Happy New Year!

1) 2008 Crushed the Old Media, 2009 will see New Business Models

Two blog posts describe the destruction:

From Editor & Publisher 12/30/08: No Bull: 2008 — The Year Newspaper Stocks Collapsed (h/t Inquisitr )

The statistics behind the collapse of newspaper stocks in 2008 are sobering as New Year’s Eve approaches:

GateHouse, down 99.55% in this calendar year
McClatchy, down 93.6%
Lee Enterprises, down 97.3%
Journal Register Co., down 99.58%
Media General, down 92.47%
Gannett, down 80%

Oddly, the winner in the sector is the company being beat up the most in the financial press, The New York Times Co. (NYSE: NYT). Times stock is down 59% this year.

From Six Pixels of Separation 12/30/08: Mass Media – Mass Destruction – analyzing the recent poignant admissions of capitulation by mainstream media

The Rise of New Business Models?

Frankly, predicting new business models within the media industry is difficult with its complex web of content distribution relationships spanning theaters, international distribution, cable and satellite distribution. However, with the success of industry ratified models like Hulu and the sense of inevitability that content is destined towards freedom, 2009′s recession will force new media models into play because the old models aren’t working any more.

Business Week’s Steven Wildstrom notes that consumers can’t find many great old movies on DVD or online in this era of the long tail retailing.

The battle is between an industry that wants to tightly control who gets to see what when and customers who want to watch what they want wherever and whenever. This clash is slowly being resolved in favor of consumers. Movies are becoming available for download and on DVD more quickly after theatrical release. Director Steven Soderbergh has a deal with Mark Cuban’s Landmark Theatres and HDNet that allows some of his movies to be released on disk and online the same day they show up in theaters. I expect more movies to be launched this way.

The day you can choose to see a new movie in a theater, on your TV, on your laptop, or on your iPhone is still some time off, but it is coming.

2) Retail Crashes in 2009; Consumers Will Demand Online Presence

Consumers demand online presence for retailers, travel, cars, real estate… everything. Those who aren’t providing that presence (note Sears.com) are being dragged down by a low margin / high leverage bricks and mortar business model.

From CNN/Money 12/31/08: Thousands of Stores to Disappear in 2009. The recession will place a premium on new online business models that enhance profitability and scale more flexibly than physical retail systems (shipping by UPS is more scalable and profitable than the logistics of retail distribution and warehousing).

3) In Particular, Consumers Will Demand Corporate Social Media Presence

Zappos has proven that instituting multiple pathways for corporate communication and support, such as Web 2.0 apps like Twitter, is fueling its growth:

Zappos seems to have married the best of all these worlds: It has “excellent shipping options and also excellent customer support – online and on the phone. They often upgrade you to faster free shipping and are easily available to answer questions or complete returns.”

The key execution concept here is to move customer support into the frontline using real time online (and offline) applications, and not hide them behind a frustrating phone-tree ridden call center. Then give the support crew identities (435 Zappos employees have Twitter accounts ) so they can own their service quality and receive credit for building their online reputations. One company stands out to provide this kind of online third party customer support – GetSatisfaction.com. More will show up, I’m surprised the 24×7 overseas call center operations haven’t picked up on this.

4) The 2009 Recession will Elevate Social Media Marketing as a Corporate Cost Control Measure

Brand advertising has generally employed one-way messaging to consumers who typically respond to brand commercials as agenda-laden, or even spam. That’s why Tivo fast forwarding of ads is a value proposition. Brand advertising developed in the 1950′s with Madison Avenue’s recognition of the power of the new visual media to branding. It worked because broadcast TV was, at the time, the most optimal means to distribute the message.

Brand advertising is expensive because it employs the vertical professional services of advertising agencies – creative, research and production – to develop “campaigns”, and ad budgets for mass market placement. Social media in part threatens to disintermediate advertising professionals by leveraging “crowdsourcing” to test marketing and advertising concepts more quickly and cheaply.

From Umair Haque The Shrinking Advantage of Brands

But cheap interaction (pk: via the social media) turns the tables. The cheaper interaction gets, the more connected consumers can talk to each other – and the less time they have to spend listening to the often empty promises of firms.

In fact, when interaction is cheap, the very economic rationale for orthodox brands actually begins to implode: information about expected costs and benefits doesn’t have to be compressed into logos, slogans, ad-spots or column-inches – instead, consumers can debate and discuss expected costs and benefits in incredibly rich detail.

Corporations will begin to see that achieving good reviews and referrals from social grading systems like epinions, Facebook or Yelp are more effective and less costly marketing vehicles than ad campaigns.

5)  Consumers Won’t Buy Based on Week-Old News

Just as the internet has made the morning newspaper a digest of old news, Twitter and other micro-blogging applications are changing news digestion through minute-by-minute citizen broadcasting of breaking news and events. This amplification of news content is not data overload because the news is filtered by the user/reader who view through feedreaders, sites embedding RSS feeds, and special search criteria. Sites that track transactional data and news in real time – Marketwatch.com for stocks, Google Blogsearch for updated blog commentary, Search.Twitter for Twitter commentary – will be in demand.  Who is willing to purchase GM stock without checking the news? Who will buy a home during this period of economic instability based on month old National Association of Realtor reports? Real time reporting, done most efficiently by citizens (some with professional motivation like real estate agents), will provide value to consumers.

