Convergence Or Mass Confusion?

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worried1.jpgThe media and communications ecosystem is evolving at an exponential rate. This evolution has triggered various corporations to reexamine their role in this new ecosystem, and has driven some corporations to reposition themselves in the media/communications market. Corporations that once reigned supreme in a single area of the communications market are now looking to leverage new technologies in order to keep up with the rate of change present in the world around them; thus defining new streams of revenue to ensure survival. These rapid changes have left many in the media, marketing and communications industries in a state of confusion.

In a recent Blog post, I began to uncover some of the shifts in the communications industry. In this article I will focus on three companies (each traditionally recognized in different categories) that have made major shifts in their corporate focus over the past few years. I will highlight the significance of actions taken by these various companies and address the role that media convergence plays in the strategies.

Nokia: From Paper Mill To Internet Platform

You may not know this (I did not know it either until I did some digging) but Nokia started out as a paper mill in 1865 (it was founded on the banks of the Nokianvirta river in Finland, hence the name Nokia). A lot has changed in the long history of this company. In 1992 Nokia helped pave the way for the mobile revolution. However mobile was defined quite differently in 1992 than it is today. At that time mobile technologies had little to do with the media industry, and I imagine there were not many articles written about Nokia by media/marketing practitioners such as myself.

A lot has changed between 1865 and 1992, but that volume of change does not rival the massive changes that have taken place between 1992 and the present day. Today, Nokia’s mission statement reads:

“Nokia is the world leader in mobility, driving the transformation and growth of the converging Internet and communications industries. Nokia makes a wide range of mobile devices and provides people with experiences in music, navigation, video, television, imaging, games and business mobility through these devices. Nokia also provides equipment, solutions and services for communications networks.”

Much of the populous is familiar with Nokia, as defined by the last sentence in this mission statement (an equipment manufacturer), but I imagine the rest of the statement is news for many of you. In reading this corporate mission statement it is hard to uncover what Nokia does not do. Nokia has become a full fledged interactive platform equipped with a music store and mapping service, all rolled into their recently announced suite of internet services entitled, Ovi. As if that were not enough, Nokia has also created a social network entitled MOSH and has shelled out 8.1 billion dollars on navigation services company, NAVTEQ (the company’s largest acquisition to date). Nokia is making a strong push to create something aligned with one of the major upcoming trends occurring in the internet space; cloud computing.

Nokia has also begun to build out the ability to access video content and is working with a partner on a mobile multiplayer game. One may wonder how Nokia plans to monetize all of these new efforts. Well, wonder no more! Nokia has acquired a company that specializes in the sale of mobile advertising; Enpocket. So the pressing questions are what exactly is Nokia’s core business? As a media buyer/planner do you need to start considering Nokia during planning season? As a marketer, is it time to give Nokia a call to see how you can integrate your brand with their new platform?
AT&T

AT&T’s corporate roots date back almost as far as that of Nokia. AT&T’s history dates back to 1876 when it started its path to domination of the global telecom market. AT&T’s historic market position has been obscured (to a certain degree) by the types of things that AT&T is doing today. Like Nokia, AT&T has jumped head first into the content syndication business. With the launch of products like Blue Room, AT&T’s streaming content destination, it becomes hard to define AT&T’s core business. Let’s take a look at how AT&T defined their corporate strategy in a recent press release:

“The deployment of next-generation video services reflects AT&T’s strategy to become customers’ preferred communications and entertainment provider and to deliver a video solution that provides greater value, flexibility and simplicity than competitors’ offerings. AT&T U-verse TV represents a critical new service in the company’s video portfolio, which includes AT&T Homezone(SM) service and satellite broadcast offerings. AT&T U-verse TV also underscores the company’s strategy to deliver integrated services to the three screens that consumers value most: the TV, the PC and the wireless phone.”

This quote is taken from a press release discussing AT&T’s TV and Internet services entitled, U-verse. It is very interesting that the second line positions AT&T as “preferred communications and entertainment provider”. The fact that AT&T is describing itself as an entertainment provider begs the question: Will AT&T one day adopt an advertising model to monetize its services?

Another important element to highlight is AT&T, like Nokia, is taking a platform agnostic approach to their initiatives. Each company appears to be achieving a certain amount of ubiquity across various hardware devices. At the beginning of this article I mentioned the notion of convergence, and it is the types of strategic developments by AT&T and Nokia where convergence is most prevalent. Each corporation is aiming to create platforms where content can converge across various pieces of hardware. According to Henry Jenkin’s “black box” fallacy many think of convergence as the coming collision of hardware devices. AT&T and Nokia’s strategies signify that this is clearly not the case. The element that is convergent is the content.

Google

No article discussing attempts to conquer multiple communications markets would be complete without a segment on Google. While Google’s history is not as lengthy as the other two corporations mentioned in this article, over the last few years we have seen the search giant enter many unlikely markets. However, Google’s recent attempt to acquire control of the 700 Mhz, is in my opinion the most compelling.

To some, it may seem difficult to find Google’s mission statement, “organize the world’s information and make it universally accessible and useful” reflected in Google’s potential strategic move to acquire the 700MHz block. However, it can be argued that controlling this bandwidth can allow Google to live up to the universal accessibility portion of their mission statement, especially since Google lobbyists have convinced the FCC to keep this spectrum open to everyone, regardless of who owns it. Still, the 700Mhz strategy, coupled with the rumors of the impending gPhone makes it difficult to refer to Google as merely a search engine.

So what does all this mean? Where is the media and communications industry headed as companies such as Nokia, AT&T and Google (and many others not mentioned in this article including Apple and Verizon) continue to redefine themselves. While I have no crystal ball, and don’t know exactly what the future has in store, there are certain factors that can be gleaned from all the activity in this space. In order to remain competitive it is important that major media and communications corporations work towards creating a platform capable of satisfying various consumer needs. In light of all of the fragmentation in this industry, consumers will begin to gravitate towards the communications offering that is the most inclusive. Furthermore, as content convergence becomes more prevalent, consumers will increasingly desire the ability to access all of their information at any time, from anywhere and through any number of devices. The platform that is the most robust, and is able to efficiently deliver the greatest number of services across various devices and channels will no doubt have the competitive advantage.

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