Internet and traditional media paths always seem to intersect in the same conflict. The old-school media companies compete with the rapidly growing and highly dynamic new-generation media. In this war, newcomers usually win. For them, solving the content issue is easier than resolving the technology and understanding required for this investment for traditional companies with powerful content.
Apple, for example, proved to be more skilled than music companies, and today it and YouTube control the music market. Newspapers and magazines struggle to survive while Google earns billions of dollars from the ads it places next to the content.
Recently, I had a conversation with a friend about video content, which has rapidly risen to the forefront of digital advertising along with mobile.
Google’s acquisition of YouTube, which seemed astronomical to everyone at the time (1.65 billion dollars), along with Apple’s attempt to monetize this business in the iTunes Store with movies and TV productions, was countered in 2007 by a major move from old-school representatives (NBC and News Corp): Hulu.
Despite the predictions of experts(!) in the internet world, this attack turned out to be a success. Hulu still makes good money despite strong competitors such as Netflix that have transformed their business within a year of launch. It’s pretty simple: quality content.
The content on YouTube and similar platforms is rich and diverse, but advertisers consider most of it worthless. It is still more attractive for advertisers to appear in high-quality productions rather than videos created by amateurs. Yes, cats are cute, but why would my ad appear in a cat video instead of Game of Thrones?
As a result, YouTube quickly adapted to this new reality, increasing its profitability with innovative revenue models. The old guard uses the content advantage to compete with the new market, but the new generation moves faster, rapidly evolving and taking the subject further. Hulu insists that YouTube and similar platforms aren’t competitors, but their real victims are the traditional channels they left behind. Who would still pay dozens of dollars for cable when any high-quality content can be viewed online?
So, what can we learn from this? The old guard can still attract viewers to the screen and make money from it. Despite their sluggishness, newcomers earn much more money with dizzying speed and brand-new models in a shorter period of time. The Old-New Media war may continue in new areas, but those who combine quality content with good presentation will win.