Consumers win in 2012
By Cassidy Morgan
Over the last few years, social media has helped fuel important people-led movements. Be it the Arab Spring, various “Occupy” movements, or simply product recommendations, the use of social media has shifted from fun into serious business—in social, political, and economic terms.
Content is being developed at a dizzying pace and consumers are becoming more comfortable relying on information that is not branded except by a user’s name or Twitter handle. Traditional media companies are no longer seen as the go-to sources. Instead, the best have embraced the notion of user-generated content to ensure relevance in an increasingly competitive market.
Even media companies that are deeply ingrained in offering sophisticated content to professionals around the world (such as Bloomberg, Thomson Reuters, or LexisNexis) will have to battle consumer-generated information and opinions as businesses cut costs and look for cheaper ways to get to the same information.
As the content side of media has changed, a similar shake-up has happened on the device side. Recent years have seen an incredible proliferation of devices and apps designed for consumers to experience content at home, at work, or on the go. Hardware makers have created distinct ecosystems in an attempt to form lasting relationships with consumers, and the winner is far from certain.
Apple’s first-mover success is not guaranteed to last forever, as the company charts a new course without founder Steve Jobs. Google is pushing harder than ever to establish its Android operating system as the leading model for content consumption. Companies like Samsung and Amazon are catching up on the device side. In fact, Samsung became the world’s largest seller of smartphones in the fall of 2011. All of these developments put significant pressure on Apple to stay ahead of the game.
All of this turmoil and uncertainty may sound tough for the business, but it’s good news for the consumer. As companies clamor for content, they are eager to build a network of consumer reporters around the world to provide a firsthand look – not only at burgeoning revolutions, but also at trends, product reviews, etc. This means that consumers will find themselves in the position to make money by providing this content. Monetizing access to information or creation of content is not a new idea. The scale at which it is now possible via global internet access, however, will create an unprecedented flow of money into consumers’ pockets.
At the same time, consumers will see a continuous wave of innovative consumption models and methods flood the market. Devices will become more user-friendly and customizable, apps will be developed to meet more and more specific consumer needs, and the number of models will continue to explode. Consumers will have more choices than ever before, and those choices will allow them to do more things on their terms than ever before.
Lastly, the content and device war will lead to continued price pressure for media companies and manufacturers alike. To capture consumers and lock them into an ecosystem, companies will be forced to invest significantly, leading to more aggressive price competition amongst the dominant players. In order to ensure that it will not be a race to the bottom, the best and most forward-looking companies will invest in the one thing that will provide long-term differentiation: their brand.
So who wins when it comes to media in 2012? The consumer wins all around: new opportunities to make money through user-generated content, more choice in devices and content, and lower prices for those devices and content.
On the company side, it will be a bruising battle. Look for the premium brands, like Samsung and Apple, to come under pressure over the course of the year as generic substitutes catch up. On the flip side, we can also expect those top names to protect their margins by investing in the uniqueness of their brands. If they do that well, their long-term success is ensured. But, no stumbles allowed—otherwise, the brand owners can watch the decline of their brand play out live online.