In the past, I've argued against the likelihood that Hollywood is going to be taken over by Silicon Valley.

My position is quite simple - there's a difference between content and distribution.

I believe that while the content business has been significantly impacted by technology and faces considerable challenges, at the end of the day, companies in the content business still occupy the position of power.

So it was with great interest that I read's recent article about MTV's new media strategy.

I've previously noted that "many technologists often seem ignorant to the fact that old media companies like Viacom and News Corp. are actually pretty darn savvy when it comes to new media."

Based on the direction MTV is taking, I think this is hard to dispute.

The initiatives MTV has implemented or will be implementing include:

  • Embeddable video players that enable users to post MTV's content on external sites.
  • High-definition online video.
  • A network of "highly-targeted" websites that are "loosely connected and focus mostly on programming such as VH1 Classic, Jackass, and Sucker Free on MTV" and that offer fans ways to interact with the content and each other (i.e. social networking).
  • A revamped digital music service.
  • Further investment in the video game market.
While this may not be groundbreaking stuff in and of itself and Charlene Li of my favourite research firm, Forrester Research, notes that MTV hasn't been aggressive in leveraging user-generated content, I think MTV's efforts highlight several key points:
  • Content is still king. MTV recognises that its most valuable asset is its content and that while it can leverage technology to better enable its viewers to engage with that content in beneficial ways, the content itself drives the creation of value for both the company and its viewers. Far too many technologists discount the value of content while overvaluing the role of technology in distributing it.
  • Major media companies are not inflexible and can adapt but they do operate a little more slowly by virtue of their size. Technologists often don't recognise that slow change is not the same as no change. Unlike the plethora of internet startups that produce no content of their own and often rely on the unlicensed, copyrighted content of others to build their businesses, media companies like MTV have to evaluate the ways that they can leverage new technology effectively to actually generate more tangible value from the content they own. To do anything else would be wasteful.
  • There is willingness on the part of major media companies to experiment and innovate. As noted, Viacom has provided funding and freedom that enables certain MTV units to operate in a more nimble, startup-like fashion. MTV has also set up an "assembly line" to develop new websites and has a plan in place to adapt and try again if newly launched websites don't take off. While I’m sure there are those who would criticise these efforts and question just how real they are, I personally don’t doubt that MTV is making a serious effort.

At the end of the day, I believe that MTV and other major media companies like News Corp. and Disney are taking practical, sensible approaches to new media.

An observer with a narrow perspective might mistake these types of approaches as dinosaur-like, but the truth is that, throughout history, technological change is rarely immediately embraced by incumbent players.

And for good reason: he who gets there first isn't always the last standing. He who takes a measured, smart approach and figures out the models that work typically does.

There will be many online video startups, for instance, that try to innovate in the content distribution space, but most will fail in part because distribution is more commoditised than good content.

Just because technology has created new content distribution platforms and these have posed challenges to the largest content creators does not mean that the content creators will not adapt and thrive.

It may take them a little bit longer than we would like, but I really have no doubt that the MTVs of the world actually do get it and are having success, primarily because they still produce the content that consumers want.

Many people - primarily technologists - just don't realise that and they're the ones who will eventually be "punk'd".

Drama 2.0

Published 19 February, 2008 by Drama 2.0

237 more posts from this author

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Comments (2)


Kaya PPC, Internet Marketing Manager at Optimised Media

Content is definitely king. Unfortunately I think they might have left it a bit late. Major media companies have been very slow in reacting. They will have an impact however the major brands on-line now have a very significant advantage and more important they know how to monetize. This is a risk to the smaller players out there but YouTube will control video & Apple will control music. I don't think the winner in the social networking sector has yet emerged, but News Corp couldn't make MySpace work.

Kaya, Optimised Media Internet Marketing

over 10 years ago

Drama 2.0

Drama 2.0, Chief Connoisseur at The Drama 2.0 Show

Kaya: please see:

In the realm of professional, licensed content, YouTube is being "locked out" of the game in many respects because it refused to deal fairly with content owners. This is hurting and will hurt the company. Most importantly, while YouTube is the leader in user-generated online video, this is not where the big money is flowing to in terms of advertiser dollars. As noted by Maven Networks VP Kristen Fergason, "Not a lot of advertisers are willing to throw their brand into that environment." YouTube may be the most popular online video service but it's not the one making the most money.

In terms of your reference to MySpace: while I question the long-term staying power of general social networks like MySpace, the reality is that MySpace is still by far the most popular social network in the world and News Corp. has monetized it more effectively than Facebook has monetized its service. Rupert bought it for $580m and then convinced Google to guarantee $900m in payments for advertising inventory. I'd say even if MySpace is irrelevant three years from now, he did quite alright.

The most important thing to recognize is that major media companies don't need to own the largest video sharing services or social networks to have new media success. Their success is measured by how effectively they can adapt and leverage new technologies to drive the creation of more value using their content. In other words, online video and social networks are simply new tools that give them new opportunities. Standalone companies on the other hand, like YouTube and Facebook, need to prove that they can actually turn these tools into standalone viable businesses. That, in my opinion, is a much harder task.

over 10 years ago

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