Steve Wildman is right, of course, about the economic logic of servers versus channels and storage versus programming. But media companies that forget they are communicators, that try to operate by economic logic alone, are doomed.
The shift from programming channels to storing stuff on servers is analogous to the shift from being in the communication business to being in retail, or wholesale, or just warehousing. The relationship with the audience member goes away and the media business becomes just a supplier of things people choose—it might as well be Sears.
The penny press was programming, not story storage. Top 40 radio was programming, not juke boxes. Even silly stuff like NBC's "must see TV" Thursday night line up some years ago, worked because it was programming that pulled audiences in and held them, it gave them something to anticipate before they watched it and something to talk about after—it created an event in the everyday flow of their life.
The greatest successes in media businesses are always based on communication innovations, on programming that attracts and holds audience members because it draws them into a communicative relationship.
That's what media managers ought to be thinking about today - the logic of communication. Be successful at that, and the money will follow.
Eric co-authored a seminal article in the field of media economics when he was a master’s student at Ohio State. There was a very nice moment at the conference when he and lead author John Dimmick were together again.
Dimmick (r) & Rothenbuhler (l) at the conference. In 1984 they published "The Theory of the Niche: Quantifying Competition Among Media Industries," Journal of Communication, 34(1), 103-119.