Dan Lagani Interview – “The Boss”
Back in the spring of 2009, I wrote a column for minonline.com on why paid digital content had a bright future.
At the time, the general sentiment in media circles was that free or freemium, ad-supported models were the most sensible. I suggested that media brands that offered unique, differentiated experiences online coupled with frictionless, one-click payment systems could see meaningful growth. Amazon’s Kindle was already in the market, but the iPad was still a year away. Some 50 million tablets later, it’s hard to imagine just how much things have changed in such a relatively short period of time.
So it was with great irony that one night last week, I downloaded New York Times columnist Thomas Friedman’s latest book, That Used to Be Us: How America Fell Behind in the World It Invented and How We Can Come Back (Farrar, Straus and Giroux). If you haven’t read it, it is worth every cent of the $12.99 download price. In classic Friedman fashion, he and his co-author, Michael Mandelbaum, make the big, game-changing ideas simple and compelling. While he is mostly speaking about the challenges facing America today, I was repeatedly struck by how comments like this—on how our country responded to the end of the Cold War—were entirely relevant to all businesses including media:
It is very possible that in the year ahead, our country may go through another national election cycle with politics-as-usual. But in the media industry, business-as-usual is a thing of the past. Our “constituents” vote every day, often multiple times a day. Already, eBooks represent more than 50% of Amazon’s book sales and nearly 20% of major publisher sales come from e-formats.
Despite the early-on hand wringing change often brings—including the recent concern whether offering subscriptions via Apple would make sense for publishers—early evidence suggests that digital sales via Apple, Amazon and Barnes & Noble represent growth opportunities more than cannibalization. Perhaps equally as encouraging is the fact that the same well-established brands that seemed to be most vulnerable are actually positioned to do quite well because of their trusted connection with consumers. In fact, not only is my flagship brand Reader’s Digest currently the top-selling magazine on the Kindle, but total digital edition sales now exceed 25% of its monthly magazine newsstand sales.
Even as I write this, my first column on paid digital content seems so much farther in the past than just two years ago. The difference today is that the future is now. While there are still many changes to navigate in the months and years ahead, it’s clear that after some early blows, the media business continues to adapt, evolve and represent one of the great innovation engines in America today.
Dan Lagani is president, Reader’s Digest North America.
The other day I had the chance to speak to a group of students taking a Media Strategy course at Michigan State about the convergence of traditional and new media. Connected via Skype, it was the fastest two-hour conversation that I’ve ever had. The students were engaged, asked good questions and taught me as much about what’s coming as I did them. And before we knew it we were out of time.
One of the more interesting moments was when the conversation moved to social media – and, more specifically, about brands becoming a larger part of platforms like Facebook. I expected resistance over the growing number of commercial fan-pages, but in fact the students were fine with the trend. (Not surprisingly, they were concerned about how future employers would be viewing their postings come hiring time!). A quick look at how large a following some well-known brands now have on Facebook makes it quite clear that a lot of folks share the students’ point of view:
- Starbuck’s : 5,975,000 fans
- Coca-Cola: 5,095,000 fans
- Skittles: 3,868,000 fans
- Adidas: 2,164,000 fans
- Zara: 2,017,000 fans
- Burberry: 898,000 fans
Numbers like this do raise the question of what happens to ad-driven media when brands have the ability to speak directly to very large numbers of their best and future customers – without the need for middlemen? My sense is that while Media Brands won’t all disappear – the battle for ad dollars will continue to get tougher as brands shift resources to support these new, direct efforts – which, unlike traditional “direct-marketing,” also provide for a two-way conversation.
For the moment, however, we’re still early in the corporate social media game and most brands haven’t started focusing on a critical piece of the equation – content. Most of us would never think of inviting friends to our homes without offering them a drink or something to eat – yet ironically that’s the equivalent of what many brands are doing by not making content strategy a central part of their marketing plans. Joe Pulizzi of Junta42.com and a longtime content strategy evangelist notes in a recent post from Online Marketing Summit 2010 that just four marketers in a room of 300 had a formal content plan.
Despite this current content gap – if recent history has shown us anything about how digital continues to redefine the traditional media model – it’s only a matter of time before Brand Marketer’s get this piece of the puzzle in place. While this will cause more pain for ad-dependent businesses, it’s just as likely to create opportunities for a new generation of “Custom Publishers” to manage content and fan engagement on behalf of marketers; a service that the Michigan students – and a whole range of smart business people – will be quite happy to provide.
Dan Lagani is the founder of Tre Cani Advisors, a N.Y.-based media consultancy focused on digital media, fashion, beauty and retail.
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