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As the line between the creators and consumers of content blur, media outfits need to rethink old business models to respond to new realities, says a recently published study.
An entirely new generation of consumers is using technology to produce their own content, and media organizations need to recognize and respond appropriately to that trend, according to a survey released by KPMG International, a global business advisory and auditing firm.
The study calls this new breed of user-producers Generation Y. These children of post-war baby boomers have become "technology's latest gatekeepers" by harnessing the power of Web 2.0 , says the study titled The Impact of Digitization – a generation apart.
Web 2.0 refers to a perceived second generation of Web-based services – such as social networking sites, wikis and folksonomies—that emphasize online collaboration and sharing among users.
"The reign of the geek as gatekeeper is over, and the gate-keeping role is now in the hands of an entire generation," said Bernard Salt, partner at KPMG's Australian division.
The KPMG study urges media companies to "spend less time trying to find blockbusters and more time trying to make it easier for consumers to find stuff that interests them, however arcane."
KPMG commissioned Omnibus Co., a Los Angeles-based online market research firm, to interview 3,000 people in Germany, Spain, Britain, the Netherlands and the U.S. The company queried individuals aged 18-30 as well as baby boomers to find out how consumers react to technological changes.
It identified four key online trends that are heavily influencing the media industry:
• The decline in media distribution costs as a result of digitization and broadband availability
• The rise of user-generated content or "participatory media", exemplified by such successes as MySpace and YouTube
• The rise of sharing and collaborative tools
• The switch from a hierarchical, to a mass-based information organization and distribution model
"The current iteration of Internet-based services has turned information distribution upside down," says Stefan Dubowski, managing editor for Canadian telecom research at Ottawa-based Decima Reports. Traditionally, Dubowski said, content trickled down from the experts to the consumers. In the Web 2.0 world, it's the experts and enterprises that now depend on consumers for information, he said.
These views are echoed by KPMG's Salt. "YouTube, Google, MSN and SMS," he said, "are both the currency and conversation of Generation Y."
He said today's youth can also be the channel through which modern, popular media reaches the older generation.
While the television remains the primary news source for all age groups and geographies, youth groups are showing a shift in preferences.
The KPMG survey found Dutch and Germans over 45 are likely to turn to newspapers as their primary source of news; by contrast, newspapers are the last choice for Americans aged 18–34.
Generation Y consumers rely heavily on the Internet as a news source with Spanish speaking youth showing the strongest preference.
The radio is more likely to be held as a primary news source by people aged 65 and above.
On the edgier side of the media, social networking Web sites drew participation from around 30 per cent of respondents in the 18-24 age group, in all locations. In the U.S., 52 per cent of those belonging to this age group participate in social networking sites.
A key news source in Spain, for instance, is "pasalo" (the short message service or SMS), according to Rocio Campos Martinez, KPMG partner in Spain. The communal characteristic of this model is "significant for a public allegedly alienated from politics."
Various specifies of social tagging are also becoming popular and today, photo sharing sites, such as Flickr, enable users to "tag" photos rather than employ researchers to do the task, said KPMG. Another example of the power of voluntary collaboration in del.icio.us, a social booking site that enables users to determine how others are following the same areas of interest.
KPMG advises media companies to take note of these changes and incorporate user generated content in their offerings. For instance, newspapers columnists can write blogs to which readers can respond.
Another alternative is to "make content richer and more analytical" just as the Wall Street Journal did with it's re-launch this year, KPMG said.
Dubowski said quite a number of enterprises have resorted to using methods such as blogs to get their corporate messages across to consumers.
"Jonathan Swartz, president of Sun Microsystems has been pretty successful in using his blog," Dubowski said.
In the area of journalism, Dubowski also pointed to the rise of such channels as Orato.com. The Canadian-based news Web site uses citizen-generated content that emphasizes a first-hand account view of events to fill its pages.
For instance in the ongoing Picton trial involving the serial murders of prostitutes in Vancouver, Orato.com sent former prostitutes to cover the event.
With almost everyone having the opportunity to create content, is there a lot of worthless stuff being generated?
"Certainly," says KPMG.
"Many peer-produced sites contain large amounts of rubbish. But some sites have considerable impact." Dubowski agrees saying Web 2.0 can function as a double-edged sword. It can mean "a new path for information" as well as lead people to "question the validity of the content available."
The cheaper and greater volume of information you get, the more difficult it is to sift through the data and determine what is useful and truthful, he said.
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