Why the Digital Experience Will Undermine the Power of Content

When you visit a website in your phone’s browser, what’s the experience like?  Do you quickly get to where you want to go?  How’s the load time? What about pre-roll and auto-play videos; they’re still awesome, right?

I’m going to go out on a limb and predict that if content is still king (yes), and video its queen (yes), then the viewing experience is the heir to the throne.

Owen Williams, reporter for The Next Web, recently posted an article highlighting the difference in page load times on Safari using a new ad / tracking blocker for iOS.  It’s pretty dramatic and quite impactful on the user experience.  The idea got me thinking about the future of content and digital experiences.

If publishers depend on ads for revenue, and consumers are working to eliminate ads, how will publishers and content owners make money?

My prediction: subscription services that offer premium content in an ad free environment.  This goes beyond just the basic premium paywall (i.e. Wall Street Journal et al) to digital publishers moving towards owned and operated, vertically integrated sites that publish multiple forms of media across multiple channels.  For one price, you get access to live and on-demand videos, podcasts, websites, blogs, and apps.  Consume your favorite content when, where, and how you want for about the cost of a latte each month.

Why do I think this will work?

Advertising is Changing, Rapidly
Selling advertising is capital intensive.  Employee salaries, ad servers, digital infrastructure, analytics; there’s a billion dollar industry built around advertising.  The challenge: it changes quickly and advertisers are fighting a battle on multiple fronts.  Programmatic selling is dramatically altering the advertising landscape.  Subscription models reduce these costs, ultimately shifting expenses away from sales infrastructure to content production, which brings in audiences.  (See Netflix and HBO)

Brand are Pushing Back
Debates over ad viewability, fraud, ad effectiveness, and basic buyer-seller transparency are taking place right now.  In May, Kellogg’s pulled their digital ad spend from YouTube and Facebook until third-party viewability companies can audit the numbers.

Digital advertising isn’t going anywhere.  While subscription models may gain more prominence in the months and years ahead, no publisher, regardless of their business model, is going to say “no thanks” to a brand looking for a partnership.  They may be more selective and thoughtful, but they’re not going to ignore the pot of gold for very long.

Instead, I predict that partnerships will be structured across an entire digital ecosystem.  Whalerock Industries launched Digital Media Hubs for celebrities to consolidate all their content into one subscription service.  This is a great example of an integrated experience that can be selective in the types of partners they bring on, charge a premium, and make sure the experience remains paramount.  However, brands aren’t going to be satisfied with impressions and product placement alone.  Audience engagement and interaction will be a requirement.

It’s Already Happening With Television
Consumers are subscribing to OTT services and changing the dynamics of media companies’ bottom line.  So is it such a stretch to think that consumers would pass on a subscription fee for a web experience that delivers the content they want, in the format they want, without the ads? 

Check out Jamie & Adam Tested.  There’s a host of original content on the free site, supported by display ads, but the premium content is available in an ad-free environment for subscribers.  Better experience, more content, no ads.  All for less than $4 a month.  Sound like a familiar model?

The Experience Will Take on Greater Importance

Sites that deliver a great viewing experience will be able to retain and grow their audience base. If publishers can’t deliver a good viewing experience, why would the audience return?   

I’m not talking just about load times and a clean layout.  I mean simple, cross-platform opportunities for fans to engage with the talent, interact with other fans, and be a part of the community.   Interactive video technology exists to support this, it just hasn’t reached critical mass yet.  It’s time is coming.

Multi-Channel Networks (MCNs) are Struggling

The recent report that Maker Studios isn’t exactly crushing it after being acquired by Disney is symbolic of the struggles facing MCNs. Costs are growing, the competition for talent is increasing, and revenues aren’t keeping pace. 

The theory behind MCNs was simple, but so far they’ve struggled.  Part of this is due to the business model.  Part of it is due, in my opinion, to the fact that they’ve surrendered control of the viewing experience to YouTube, in exchange for outsourcing ad sales.  (A generality, yes.  Hindsight being what it is however, how many MCNs would take a different path if they could do it over again?)  

Data, Data, Data

Controlling all your distribution platforms gives you greater access to audience data, which leads to better con­­­­tent, lower production costs, and a more engaged audience.  Spreading yourself across channels you don’t own limits your ability to gain insights from audience behavior.  Look for digital publishers to move towards O&O models- and the data it supplies - very, very soon.

We’re approaching a tipping point where the rule of content as autocratic king is nearing its end.  Not to say that content won’t continue to rule, but I think we’re going to see a more democratic approach to consumption, where there will be more voices at the table. Good content in a bad experience won’t survive because there will simply be too many other entertainment choices.

If you thought Game of Thrones was bloody, keep an eye on the media industry.  Not everyone is going to make it.

What do you think?  Leave your thoughts in the comments below.