The 'titans are going to clash' in the technology and media world
Issei Kato/Reuters
You get more access to content and have the ability to see it across different platforms at different times.
It's not necessarily great to be a producer of media, however. Traditional cable companies have seen a huge amount of value shift to tech companies, which are distributing their content and in many cases taking their ad dollars.
Goldman Sachs' latest podcast takes a look at this tension, with Michael Ronen and Dave Dase, who work in Goldman Sachs' technology, media and telecom group, discussing the shifting dynamics at play.
Here is Ronen on the tension between traditional media and tech companies:
"The media companies are saying, 'You're using our media, using our content that we've paid a lot of money to develop, and you're monetizing it with advertising dollars that we see a very small portion of.' So, the traditional model for a media and a telecom company to monetize the big risks that they're taking on content has been disrupted. And there's a lot of tension around that."
He cited YouTube, "an $80 billion company inside Google" that is "building an in-house content powerhouse." He also mentioned Amazon and Netflix. He added:
"The interesting thing to watch is the titans are going to clash in different parts of the ecosystem in trying to build ... a really compelling consumer offering that will give you what you want, where you want it and kind of the pieces that you care about the most quickly. And whoever is able to do that in a cost effective way will be the winner."
Many traditional media companies are rolling out more content amid the mobile boom, but they're losing eyeballs to social media platforms like Facebook and Snapchat. They have to figure out how to utilize those distribution channels without losing sight of monetizing that content.
At the same time, younger consumers who like short, live content featuring celebrities and sports star are driving a shift in demand, according to the podcast. Here is Ronen again:
"That content is becoming incredibly valuable. And if it can become proprietary through specific sports rights, specific news rights, specific niches of content, that will become more and more valuable. And ... be coveted by not just the traditional media companies, but by the online players as well as the wireless guys. We've had a ten-year run of differentiating the wireless offering by megabits per second and number of voice minutes. We're coming into a period of time, in the next five to ten years, where you differentiate a wireless service by the content you get bundled into that wireless service."
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