‘A comedy of errors, except it wasn’t funny.’ Are days of free content over? Is there a reliable compass for B2B marketers?
As New York Jets coach, Rex Ryan quipped after his team’s painful blunder-filled November loss to Jacksonville: “It was a comedy of errors, but it wasn’t funny.” That summed up the year 2009 and the first decade of the new millennium for that matter. The decade started with the bursting of the .com bubble, followed by 9/11 terrorist attacks, several military quagmires in remote corners of the globe, a credit-fueled economic expansion that finally collapsed on itself and a painful unraveling of the U.S. economy whose wrath has not been seen since the Great Depression. More than one in 10 American workers are out of work (vs. four percent at the beginning of the decade), millions of homeowners face foreclosure and our homeland security still has major holes as evidenced by Christmas Day airline bombing plot in Detroit.
After record setting volatility in the U.S. financial markets, most major indices ended the decade slightly lower than they began it. The S&P 500 index for example, returned minus 0.8 percent on a 10-year annualized basis. While investors in U.S. equities didn’t really lose much on paper, they failed to keep pace with Treasury bills and the inflation rate, which is hardly worth the risk and anxiety they endured for their trouble.
Is there hope? Coach Ryan’s Jets miraculously found their bearings down the homestretch, flummoxed the odds makers and sneaked into the NFL playoffs. May the rest of us be so lucky in 2010.
“The mood is pretty optimistic in the way that you if you’re nearly killed in a car accident, you’ve got a renewed positive outlook on life,” Sunil Dhaliwal of Boston-based Battery Venture Partners told the New York Times this week.
One tough decade
“The oughts (the "uh-ohs"?) were a tough decade on a macro level, quipped blogger Seth Godin. “Front page news events will give the textbooks plenty to write about in the years to come. But on a micro level, on a personal level, this was a decade filled with opportunity. The Internet transformed our lives forever. Opportunities were created (and many were taken advantage of). And, like every decade, just about everyone missed it. Just about everyone hunkered down and did their job or did what they were told or did what they thought they were supposed to, and just about everyone got very little as a result.”
A December study by the Pew Research Center for The People & The Press, found few Americans have fond memories of the past decade. By roughly two-to-one, more say they have a generally negative rather than a generally positive impression of the past 10 years. This stands in stark contrast to the public's recollection of other decades in the past half-century. When asked to look back on the 1960s, 1970s, 1980s and 1990s, positive feelings outweigh negative in all cases.
Happy to put the 2000s behind them, most Americans are optimistic that the 2010s will be better. Nearly six in ten (59%) say they think the next decade will be better than the last for the country as a whole, though roughly a third (32%) think things will be worse. Just about every age group, except the Baby Boomers, is optimistic about the next decade.
Technology and social networking: friend or foe?
The majority of U.S. consumers see cell phones, the Internet and e-mail as changes for the better, and most also view specific changes such as handheld internet devices and online shopping as beneficial trends, according the Pew study. Most see increasing racial and ethnic diversity as a change for the better, as well as increased surveillance and security measures and the broader range of news and entertainment options.
The 2000-2009 era was clearly the decade of the Internet, or more accurately, the second-coming of the Web, after Web 1.0 was left for dead by the .com bust in the late 1990s. Media and information companies dodged a bullet in the late 1990s and smugly assumed that Web 2.0 would crash and burn the same way. Not this time cowboy. By the time conventional got its weapons locked and loaded against the new threat, the virtual gunslingers left town with bags and bags full of ad dollars.
About two-thirds of Americans (65%) say the Internet has been a change for the better, while just one in six (16%) say it has been a change for the worse; 11 percent say it hasn't made much difference while eight percent are unsure. This largely mirrors the balance of opinion at the close of the 1990s - the decade that saw the widespread adoption of the web.
The public is ambivalent when it comes to evaluating social networking sites such as Facebook. About a third (35%) call them a change for the better, 21 percent say they have been a change for the worse, while 31 percent say social networking sites have not made much of a difference and 12% are unsure. In fact, even among young people, fewer than half say social networking sites have been a change for the better. Tweet that!
