Maybe you heard the news this week: Disney shares fell 9% upon reduced growth forecasts for its cable network division, the source of around 50% of its annual operating income.
Value dipped further on Thursday before stabilizing back to Wednesday’s low as the week closed. Meanwhile, an avalanche effect drove declines across media and elsewhere in the market. Quite a thing to see.
What’s surprising is this news should have not been a surprise to anyone. Digital broadcast has been changing as fast as the technologies emerging around it, but not everyone has opened their eyes.
Companies built upon legacy infrastructures – and attitudes – had to know long ago the changes were coming. But their commitment to the very systems that this week brought them down have locked them into unsustainable value props that are looking more and more at-risk as time goes on.
As analyst David Blank of RBC Capital Markets observed in the Times:
“There is almost an eeriness to this…The concern is when you look at five to 10 years out, you become less certain about the ecosystem.”
In much of media, innovation has been limited to “How can we use our existing systems in new ways?” Established companies have applied their traditional solutions to growth areas like live events and new content formats in response to the disruptive shifts – technology, original content – hoping to stay relevant amidst the groundswell of changes.
It’s understandable: large companies, particularly public ones, must navigate the unrelenting demands of quarterly earnings statements and answering to shareholders and Wall Street justifying short term financial performance. Unfortunately, often times these companies are forced to make decisions at the expense of innovation, and the result becomes what we saw in the market on Wednesday.
We saw this when we were first shaping the vision behind AerNow. At the track (our roots are in professional motorsports) we saw a decline in in-person attendance and fewer eyeballs engaged through traditional media, such as broadcast television. For the rights holders, the costs have gone up yet advertising dollars and sponsorship dollars are down. From around the world, and particularly in the younger generations, fans asked why they couldn’t follow the action and engage with everything that was happening during a race. The question was legitimate. After all, in an increasingly connected, multiscreen world, they knew that any barriers between them and the excitement of a race could be removed. Looking at the business models and entrenched processes of traditional broadcast, our founding team saw a way to rethink these barriers and reimagine a way to get not only racing, but all types of live event content into the world in a more meaningful and immersive manner.
The technologies on both sides of live events are changing. At the track, or on the festival grounds, in the stadium or even on the high school athletic field, technology is changing the experience. Biometrics, RFID, action cameras, even iPhones – all of these transform the live experience in real time. On the other side, mobile devices and other second or even third screens let users reimagine the social, interactive, and inherently user-driven experiences that enhance live experiences, whether in-venue or across the world.
But the disconnect between these two points inherently limited the quality of the connection between them – and that’s what got us thinking.
In the weeks to come we’ll share more about this vision. We’re putting it to the test at a range of events and with the brands we’re partnered with, proving there’s a new way to bring users and live events much closer together. We’ll also show a new way for rights holders, media companies, and everyone in the live event ecosystem to connect with audiences on their terms, with new relevance and engagement. We’ll also show these same parties how they can get the brands to participate at a new level to monetize the content they work so hard to create. As traditional media companies feel the burn of waning relevance, we’ll offer them – and anyone with live content to broadcast – an “Always Evolving” way to innovate, engage, and build new revenue streams.
As this week’s news shows, traditional media is paying the price for seeing emerging models as competitors and for looking backward, not forward, in their value proposition.
We’re here to change that – to offer a paradigm shift that complements their long-term business vision and lets them face their markets with a new level of innovation where both they and their audiences win.
Tailored to a new type of media consumer, built with business value at the core, and ready to connect audiences with a whole new level of live event engagement, we’re revving our engines. We can’t wait to share our fuller story – and its value to everyone in the media ecosystem – soon.