The Digital Tsunami

Look at the latest moves by Amazon, Apple, and USA TODAY, all reported in the past week. They have a commonality that suggests traditional communications are being swept away by a digital tsunami of historic proportions.

Amazon is readying a web-based subscription service that will deliver content via a web browser or through new televisions with Internet connections, according to a report in the Wall Street Journal. It will rival Netflix, the movie rental company that is increasingly moving its DVD mail order business to digital delivery.

Amazon would like to have the new service available by the holiday season, but it will depend on whether companies such as NBC Universal, News Corp., Time Warner, and Viacom agree to provide content. Amazon already sells individual television episodes, and it sells and rents digital movie downloads, but the subscription service would be a first for the leading online retailer.

Amazon has also been an early innovator in the e-book market with its Kindle e-book reader, which is now available in WiFi and 3G models. By the end of this year, according to Forrester Research, over 10 million people in the U.S. will own e-book readers and buy about 100 million e-books. Last year, under 4 million e-book readers and about 30 million e-books were sold.

Amazon has managed to transition its online business from once being a seller of traditional books to, today, being an all-purpose online superstore. With its digital initiatives, it looks like Amazon will again reinvent itself.

At the same time as the Amazon subscription service report surfaced, Apple unveiled an upgrade to its “Apple TV” device. The smaller $99 set-top device offers a lot more content – “the largest online selection of HDTV show episodes to rent from ABC, ABC Family, Fox, Disney Channel and BBC America for just 99 cents,” according to Apple. The device also streams content from Apple’s MobileMe service, Flickr, Netflix and YouTube. Not unlike Amazon, Apple sees the burgeoning opportunity in digital content delivery.

And now Apple is entering the social networking space with Ping, an iTunes add-on. The new service allows users to follow friends and see the music they have purchased, as well as music they’ve reviewed or concerts they attended.

Sound familiar? It should – think of MySpace, which has gravitated towards music in recent years, or Pandora and Zune Social. Apple is now squarely in the music-related social media game, and it could be meaningful. According to the New York Times:

“While other social networks have struggled in the shadow of Facebook, some analysts said that Apple had a chance to turn Ping into a success. The service will be instantly available to 160 million iTunes users, as long as they download the latest version of the software…”

Meanwhile, USA TODAY recently announced a major restructuring that basically acknowledges what we’ve discussed for some time on ReveNews that, in order to survive, newspapers must reinvent themselves into digital publications. The newspaper will reorganize its operations around “content rings,” consolidate and lay off staff, look into new licensing and business opportunities, and most importantly, focus the majority of its attention on providing web-based and mobile content.

The decision by USA TODAY is not particularly surprising, given the fact that print newspapers have been desperately seeking ways to maintain their circulation and protect profits, in light of being undercut by the wealth of free news and information available on the Internet. Some newspapers have gone out of business, while others, like Seattle’s Post-Intelligencer, have gone all digital. Only a few, most notably the Wall Street Journal, have been able to launch successful paid subscription online editions while maintaining their print operations.

 

 

The USA TODAY announcement signals that Gannett, which owns 82 daily newspapers and 850 non-daily publications in addition to USA TODAY, is on the verge of throwing in the towel on print publications. (Gannett also owns 130 websites, 23 television stations, and Captivate, a service that delivers news, information, and ads to nearly 7,000 elevator screens).

Digital delivery of every kind of content has now reached mainstream importance. Taken together, these developments are strong evidence that we’ve been engulfed by a digital tsunami.

About Barry Silverstein

Barry Silverstein is a freelance writer/marketing consultant. In addition to writing for ReveNews, he is a contributing writer to Brandchannel.com, the world’s leading online branding forum. He is the author of three marketing books, The Breakaway Brand (co-author, McGraw-Hill, 2005), Business-to-Business Internet Marketing (Maximum Press, 2003) and Internet Marketing for Technology Companies (Maximum Press, 2003). Barry ran his own Internet and direct marketing agency for twenty years. You can find Barry on Twitter @bdsilv.

  • http://www.inmedia.com/ Alexandra Reid

    It seems like just yesterday when I was in elementary school learning the fundamentals of language on an overhead projector. Now, working as a community manager, I am engulfed in the digital world of social media on a daily basis. It is true that companies of all sizes are feeling the demand to convert to digital, but is something being destroyed here as the word "tsunami" would imply? Through the digitization of everything from books to banking to entire conversations, I feel I have benefitted. After all, I wouldn’t have read this post if not for its digital format, nor would I be able to communicate with you about it.

    • bdsilv

      Great comment, Alexandra. I think most readers here would agree that the digital age has made all sorts of information and capabilities more available to us, and that's a good thing. But I did use the word "tsunami" to indicate that we are being deluged with digital media which has good and bad implications. As with any newly adopted way of doing things, it does mean leaving behind the old and, I suppose, destroying old methods of communicating to some extent. For some, this may be hard to do. I, for one, still don't enjoy reading an entire book on an e-reader, at least not yet; I admit I still like to turn "real" pages. On the other hand, I've given up newspapers in favor of online news… and I have to agree that the interactive nature of the digital era is one of its strongest selling points.

  • http://gregsanders.posterous.com Greg Sanders

    Barry – I think you nailed it 'tsunami' is the right metaphor in that the old media landscape is being washed away. We have glimmerings of what the new media land will look like, but it's still very much in creation mode. As someone who loves daily newspapers, I think Barry is right, the USA Today restructuring signals the end. As a jobseeker myself, I feel wretched when I hear about people losing their jobs. But I sense that the upheaval is picking up speed. Somehow we'll look back in a few years and say wasn't it so clear all of this was going to happen. But it feels far different when the wave is breaking and you're staring up a wall of water.

  • Pat Grady

    I saw Virgin's new unlimited MiFi mobile data plan this morning and had that same kind tsunami thought. The idea of my own affordable, portable, speedy WiFi hotspot got me to thinking about how silly the affiliate state tax thing is… What state borders? What office location? Also got me thinking about the places I might work… it's possible for me to be a real hobo… a drifter… a vagabond… shit, maybe even a pirate!

    • bdsilv

      Actually, Pat, the whole idea of digital availability anywhere does exactly that — makes it possible for anyone, in theory, to go anywhere and, for that matter, work anywhere (if self-employed or employed by an enlightened boss). So yeah, go be a pirate…

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