Partnerships Can Help Media Companies Be More Entrepreneurial*

television tv flat screens AP

One of the most difficult things for a traditional media company to do these days is spend serious money on new technology or testing new business models.

It’s not necessarily that they don’t have cash flow, or aren’t doing well – though media companies have had their share of economic challenges over the past few years – It’s that there are too many choices to test. There are so many new technologies and consumer media consumption habits are changing so fast, it’s nearly impossible to know which ones to spend the money on.

As noted in my book C-Scape, many of the smarter companies are finding technology, distribution and content partners to join the experiment and cut the risk and costs by the number of partners they get. It allows each of the partners to get what they really need, proprietary information about consumer behaviour: i.e. will the consumer want to use a new platform or technology to consume content or interact with advertisers.

The latest announcement along these lines is that Yahoo, CBS, ABC, and HSN (Home Shopping Network) will test interactive features on programs that air over Yahoo-connected TV’s, which will include TV sets made by Sony and Toshiba and set-top box devices made by D-Link and Haier Electronics Group. [UPDATED]

It’s simple. Do television viewers WANT to interact with programmers and advertisers while watching TV? Will viewers of CBS’s Showtime Boxing want to get more information about or even predict who will win while watching a live fight? Will people watching HSN use their remotes to actually buy an item they are seeing on Home Shopping Network, or is having the phone nearby good enough?

This is just the latest of many new partnerships. Another example is the Sony, Discovery and Imax partnership on a 3D-TV channel.

In each case the partners are testing either technology or consumer acceptance or both, vital factors to predict future behaviour. And they have cut their economic risk by allowing each partner to bring what it is good at doing to the party and by splitting all the additional costs two, three or more ways.

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