The world of media has changed radically over the past 15 years. It’s expanded in scale and scope and has gone digital, mobile and social. And it’s gotten a hell of lot more complex. Traditional lines of separation between publisher, application developer and technology provider have blurred. The other day, I told my cab driver I ran a digital media company, ‘If it isn’t hardware, it’s media.’ I don’t think he was too far off.
So what’s a digital media company? How do you define companies like Amazon, LinkedIn, Salesforce, Comcast or even Google? Amazon hosts many of my company’s servers, delivers digital content, and sells sponsored advertising within its e-commerce platform. Comcast wants to provide me a video feed to monitor my home as well as deliver content. LinkedIn sends me articles. Salesforce aggregates apps and sells data. And Google is, well, Google.
In the online space, it used to be that being a media company meant you had to be a dotcom. You had a portal or, if you were really lucky like me, a ‘vortal’ (vertical portal). You created content, you marketed your site, you built a base of users and you grew your business through advertising. You competed with and tried to displace traditional media companies like print publishers or television broadcasters. Now, as lines continue to blur, it takes a lot more to build a successful online company.
Building a Successful Digital Media Company
With the growth of mobile and the increasing importance of social media, what used to be online media has been transformed into digital media. We’re in a period of rapid change. Social media and mobile usage have decreased the barriers of entry for customer engagement. Technology costs to launch sites and products are lower. The number of players competing for eyeballs is increasing. With the resulting downward trend in CPMs, it’s important for companies to monetize customers in a number of different ways.
I believe that online businesses can no longer be narrowly defined as businesses which just sell advertising or create and distribute content. Companies should aim to extend their business models to encompass a wide range of functions, from traditional content delivery to mobile applications to social to e-commerce.
Definition of a Digital Media Company: The definition of ‘Digital media’ is digitized content that can be transmitted over the internet or computer networks, including text, audio, vide, and graphics. However, it is important to understand that a true digital media company is one that develops and delivers both content and functionality as defined as text, video, graphics, code and applications to customers across all electronic media, from online to mobile.
But what does that mean? On the surface, my company runs content-driven websites. We’re an online publisher, but we also provide SaaS-based technology for organizations. We’re big into social media and creating social networking tools. Over the past 10 years we’ve gone from being a dotcom to a portal business to a web publisher and then an online media company. We’re now a digital media company because we offer SaaS-based technology solutions and develop apps and online tools in addition to being an online publisher.
For us, it has been critical to our evolution and success as a company that we haven’t conformed to how the industry ’defines us’ (such as solely a content or traffic aggregator). We have evolved with the trends as a platform by adding multiple products and multiple distribution channels and customer touch points:
2007 – Product research, market research (PoliceOne – Body Armor)
2009 – Government grant assistance (FireGrantsHelp.com)
2010 – Mobile, social (FireRescue1 Facebook)
2011 – Online training and records management (PoliceOne Academy)
2013 – Lead generation and qualification (In Progress)
Why is this important?
Traditional media companies – whether they be newspaper companies, magazines, TV broadcasters or even content-focused online publishers – are really good at building a highly targeted or qualified base of customers, viewers or readers through an established channel to distribute content. Traditional software companies like Oracle or Intuit are exceptional at creating new technologies and building products that solve problems for both consumers and businesses.
Digital media companies need to do both. With the proliferation of channels to reach potential customers and declining CPMs, it’s no longer enough to just have the channel or the content; you also need the solutions. Google’s move into mobile with Android is a case in point. Bottom line is that in the digital economy:
1. If advertising is your only focus, you’re dead.
2. If you only create software or hardware, you better be really specialized or really good.
Digital media is about solving business problems. It’s about aggregating a network, building a platform with multiple digital distribution channels and solving real life problems. In terms of business models, it’s about multiple points of monetization and maximizing revenue per user or customer. It’s also what makes creating and running viable digital media companies so difficult and at the same time so thrilling. Stay tuned.