Leveling the global playing field
But, for all its creative destruction, we think historians may look back at the 2000s as the “Level Playing Field Decade.” We became a truly global economy, and even as the U.S. slogged through the decade economically and militarily, China, India and Brazil enjoyed substantial increases in their respective living standards and closed the prosperity gap with the U.S. and Western Europe. Small groups of well trained insurgents can now slug it out toe-to-toe with the world’s major military powers, consumers are armed with better information and more power than ever, and anyone with an Internet connection and a compelling point of view can become a global media force. Oh, and there was that little election last year in which the world’s most powerful nation elected an ethnic minority member president by a fair-and-square vote of the populace.
Marketers: Are we in a recovery or a holding pattern?
If you’re a marketer still wrestling with your budget for next year, don’t look to the macro economy for guidance. You’ll get nothing but mixed signals. The financial markets were up over 20 percent in 2009 and that typically foreshadows an economic recovery. The number of new jobless claims is substantially lower than it was at this time a year ago and government stats say housing starts rose a surprising 8.9 percent in November after falling in October. But today, The National Association of Realtors announced that its index of pending home sales plummeted a whopping 16 percent in November. Go figure.
Despite the hints of an economic recovery, however, many Americans are still spending less. Forty two percent of Americans spent less on Holiday gifts in 2009 than they did in 2008 and only 10 percent spent more according to a December USA Today/Gallup Poll. Consumers have become accustomed to discounts. Three in five (62%) shoppers say they won’t buy an item unless it’s on sale, according to the Discover Card’s annual Holiday shopping survey.
Is the free content gravy train over?
For the better part of 10 years, consumers have been spoiled by a nearly unlimited supply of free news, pictures, consumer ratings, financial information, videos and music on the Internet. Now, there are growing signs that this free ride is drawing to a close as the ad-supported gravy train may be grinding to a halt. Newspapers, with their backs to the wall, aren’t going to be afraid to ask online readers to pay for at least some of what they offer, as a handful of papers, like The Wall Street Journal (Newscorp) and The Financial Times, already do. Experts expect many mass publications to take the “pay to read” plunge because they have few alternatives left. Just no one wants to make the first move.
NewsCorp CEO, Rupert Murdoch, has talked about forming a partnership with a single search engine, which would pay him for the rights to scour the news and entertainment programming produced by his company, rather than letting all search engines crawl his sites. Also Hulu, which is owned partly by NewsCorp, is considering charging viewers to watch some of the TV shows it now streams free.
Magazine publishers, not the most courageous bunch historically, are making noise about teaming up to create a partially gated or freemium article cooperative in which they can sell enhanced versions of what they have been giving away for years. And more and more media companies are planning to charge for apps on iPhones and other mobile devices, as well as on the Amazon Kindle and other e-readers.
Inflection point reached?
“Content providers are trying to put the toothpaste back into the tube, but only partially,” said Alan D. Mutter, a media consultant and blogger. “So we’re looking at some sort of an inflection point, at least in attitude. But I haven’t seen much realistic, hard-headed thinking about how that’s going to happen, so I don’t know how much is really going to change.”
“Quality content is not free,” Mr. Murdoch opined in The Wall Street Journal on Dec. 8, days after delivering a similar message at a Federal Trade Commission workshop. “In the future, good journalism will depend on the ability of a news organization to attract customers by providing news and information they are willing to pay for.”
Media gurus argue that charging online will work only if consumers were offered a much-improved product with the convenience of access anywhere, on any digital device, which is sort of what the magazine consortium has in mind. Jay Rosen, media blogger and journalism prof at New York University disagrees. “People who really think we have to charge or the industry is sunk would be more persuasive if they said at the same time we have to add more value than we’ve been adding,” he said.
Whether you’re a marketer or a media organization, you have more competition from corners of the economy than ever before as the Web continues to break down barriers to entry. Competitors also include your customers/subscribers and sometimes your advertisers/vendors. Size and brand alone will no longer insulate you from the competition. But agility, high value content, finely tuned audience reach and great marketing execution will not only keep you in the game, but will enable you to charge premium prices for your offerings.
Sunday night, the New York Jets convinced 80,000 customers it was worth paying top dollar to cheer them in single digit weather in a decrepit stadium when they could have watched from the warmth and safety of their own living rooms. And the Jets delivered when they had their backs to the wall. So you can you.