How traditional vs. new media process differences impact the business

Over the summer I posted on "5 differences in publishing print and digital courses". That post was inspired by the 2011 mLearning conference and was really about how differences in print/digital product features affect the publishing process. In this post I'd like to consider how differences in the print/digital development processes affect the business model. However, it's not simply print vs. digital, it's traditional vs. new media-- the point is that more than just the products have changed, at least for the successful!

If I have to summarize, I would say the big difference is social.That includes "social networks" but I mean social more in the sense of "interactive" products and "interested" organizations.

Traditional media crafts a final unitary masterpiece and then gives it in discrete transactions, returning only years later for a new edition. New Media in contrast considers how customers use the product, listens for customer opinion, and ultimately forges an enduring relationship through service provision. First, a table of different stages in the development process, and how they differ for print vs. digital:

Conceptual focus: The differences start from the very beginning. Traditional media are largely broadcast (this includes print publishing) and therefore only content matters-- the product is a standardized widget pushed at homogenized consumers. But new media are fluid and customers are users, not just consumers. Therefore what can be done with the product now matters. Media = content + features.

Managing assets: Once the work begins, we find that business as usual continues to be a poor fit. When creating traditional media, assets are managed by being stored safely, so that they are later ready for reprint. But new media are part of remix culture and assets must go into a library so that they can be pulled for complimentary works. The unit of analysis changes too-- audio tracks for a traditional course get archived at the unit of disc. But with new media, each track should be named with a mnemonic that unpacks into its provenance, because at any time one track may be peeled away and placed into another product's asset store.

Project governance: Just as assets must be governed differently, so must the workers. Traditional media is created by the signoff form-- a firm decides what to publish and then it gets made and authorized management give their approval at specified "gates". This approach is a luxury of "traditional" or, rather, a symptom of fossilization. New media are new! There is (thankfully) not yet a priesthood whose "experience" trumps all, and who can predictably name what will and won't be a hit. Also, contemporary organizations are simply too lean to afford a class who does nothing but pass judgement. Therefore process documentation and resultant empowerment of employees should rule.

Outsourcing: Both traditional and new media are too complicated, specialized, and labor intensive to produce wholly within a vertically integrated firm. Organizations have to collaborate. But in traditional media this is done only through freelancing-- all collaboration is cast as work for hire, all input is subservient to the firm. New Media use freelancers but also benefit from collaboration-- drafts may be revealed for public comment and near-cancelled products can be kept alive by market interest.

Testing: The changes in outsourcing affect product trialling and testing. Traditional media buy donuts and corral focus groups. Traditional media hires firms to do compatibility testing. New Media firms review comments on third party social networks like Facebook and Twitter. New Media firms release public betas and then pay attention through analytics.

Finding scale: Traditional is concerned with how much each unit costs. As we'll see below, units are the only concern of traditional value. But New Media products are social in that they are network based. Therefore efficiencies are not found just in materials but also in wider use. Traditional media actually loses value as it becomes widespread-- scarcity creates value. New Media are opposite-- use creates value. (This is not necessarily new and in some ways broadcast media are regressive. Unlike TVs, telephones and telegraphs became more valuable as they became widespread.)

Product launch: This can be wholly characterized by the difference in efficiencies. Traditional media is obsessed with maufacturing, therefore the released product must be perfect. Reprint corrections cost too much! But New Media is social, conversational. Therefore Google's tremendous success with the "perpetual beta". New Media must not launch perfect, they must launch useful and then iterate rapidly. Sadly, no wrap parties for new media.

Investment review: This is an area that particularly seems to elude traditional media veterans. Predictably, a large component of investment review on traditional media is the Unit Manufacturing Cost. But for software, this doesn't hold. In fact there is a software network effect-- each copy is nearly free to create, so margins increase on every sale. Therefore software platform development (and most good application development is actually platform development-- APIs, libraries of components) introduces an amortization element.

Value creation: Of course, we are discussing business. And here is where the biggest difference comes, value creation. Traditional media is selling products in discrete transactions. Buy one book, buy the next, you might as well be getting hamburgers at McDonalds for all the continuity a traditional retailer offers. Same thing for ad impressions in a TV show-- there is no relationship, no continuity that affects cost or value. Conversely New Media is all about the relationship. The product, say Farmville, may be free. But the services, magic seeds and fancy avatars, are what cost. There are companies that get this-- it was a major theme at the 2010 IGEP conference, for one. Netflix's genius was in part building on this-- they don't just want you to receive movies, they need to know how you enjoyed them.

Evaluating success: That difference in value creation of course affects how success is measured. In traditional media, success is all sales figures. Who cares if the DVD was watched, so long as it was bought! But New Media does care, needs to care, because it's about services. Therefore we have digital product analytics and concern for 3rd party forums.

It may be fair to say that the above is a bit unfair to traditional media, that it oversimplifies. But the fact remains, traditional media is founded on broadcasting content as widely as possible, within tight controls, for as little as possible to an audience percieved as homogenous "eyeballs". New Media is about distributing service-enabled content as part of a relationship with consumers that becomes more valuable through widespread use. Traditional profits go up as traditional sales units increase, but the individual value of the units remains constant. New Media profits and individual unit values both increase with increases in distribution.