6) The Focus of News Will be Distribution over Creation

Before the Internet and citizen journalism, mainstream media owned the content it created (news, music and movies) and charged a lot for the consumption of that content. The social media now produces a lot of the online content and is disrupting the media industries by pushing the price for content consumption towards zero. Online news sources are now positioning themselves to be the most comprehansive “news re-sources” and in 2009 will start steering their readership to authoritative sources who generally will not be their own journalists. Well known respected bloggers and Twitterers will benefit from the exposure.

7) Discovery is the Killer App

Yelp on iPhone does it well. Go to any unknown city, and Yelp uses the iPhone GPS to find a well reviewed restaurant or nearest gas stand within seconds. The best new applicatons of 2009 will create discovery opportunities. Discovery is best facilitated by: 1) referrals from a social network, and 2) breaking news of actionable content, 3) new contextual search capabilities that deliver higher relevancy results than a typical search engine.

The ideal discovery app is an online clearinghouse system that leverages the aggregate social media to broadcast needs and wants. For example, when I want to sell my car, I would want to broadcast this fact once (on say Facebook) and have it distributed across numerous social networks matching “want to buy a car” queries, in particular those within a 30-mile radius. The match would track degrees of separation, similar to how LinkedIn connects two unrelated people with synergetic interests, and provide relevant and viable social connections between two parties.

8 ) The Question: “How does Facebook Help My Business?” is Finally Answered.

Facebook Connect, and its social network cousins Google Friend Connect, and the still obscure MySpace ID will facilitate the portability of social networks, or the “social graph”. This will be one of the most powerful applications towards creating a social media business model in 2009, but is hard to explain to social media newbies. What does it mean?

Through Facebook Connect, consumers log into other sites using their Facebook login details. Once inside the site, users can discuss or post their activities in real time to their Facebook network. The effect is to bring in their network of friends into the hosting site. For example, a teenage girl may visit a Facebook Connect – enabled retail fashion site like Forever 21, buy an awesome sweater at a deep discount sale price, and broadcast this fact to her large Facebook network. A few of her Facebook friends do the same thing, and by extension, you can imagine the instant viral marketing power of each new succeeding Facebook network put “into play” for a good sweater deal.

9) Social Capital is the New SEO

Developing a strong online reputation that the social media can point to is far more credible than a search engine referral. In fact, the more social capital one owns, the better the search rank anyway.

What is Social Capital? In most practical terms, it’s the measure of how powerful your social network is in referring business to you. As any social networking strategist will tell you, the best way to build social capital is to “link” and develop relationships with the social “hubs” – people that are also well connected.

Twinfluence, a Twitter analytics application, demonstrates how powerful Twitter’s reach can be:

• Reach is measured as the sum of the number of followers plus the number of second degree followers.
• Social capital is calculated by dividing the reach (6,960,480) by the # of followers (7,325), which estimates that each follower averages 915 followers themselves.

Twitter is a highly viral application that builds social capital quickly because Tweets are distributed and shared frequently, even up to the minute, compared to other media. Most Twitterers can confirm how often top Twitterer names like Guy Kawasaki appear because their second degree followers are conversing with or referring to Guy.

Quibblers will say what’s the use of 7,000,000 strangers within reach? Answer – this is ubiquitous consistent viral branding built on the same principles of 1950′s Madison Avenue – brand advertising simply makes you well known and easy to recall when potential clients have the need you can fulfill. Even better, Twitter’s branding provides a Web 2.0 social system of reputation management that unlike brand advertising, allows clients to confirm credibility.

10) The Ascendancy of the Social Media while Blogging Takes a Back Seat

Blogging used to be about creating content. Today’s mainstream blogs are about distributing content. The “blogs” now garnering much of the traffic – Huffington Post, Engadget, etc. – have become mass media digests.

It’s the portability of content that now matters. Online presence can be measured by where and how often your name and word show up across the Internet. The more entities distributing, reblogging and retweeting your content (including mass media publishers who use blog syndication services like Blogburst and Newstex), and the more services chronicling your activity/content (Friendfeed, Facebook, Flickr, Twitter, etc.) the more renowned you become. And that can lead directly to celebrity, position, or just a business break.

The blog is not dead, it still remains the foundation for commentary and expression. It is now a component of a more comprehensive social media strategy.

11) The Social Media and Cloud Collaboration Team Up to Create “Everyman” Applications

We all know ideas, business plans and startups ferment around water coolers. The leaders and hubs of the social media comprise a new virtual water cooler. 2008′s explosion of Twitter and Facebook API based applications demonstrate the ease of application development. Non-programmers can now develop low cost applications, and the social media water cooler will be instrumental in driving the ideas that build new businesses.

For example, Domus Consulting and a group of Bay Area real estate bloggers built Homescopes.com, a real estate marketing website devoted to breaking housing market news in Northern California, and are expanding its presence to 100 bloggers. Domus is helping other agent groups and brokerages to develop their own Homescopes-like properties, which can potentially develop into viable online assets.

The collaboration of geographically separated participants into a new venture or business is made easier by social networking and cloud collaboration tools. 2009 will bring in a wave of new “Everyman” applications.

12) If you liked this post, check out how these trends apply to a specific vertical – real estate – @ 10 Leading Trends in Real Estate for 2009 at Transparent Real Estate.