2006 Predictions
Berens: The kind of evolution that you would think would take decades to create has just all of a sudden materialized. It started with the video iPod. And, now Comcast and DirecTV are having paid VOD, as well as free VOD. It has been an astonishing time. And, so the reason I am prefacing this is that… it is a very difficult time to make predictions.
Schultz: Absolutely.
Berens: Since the next 12 months are looking to be another period of growth, opportunity, anxiety and confusion… and so, I am asking you to make predictions knowing that the ground is going to be shifting under your feet. But, if you had predictions to make for the next 12 months -- both on the plus side, and on the negative side -- what is the worst thing you think is going to happen by the end of 2006, and what is the best?
Schultz: Well, I think the worst thing that is going to happen between now and 2006, the end of 2006… it depends on whose pig is being gored. I think the content producers are really going to have to rethink how they make money.
Berens: You think interruptive advertising…
Schultz: Yes. An advertising supported, content distribution system, I think is highly questionable going forward. I don't think it will happen by the end of 2006. But, I think that whole system is under duress.
Berens: Do you think that consumers are going to pay for things that they want, and do you think that they are going to pay more?
Schultz: Yes, but, content distribution per se… In other words, I go out and I make a six session miniseries, and I go sell it to the networks, and the networks put the money upfront. And then, they figure they can go out and sell the advertising, that sort of thing. I don't think those things are going to work in the future. So, I think you have a lot of distribution challenges for that content.
Berens: And, how it is going to be distributed…
Schultz: Yes, that the content producer may essentially just sell it direct.
Berens: Well, that certainly is what… what the promise of internet protocol television is holding out.
Schultz: And, I think you could make a good case for that, that the content provider will look at it and say, "Gee, why do I need to go get somebody to sell it for me? Because the big money is going to be me selling it direct, plus the fact that I keep the residual value of this," and so on, and so on, and so on.
I think it puts the media organizations in a very delicate position, because as the advertiser base changes they don't have a way to generate any income or returns.
Berens: And, on the plus side? Do you see anything on the plus side?
Schultz: I think on the plus side, I think what it is going to do is it is going to make this probably the most interesting and innovative year, or 18 months, of our lives. Because I think what we are starting to see is -- and, I hate to use the word democracy, because it has been so badly used by our government -- but, I think what you are seeing is the democracy of content. And, that the consumer is truly going to drive what they want, when they want it, in the form they want it in.
Now, the question is this: do we have to invent a new system to make them aware of -- and to know what the availability is -- of this content? I don't know how that is going to happen, if the mass media disappear, or become less and less important. How do you advise consumers of content that is being created that they might be interested in?
Berens: I think it is easy enough to track the rise of all sorts of extremism, or conservatism, or fundamentalism, or liberalism, just the rise of views that are farther from the center to the explosion of media, because there is now less of a mass culture, and therefore fewer people know the same stuff as the rest of us.
Schultz: Right. And, that raises then the question of: "what is?" And, what does that do to society? Because I think there are huge social questions involved in all of this. If we lose our national communications systems -- the televisions -- I was reading some stuff yesterday about the newspapers… here is Knight Ridder, one of the most profitable newspaper chains…
Berens: Up for sale.
Schultz: Up for sale and just coming apart at the seams. Now, what does that do for society in terms of, "where do you get your information?" Do I have to spend all my time reading blogs? Is there no one that is going to summarize, or bring it all together, or give me an overview, or whatever it happens to be? If you look at it that way, then what happens to the sense of community that media has traditionally given? And, if that goes away…
Berens: Then what? One of my questions has always been, "Where is the money in it for the media concierge?" That is what Joe Uva of OMD called it at one of our events. How do the people who summarize make money, because right now a lot of people who are doing it are doing it for free? If you are a blogger, then maybe you can pay for your web hosting through some ads for your blog. But, mostly, you are doing it out of passion. But, if people are going to be aided and abetted not only in their media consumption but also in their cultural participation with media, then how do these people giving aid going to get paid?
Schultz: That and, "how do I find out about it?" I cannot spend my entire life surfing the net looking for this stuff. And nobody is going to drop it out of the sky. So, if I am a consumer looking for, or just interested in, or might be interested in content, then how do I find out about it? That is something that I don't think we have figured out, yet.
Berens: Certainly, all markets are becoming niche markets, right now. And, I think it has something to do with the growth of places like MySpace and the different sites where people are essentially all hanging out a shingle and saying, "Here I am." On one hand, that has been positive, because it does take the creation, and enjoyment and contemplation of our culture out of the hands of big media companies. On the other hand, it does mean that, increasingly, we are simply not going to know what other people are talking about.
Schultz: It is that, and, also is there then a national culture? Is it… if you have got a whole bunch of cats, then is there a cat culture?
Berens: Right.
Schultz: And, I don't know, because we have never had cats.
Berens: It is certainly going to be a very interesting time to watch.
Schultz: Yes. I think we are going to see a huge rise in communities. I don't think there is any question about that. I could make a case that we will become more communal, and that we will resemble more the Japanese or the Chinese systems than we do today.
Berens: The interesting thing by my way of thinking is that these communities may not be geographical in nature.
Schultz: No, not at all. And, that has been going on for 50 years. If you look now at who your network of friends and relations are, or friends and neighbors, they are not necessarily people who live near you. They are generally people who you work with, or are in proximity to during the day. And then, they all go off in 14 different directions and you don't even know who your neighbors are.
Berens: And, the growth of Instant Messenger means that I have people that I consider to be close friends who I may only have seen once or twice in my life.
Schultz: And, if you are like me and in the academic community… I have people I consider very close friends who I have never met in person. We do work on papers, and we send things back and forth and that sort of thing… but we have never physically been in contact… and we don't think anything of it.
Berens: Well, that is why God invented conferences.
Schultz: All true, all true. (Laughs.)
Berens: Well, Don, this has been wonderful. So, thank you.
Schultz: Terrific. Does that help you?
Berens: Absolutely, and I will email you the dates for our future Summits. We would certainly like to have you back. This would be for the Agencies. You spoke before the Brands before.
Schultz: Oh, God. Are they going to have enough money to come?
Berens: They will have enough money to come, and we'll make sure they check their tar and feathers at the door.
Brad Berens is executive editor for iMedia Communications.
