Product Innovation: What is Content?

A friend from the Film/TV world called me recently asking about what the music industry has learned in recent years in regards to the growth of digital and what they were doing differently today.  The company my friend works for sits on one of the most valuable collections if IP in the world, so rightfully so, he is trying to figure out how digital can help him utilise it more effectively.

To understand this challenge better, I keep coming back to the same question: What is Content?

I should mention at this point that Mark Mulligan at Forrester Research has recently written a great paper on this topic titled “Music Product Manifesto: The Product Features That Will Save Recorded Music”.


What is the Problem?


It’s pretty straightforward to understand (and no, piracy is not the sole issue).  Content owners are still stuck in a one “primary product” mindset, be it the 10 song album, the 22 minute sitcom or the 100 minute feature film.  Unfortunately, the consumer’s reservation price for these “primary products” is going down and content owners are losing the ability to influence it.  There is massive downward pressure from retailers who look at CDs and DVDs purely as “footfall” drivers and from consumers who via ad-supported streaming services or illegal P2P sites are getting more and more used to content being free.


Pack on top of that the……


• Unbundling of music

• CD and DVD sales falling off a cliff

• No proven ad-based model for streaming or on-demand that makes economic sense

• The economy still negatively impacting ad budgets and consumer’s disposable income

• Industry imposed release windows pissing off consumers

• Piracy


…..and content owners have to really start thinking about how they can get their content to do a bit more for them.


So What Can Be Done??


Change and expand the product offering.  Offer new types of products, targeted at the rights consumers, at a price that the content owners can now dictate more effectively.
But what do these “new” products look like or again…what is content?  Further, what is monetisable content?

Let’s look at four options:

1. Consumers experience content in a variety of ways.

Solution:  Offer “primary” and “secondary” products together.  Make the sum more attractive to the consumer than the individual parts.  Tickets and merchandise are a good start but the key here is convenience – make the purchasing experience easy (don’t make me go to three different websites to get three different products about the same artist/movie/TV show).

2. Some people like to consume a lot more content than others.

Solution:  Give more to the ones that want more and use the extra content to differentiate the product offering.  The basics here include behind-the-scenes content, outtakes, personal home videos as well as live recordings, interviews or bootlegs.  These can include audio, video or photographic content. But how do you maximise its incremental value?  Exclusivity (content that has never before been released) and convenience are key, as is re-building some level of scarcity online (restricting access to only those consumers who really want it and are willing to pay more for it).  Understand your entire release cycle and create content at the start to satisfy each stage of it.

3. Consumers want to engage and interact with their content more.

Solution:  Give them the tools to do so.  In music, the big thing right now is around providing stems that the user can then use to edit and mix in new ways, thus taking a song like “Thriller” by Michael Jackson and giving it a whole new feel and sound.  The same can obviously be done with video content, appeasing the no doubt large group of aspiring filmmakers who would have liked to see a slightly different outcome for a certain character in “The Phantom Menace”.  Social interactivity is also a big play here with communication tools (chat, IM, tweeting) and multi-player gaming providing loads of new ways to achieve consumer satisfaction and value.

4. Consumers want a closer relationship with the artists/characters/celebrities that they love.

Solution:  Change the limits of the artist/fan relationship. Provide “experiential content” that supports the consumer’s desire for status and access.

• Access to a webcam focused on a band’s rehearsal space so they can see live feeds of them preparing for their next tour

• Access to a closed community message board where they can establish a direct communication line with their favourite artist

• A personally written birthday card from their favourite movie star

• The right to see a screening of a new film before anyone else and attend a special party afterwards

All of this can be provided to the consumer.  All of this can be monetised.  All of this can be considered content.  Much of this is can be made available for a low marginal cost, and while each one may only be valuable to a small targeted consumer group, it represents a load of potential revenue that is not currently being captured.

I’ll finish up with a personal example of how I think all of this comes together.  They just started filming “Wall Street 2”.  I loved the original – thought Gordon Gekko was one of the greatest characters of all time. So what kind of product would a “Wall Street” enthusiast such as me like to buy for the sequel??

• Access to behind-the-scenes content of the filming process

• Access to a live feed of what’s happening on set

• Video diary of the stars talking about the filming process

• Some backstory or specially-produced content that gives me an idea of the premise of the film and what’s been going on with Gordon Gekko since we last saw him

• A guaranteed ticket for the first showing of the film in London

• Some kind of high-end, limited edition video product when it comes out on DVD that includes both exclusive content and collectable memorabilia (a month before the official DVD release)

I may not want something like this often, but for the few artists/films/characters for which I do, my price sensitivity would be very low and the opportunity for the content owner to maximise my personal RPU would be very high.  And that is really the point…..product innovation is ultimately about getting the maximum amount of revenue out of each individual group of consumers no matter how big or how small they may be.

What do you think???


One Last Note:


I don’t want to minimise how incredibly difficult product innovation of this nature will be to accomplish (possibly a topic for another day).  Contractual talent obligations will have to be altered in order to allow for broader content creation and a greater level of artist/star involvement. Licensing standards and trusted best practices will have to change.  A company’s infrastructure will need to evolve in areas such as their financial management systems and digital supply chain.  New and old content will have to be organised, reformatted and digitised (no cheap task!) so it can be utilised in new ways.  However, the reality persists and something has to change.  The old media product will not satisfy on its own and while change is always difficult in the short-term, long term survival depends on content owners and media companies keeping up with consumer aspirations much more effectively than they have been.