How Do You Value Content?

When Channel 4's boss, Andy Duncan, writes in the FT, ‘The future must be about maximising the value of our content,’ he undoubtedly speaks for media executives around the planet.  So what’s the problem?  Why has the value of content suddenly become so newsworthy?  The answer lies in the media ratings industry and the challenges it faces from the web and digital technology.  Ratings in traditional media are vital as they allow the commercial world to work out what content they should be backing with their marketing bucks.  For example Nielsen's Television Ratings, the mother of all such services, which has reported on the TV viewing habits of 9,000 American households for more than sixty years, determines the destiny of $25bn of advertisers' cash annually.  Here in the UK the same job is done by BARB, which monitors televisual preferences in 5,100 homes.  Both are centralised systems that extrapolate trends from a relatively small group of individuals and use them to create a commercial marketplace, in which C4 and others have been able to operate successfully for many years.  However, as Duncan’s quote suggests, this marketplace is now under pressure because advertisers question the value of ratings services which have struggled to keep up with the web.  Or as one grand media fromage memorably told me: 'We know the bike is broken but it's the only one we've got.'  The difficulties arise because the concept of ‘ratings’ is very different online.  The goal is still to judge the value of content but the similarities stop there.  Online ratings services normally refer to...

...an open system where an unlimited number of people vote on content, however serious, however personal, to assign some value and raise the best above the cacophony of the mainstream web.  But the aims of the people participating in such systems are not commercial.  They are there to express opinion, exchange views, swap tips, garner some kudos or one of many other social aims.  Call it the share-and-compare economy, where people share items with their online social networks and compare what they are offered back.

Digg is probably the largest example of such a social ratings marketplace.  It's based on a simple voting engine that allows users to ‘digg’ content up or ‘bury’ it below.  Such is its success that some webmasters fear being featured on the site in case their technology buckles under the pressure of attention.  This is known as The Digg Effect and is created by the site’s massive subscriber base all arriving at the door of your website simultaneously. It has been estimated that the Digg front page alone originates 54,000 clicks per hour or 1.3M clicks per day.  Each one an online rating.

That's not to say 'online good, offline bad'.  Both have their blind spots.  Traditional ratings systems still employ methods that sound hopelessly outdated, such as the two million paper diaries Nielsen uses every year, into which respondents manually describe their viewing habits.  But if the problem offline is plenty of business models but not enough viewers, online the reverse is true.  There are plenty of 'funny numbers' in online video and other web media which go unchecked, as Jim Louderback succinctly describes.

At first sight, it’s difficult to understand why offline and online ratings systems should be related at all.  One is for mainstream commercial content and the other is essentially people communicating with each other about their passions, concerns and views of the world.   The answer lies in the fact that consumers (aka people) are now mixing up the mainstream and the social to create media services of their own design, personal media platforms that reflect the nuances of their own lives.  Increasingly, people are collecting media and, using digital tools, patching it together like scrapbooks that can be added to, altered, reviewed or replaced, according to the tips and pointers they receive from their social networks.  The problem is that traditional media ratings systems are locked out of these vibrant content markets which are driving people’s attention so powerfully.  And the old school is yet to find a way to join the fun.

Not that they've been trying very hard.  To date, media companies have been focused on preventing their precious and expensive content from being sucked into the share-and-compare economy at all. These P2P marketplaces have seemed murky, unregulated and unmeasurable.  The perception has been that while exposure to these environments can increase the social value of content, it can destroy the commercial worth.  This has driven many legal battles over the last ten years, notably MGM vs Grokster in 2005.

However, the picture is changing.  As personal media platforms grow and the share-and-compare economy matures and thrives, even the lawyers are being forced to throw in the towel as the RIAA did recently with it once hardline campaign.  Mainstream media is being sucked onto the web by more powerful IP networks.  This makes it possible to measure the popularity of content as it’s plucked from mainstream sources and stuck into digital scrapbooks around the world.  Distributed ratings we might say.  And in this way, we can start to see how closed commercial ratings and open social systems could eventually blend. 

Which will mean that brands can once again measure the value of media content.  Not only in traditional spots and slots, but as it zooms off into the share-and-compare economy to which the world's attention is increasingly turning.

Comments

[Roger, Online PR Agency, C&M]

Top post James. How do you see media brands getting the right handle on the data - where's the point of measurement? My guess is this will be a headache for some time to come... you can't just measure the telly (or any single channel), but what's the point of aggregation and who owns the advertising service / 'scrapbook' as you say...? The MySpace measurement stuff you mention looks interesting.... makes my head bobble a bit though : )

[Evan]

Wow great article thanks for sharing. Saw it on Twitter.

[Jason]

For media and for everything else. Whats even more interesting is that Social/Community sites built around certain subject matter, topics, lifestyle, or careers are now finding they can sell their users data, not only what people say they like, but what they are willing to take money out of their wallets for. These sites are now selling this information to key players in the stock market. With this information they can see where the money is flowing before companies even close the books for the quarter.

[James Cherkoff]

Thanks for the comments chaps.

Roger, the whole area makes your head spin, but it's where the real problems and therefore opportunities lie. It might be one of the *big* areas that gets sorted out during the downturn.

Thanks for stopping by Evan.

Hey Jason, very interesting. So is that real-time branding?

[Brad Bell]

"This makes it possible to measure the popularity of content as it’s plucked from mainstream sources and stuck into digital scrapbooks around the world."

The quote above links to an article about Auditude, which, quite frankly, sounds like we have the technology to open up the world to recombinant media again. As you will recall, we collectively put an end to recombinant audio like hip hop by making sampling so expensive and risky that people stopped doing it. (Today instead of hip hop, we have rap. Blah.)

With Auditude, it sounds like underground artists like AK_Alias - http://vimeo.com/1723070 - for example, could not only move above ground, but conceivably even get paid, providing a valuable commercial service advertising old media. Fantastic!

Implicitly this also means before long we will be able to search for every incidence of a phrase like, "We know the WMDs are there," ever broadcast anywhere, whether for art or simply gathering evidence.

*Way* more important than measuring eyeballs and setting ad rates :-)

[James Cherkoff]

Great stuff Brad, I can always rely on you to get to the heart of the matter!

Your point that the law needs to alter is spot on. I'm sure it will take forever, but it does seem that the legal shackles are at least being loosened, if not removed.

And it's always good to be reminded that the web isn't just a big media machine.... ;-)