John Battelle, author of The Search, offers an interesting analysis of recent wobbles in Big Media land, attempting to understand the realities that led to a number of high profile departures from giants such as TimeWarner, NewsCorp and CBS.

After some analysis, John proposes that;

“There are two major forms of media these days. There is Packaged Goods Media, in which ‘content’ is produced and packaged, then sent through traditional distribution channels like cable, newsstand, mail, and even the Internet. Remember when nearly every major media mogul claimed that the Internet was simply one more media distribution channel? They were right, but only in so far as it pertains to Packaged Goods Media. Over the past few decades, massive media conglomerates have built on the deep DNA of Packaged Goods Media.

The second major form of media, is far newer, and far less established. I’ve come to call it Conversational Media, though I also like to call it Performance Media. This is the kind of media that has been labeled, somewhat hastily and often derisively, as ‘User Generated Content,’ ‘Social Media,’ or ‘Consumer Content.’ And while the major media companies are unparalleled when it comes to running companies that live in the Packaged Goods Media world, running major companies in the Conversational Media field require quite a different set of skills, and consideration of radically different economic and business models - models which, to be perfectly frank, conflict directly with the models which support and protect Packaged Goods Media-based companies.

It seems clear to me that the folks now charged with running the interactive assets of NBC, Viacom, Time Warner, and Newscorp - four of the largest Packaged Goods media companies in the world - are charged not only with growing their own Conversational Media assets, but also with protecting the Packaged Goods Media assets of their bosses. And those assets are based on several heretofore unassailable pillars:

1. Ownership or control of Intellectual Property by the corporation.

2. Ownership or control of expensive distribution networks.

3. Established business models based on highly evolved approaches to advertising and subscription models.

Each of these three pillars - and I may stumble upon others as I keep thinking out loud - seem to be either irrelevant or significantly shifted in the world of Conversational Media.”

Some of the words are used differently, and some of the emphasis may need tweaking to wholly fit, but much of this argument applies to the e-problems with which we see libraries grappling today, too. The business models simply don’t work anymore, but hopefully we don’t need change as dramatic as that seen at these big commercial organisations before libraries are able to adapt and grow.

In the comments, Fred Von Lohman (twice!) or Gary Price (clearly John’s having problems with his comment software…) make important points, citing that much-loved occupant of the Talis book shelf, The Innovator’s Dilemma;

“For important clues regarding the answers to the questions you raise, I’d encourage you to (re?)read Clayton Christensen’s best-sellers The Innovator’s Dilemma (perhaps better yet, his follow-on, The Innovator’s Solution).

These books make a compelling case that industry incumbents generally cannot effectively adopt disruptive innovations (defined as innovations that either cater to new markets or the low end of existing markets). This stems from the institutional incentives that incumbent companies face, suggesting that swapping executives is not an effective solution.

The only effective solution? Create separate entities that are entitled to compete with the parent - something none of these media companies has been prepared to do yet.

The rise of Conversational Media fits almost all the characteristics of a disruptive innovation as defined in Christensen’s research. I think that means Google is going to eat their lunch.”

What do the rest of you think? Do you see the parallels, and do you see the way forward?

Technorati Tags: Participation, battelle, Talis, Web 2.0

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