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John Fraim, GreatHouse Company

Brand is the Media

The broader the media and less targeted its market, the less brand equity, profitability and power resides in the media, while the greater profitability and power resides in the content of the media. Conversely, the narrower the media focus and more targeted, the greater power resides within the media and the less power in its content. In effect, the brand in mass media is content while the brand in niche media is the media itself.

This point is underlined by the article "Strategy and the New Economics of Information" from the September-October 1997 Harvard Business Review by BCG consultants Philip Evans and Thomas Wurster. An example from television networks and cable channels is provided by the authors. Television viewers, they note, seem to flock to the hit shows without caring which network these shows are on. However, audiences select specialty programming such as nature documentaries or music videos by tuning to a specific cable channel offering this format. (Can you name the network your favorite show has been on? Or, the top producer nature films on The Discovery Channel?)

Different patterns of competitive advantage and profit are suggested by the above two situations. Networks need hit shows more than hit shows need any particular network. In this sense, the producers of content have the power and receive the higher return on their investment. On the other hand, producers of the low-budget nature documentaries need a distributor more than the distributor needs any particular program. Here, the profit/power pattern is the reverse with the media holding the power.

As Evans and Wurster note, in one year Bill Cosby earned more than the entire CBS network. And, the Discovery Channel most likely earns more than all of its content providers put together. The power dominance finally plays itself out in profits. Despite the fact that CBS's 1996 revenues were about six times those of the Discovery Channel, Discovery's 52% profit margin dwarfed CBS's 4%.

The authors conclude that "The economics playing out in the television industry are a model for what will likely emerge in the world of universal connectivity. Think of it as two different value propositions: one is a focus on popular content; the other, a focus on navigation."

The battle played out between network TV and cable is also finding its counterpart on the internet with an increasing division between two major types of sites: content providers and navigational "engines" or "portholes." In effect, the big content providers are the television networks of the internet while the navigational sites are the net's cable channels. Theformer is a "place" arrived at while the latter is a "road" to a place.

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Brand equity is greater when there are greater costs to switching and lower when there are lower costs to switching. For example, ER's audience have minimal switching costs from changing the channel one network (brand) to the next. (Assuming the same time slot). Seeing ER on ABC, CBS or NBC has little importance and therefore these brands little brand equity. Conversely, switching from watching a lion devouring a zebra on The Discovery Channel to Madonna dancing around in metal underwear on MTV has great switching costs associated with it.

The brand challenge is about to play in the new medium of the internet. Many questions are posed. One is that perhaps an entire site should be looked at like a TV network with particular web pages inside the site similar to cable niche media. In this sense, one might say that when entire sites are "bookmarked" media context is being chosen. On the other hand, when individual pages (away from homepage) are bookmarked one can say that content is being chosen.

Will brand equity reside in the context of the entire site or in the content of the site's individual pages? This will be one of the key areas that brand dynamics and symbolism play themselves out over the internet during the next few years.

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