Thursday, April 24, 2008

DigitalNow 2008 - Day 1, Opening Session

Notes from Chris Anderson's Opening Keynote at DigitalNow 2008

Associations need to be able to deliver value through segmentation. Taking information/data and connecting it to individual people. Providing context to individuals is so important and must be a core proposition to associations.

Want to frame the overall shifts in our generations. We are all impacted by these shifts.

Main stream culture in 1935: radio was the new economy-was near zero marginal costs for each additional viewer! The economical cost was there was only a limited amount of stations. From this evolved mass marketing. We actually built “prime time” and created a synchronized culture. From radio into TV this remained static. Then in March 21, 2000, the In Sync album was the best selling album of all time. It sold 10 million albums. It was the pinnacle of mass media……everyone wanted this album and it was a real blockbuster. From that point, the number of top selling albums has decreased every year. This “blockbuster” album scenario will never happen again. However, more music is being released and played than ever before. There is just no “blockbuster” mass media now. There are now just thousands and thousands of small niche musicians and music all with downloadable music. There are now more channels on TV/radio so the number of choices has massively increased.

Even YouTube is in on this distribution. The choices are very broad. There is no mass media marketplace any more. The ratings of the number one TV show have declined ever since the 1950’s because there are more and more choices. “I Love Lucy” had 70% of the market in the 1950’s. “American Idol” - the #1 show today in America - gets only about 10% of the market. Most of us grew up in the era of the bell curve… it was all about the average in the 20th Century Market. We were really a mono-distribution system. Now in this 21st generation there is no such thing as the average consumer. There are just too many choices. We are now in a free distribution system with the Internet. We are finding out exactly what people want.

Wal-Mart is the largest music distributor in the world. NetFlix: $100,000 million in sales. There are really two markets… the traditional retail market and the niche market which can really be anything that is of interest to you. If we aggregate all these niche markets, we can actually engage all these into a long tail.If you can lower the cost of distribution and expand the market, you can really be successful.

In applying this to associations, what does this mean? Associations must focus on niche markets. They are appealing to very specific needs of a certain group. Within each association there is the traditional distribution of services and goods, traditional fund raising events, traditional organizational structures. With the Internet, associations now have a much broader and much less expensive distribution now… the “long tail” of the community of the association.

Links from one site to another is a prefect example of the long tail of media now and how associations can be impacted by it. Individual bloggers are a huge shift in the forms of influence now. They can really influence the niche and really are taking on the traditional media sources and winning the attention of the media market. YouTube is another prime example of the long tail of the media market. FaceBook is another part of the long tail… content aggregators, online communities are all other parts of this long tail. With the online version of Wired, they are using the long tail to get inside the reader and learn from them. They are even allowing the reader to edit content (ala Wikipedia) They can go from the broad market, the traditional distribution to the long tail using amateurs to create content.

Anheiser Busch created the long tail of beer. In 1997 they offered all their traditional beers… Bud, Bud Light, etc. Now they are producing a wide variety of beers from microbreweries, creating niche-based beers- even gluten-free to meet the needs of all those with Celiac disease, they are trying to appeal to a very broad niche marketplace.The food market has a very long tail now too. Coffee in particular and all that goes with coffee has a very long tail in the marketplace along with bottled water, chocolate, etc. There is a choice for every taste.

The long tail also appeals to those with extremely particular tastes in wine. Even the travel industry is doing it. Moving away from London, Paris, NY and offering vacations to tiny unknown towns and regions for those who are not looking at the traditional destinations. Converse even sells a vegetarian sneaker.Being able to target the long tail is critical to the success of any organization.

Stay tuned to the DigitalNow blog for video from Chris' keynote, and other valuable summit content throughout the week.

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