The New DNA of Content

By Jim Singer
Partner
March 2010

We’ve all seen the exclusive photos of Brad Pitt and Angelina Jolie’s latest goodwill trip on the cover of People magazine, and 42 versions of Twilight series lunch boxes in department stores around the world. These are some of today’s most powerful brands—brands that provide the power behind a $1.8 trillion global media and entertainment industry built on selling celebrity gossip, fictional characters and mass-market dreams about overnight stardom. When the game is about selling inherently transient products in a market where competitive strategies can become obsolete before the next viral YouTube video, how do the winners win? What is the true value of content? And who gets to capture it?

Content is the lifeblood of this industry, which employs close to 1 million on-staff writers, editors, photographers, choreographers, cinematographers, producers,  performers, journalists, game designers and media technologists.  This doesn’t count the thousands of freelance and aspiring artists who send manuscripts, screenplays, demos and photographs to publishers, record labels, radio stations and film studios every year.

The digital age has eased this process. Whether editing page layouts or film footage, content creators can now do their jobs better and faster, exponentially increasing their ability to deliver content to consumers. It has also ignited an insatiable appetite for content in ways and markets previously thought unreachable.

Still, some of the most iconic content brands face an existential crisis—at odds with smaller, newer competitors and even their own consumers who are empowered by the ongoing technological revolution.

Traditional media entities continue to wrestle with a modern-day identity crisis: Should they compete directly with the legions of content creators in the marketplace? Or be conduits between creators and consumers—packagers, aggregators or portals, able to serve up specific content to targeted consumers while monetizing the “transaction value” instead of the content?  The pie is indeed growing, but so too are the possible slice sizes. Where should media companies position their knives?

The New Money Train

To understand the most lucrative areas of content management, we must first understand what drives content value in the first place, and how the rules may be changing.

The Subject. Relevant subjects will always capture the attention of consumers. The key in an era of instant gratification is in understanding what is relevant to whom and for how long. Story cycles are getting decidedly shorter. In the past 10 years, the number of days a top three feature story remains active has fallen by 23 percent. Yet there are more variants created around each story, driven largely by tweets, blogs and digital versions of magazine brands. Companies that remain ahead in this market are those able to serve relevant content quickly, uniquely and to precisely targeted consumers.

The Capture. A film score by composer James Horner captures more inherent value than the same score created by a lesser known composer. While most of this “value” is generated from the sheer quality of a Horner score, value is also derived from his name recognition—regardless of the quality. Because content is an “interpretive” product, there is an inextricable link between brand value of the creator and the content itself.

The Brand. As new media gives wings to new outlets—from blogs to social networking sites—the brand will always endure. Perhaps the best recent example of brand power occurred in the aftermath of Michael Jackson’s death. As blogs across the globe covered the singer’s sudden death in painstaking detail, TIME magazine’s special commemorative issue—priced at a 45 percent premium over its standard newsstand price—sold out in less than 24 hours. This happened despite otherwise declining revenues in publishing.

The Distribution. Underneath the content, capture and brand resides the technology that enables consumers to reach the content. Distribution qualities such as speed, access and the ability to hear consumer opinions and social network commentary all factor in. User-generated content, such as citizen paparazzi, blogs or independently created music or videos not only “democratize” content creation but also organically extend its traditional lifespan.

Reclaiming the Throne

There are additional questions around copyright issues and talent that must be addressed. Should there be a sliding scale pricing structure for content? Is it possible to negotiate fair market value for content “re-usability”? Do you buy and nurture your creative talent or purchase it on a freelance as-needed basis?

In the end, however, it is all about how media companies survive. As economic conditions continue to thwart industry dynamics, changes to the fundamental financial models have created an opportunity for media companies to rebalance their talent portfolios and reclaim their thrones. There are three major steps in the reclamation process:

Measure value. Take a good hard look at what consumers value. Value needs to be more than driving traffic or generating buzz. These are important metrics but if a media provider is unable to generate meaningful revenue, the model is fatally flawed.

Manage the pipeline. Talent is a fleeting and fragile asset, so it is unrealistic to think that media companies can identify and lock in future talent. Not unlike a sports team that places too much faith on talent scouts, the risk is too high and a wrong decision could be a crippling disadvantage.

Flex operations. A well-organized content company has the ability to transmit content seamlessly, regardless of channel. Consider how revenue potential for iconic content such as the Olympic Games has evolved. The challenge for NBC in 2010 was to execute the experience perfectly, across all channels.

Successful media companies of the future (and, potentially, the only ones to survive) will be those that understand and are positioned to address these challenges.

Jim Singer is a partner and co-leader of the consumer products and retail practice for North America. Based in the New York office, he can be reached at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

Kosha Gada and Greg Portell in our New York and Chicago offices, respectively, were instrumental in the development of this perspective.