Sunday, November 26, 2006

Brave New Digital Media World -- Content Will Always Be King

Digital media is poised for yet another explosive holiday season, with digital video now taking front and center alongside digital music. Recent exciting developments that will supercharge continued digital media excitement this holiday season include Google's recent acquisition of YouTube, Microsoft's launch of Zune (both the site and the device), and Apple's continued refinements in the iPod and its iTunes store, the latter which now more prominently features movies and TV shows (with rumoured continued iPod enhancements coming shortly in January -- expect a larger video screen, among other things).

All of this excitement bodes well not only for consumers -- i.e., more choice and more fun -- it also bodes well for artists. Due to the enhanced profile and ever-increasing importance of digital media in the lives of consumers -- and, hence, the growing importance of YouTube, iTunes, Microsoft and others -- content owners are now properly more focused on taking their rightful "share" of the opportunities that their content has helped to create in the first place. This means that content owners are now able to negotiate deals (including profit-sharing) with these distribution companies that previously were impossible (witness Microsoft' recent deal with Universal Music Group in this regard). All content owners will benefit by these trends -- even those along the "long tail" -- as digital media will continue its accelerated march forward to increase the utility, fun, flexibility and ultimate freedom of choice for consumers. There will be a continuous parade of newer and newer and cooler and cooler "must have" products. And, all of this will only fuel the demand for more and more compelling content ...

Artists and content owners (including content aggregators) will benefit handsomely and rightfully from this. And, the definition of what is "compelling" (i.e., coveted) content will only expand with the expanded power and flexibility of digital media solutions -- hence, the theory of the "long tail" (i.e., the power to identify and access precisely what content is relevant to YOU, the end user).

There was a fascinating feature article about legendary music executive Jimmy Iovine of Interscope Records by Robert Hilburn in today's "Calendar" section of the Los Angeles Times titled "Ears Wide Open" (this is a must read for anyone interested in the music industry and in digital media in general). In this article, Jimmy Iovine notes that "Until now, the record industry has thought primarily in terms of defense -- 'How do we stop the leak?'" In other words, Iovine correctly notes that the record industry for the past several years has feared technology and digital distribution. Only now are things really changing (again, witness the recent Universal Music Group/Microsoft deal and the various YouTube deals with the record labels). The technology should not be feared. Rather, the technology -- including the power of online interactivity (between artists and fans, or between fans and other fans, as examples) -- can be harnessed in powerful new ways both for fan enjoyment and excitement and for profit by those who rightfully deserve it because they made such enjoyment and excitement possible in the first place.

Bottom line -- new technologies always have brought, and will bring, new opportunities for increasing media enjoyment, power and flexibility. And, anything that brings new excitement in and around media/content ultimately will benefit content creators and owners ...

We are still in the early innings here.