilities

• immediacy
• flexibility
• mobility
• common platforms
• control
• response ability
• searching

12
Different wishes of adopters

• innovators are enthusiasts who want technology or
  need high performance
• enthusiasts dont represent all consumers
• general consumers want solutions to wants and
  needs and convenience of use
• success doesnt typically doesnt occur until
  general consumers purchase

13
Time available for media and communications use
is constrained by overall time use
14
Many Daily Activities Compete for Available
Personal Time
work/ school
sleep
personal time
15
Temporal expenditures for media come from leisure
time, driving time, and work time
Media use must be compatible with the time from
which it is taken
16
It is very difficult to change personal time use
patterns

• television channels throughout Europe doubled in
  past 10 years and satellite and cable services
  became widely available
• Amount of programming hours offered increased
  proportionally
• television viewing time increased only an average
  of 2 minutes per year

17
In order to be successfully introduced digital
media must

• displace part of existing time use
• must provide same or better communications in a
  more advantageous
• must be easily used at the time in which current
  use is made
• find new time that can be allocated to the
  media/communications product

18
Monetary expenditures for media must come from
personal spending
19
Personal expenditures result from consumption
choices
savings
disposable income
20
European Communication Spending as a Percentage
of Household Consumption
21
Factors in Consumer Choices of New Media
Technologies

• improvement in providing functions
• desirability
• compatibility with existing technology
• amount of use anticipated
• switching costs
• belief in success of the technology
• temporal and financial resources available