Strategy > MEDIA CONVERGENCE IN THE "SPACE-OF-PURCHASE"
Originally posted September 2007.
It's been more then 2 years now since I moved on from my sr. management post with a leading commercial music company in the US. My former employer had successfully broken into the business in 1998 by developing innovative music customization and playback technologies that enabled it to differentiate itself in a marketplace which had been dominated for more then 25 years by two large organizations.
The company had evolved from delivering music to retailers on tapes, to encrypted long-play CDs, and eventually via network connectivity. In 2003 I was part of a team that began investigating our entry into the emerging digital signage business - as a natural extension of our core business. Five years later, the company now manages a variety of significant digital signage networks including an award-winning network for a high profile brand, and continues to serve licensed music programming to tens of thousands of locations every month.
Today, most commercial music organizations have diversified to provide digital signage programming and integration services. We are also seeing some digital signage providers looking to diversify their offering with music content. As always, the driving force of this media service convergence is the customer.
From a technology standpoint, it makes sense. When it comes to digital media content including music, motion graphics, video, and messaging it’s all the same ones and zeroes. For business operators (banks, fashion retail, restaurants, etc.) who are preparing to develop and deploy an in-store media program, they are now more then ever, looking for a single provider that has the capabilities to serve custom content to a single in-store appliance that can playback their customized mixed media.
Of course, there are inherent challenges to making this a reality for clients. First off, digital signage providers do not have licensing rights to music and these are not readily available from the music labels. Most likely, they will need to partner with a commercial music company that already has the existing licensing rights and who are themselves looking for a digital signage partner to round out their media offering to their client base.
The biggest challenge remains technology. The major players in the commercial music industry have each developed their own advanced music management, customization, scheduling, distribution, and playback technologies. These closed systems all incorporate some level of proprietary content encryption or digital rights management (DRM), which have enabled them to protect the music files (as dictated by the music labels) and implement their subscription-based business model.
This approach has also made it more difficult for clients to change providers due to the inherent costs of switching hardware and software platforms. When you’re talking 500, 1000, or more locations, the cost of changing can be prohibitive. Better make the right choice out of the gate.
There are even more digital signage organizations offering end-to-end technology solutions including feature-rich management and scheduling software, and single and multi-zone playback appliances.
So where do we go from here? It’s obvious that the winning solutions will come from digital signage or commercial music organizations that are willing to invest in developing media software applications that will enable the management and custom programming and scheduling of music and digital signage content on a single platform.
Secondly, this will need to incorporate DRM technology to protect licensed content especially as it pertains to the music files.
Finally, the in-store playback system will need to accommodate varied mediums and offer individual multi-zoning capabilities.
The encouraging news for business operators is that this media convergence in the space-of-purchase is happening now and at a rapid pace.
It's been more then 2 years now since I moved on from my sr. management post with a leading commercial music company in the US. My former employer had successfully broken into the business in 1998 by developing innovative music customization and playback technologies that enabled it to differentiate itself in a marketplace which had been dominated for more then 25 years by two large organizations.
The company had evolved from delivering music to retailers on tapes, to encrypted long-play CDs, and eventually via network connectivity. In 2003 I was part of a team that began investigating our entry into the emerging digital signage business - as a natural extension of our core business. Five years later, the company now manages a variety of significant digital signage networks including an award-winning network for a high profile brand, and continues to serve licensed music programming to tens of thousands of locations every month.
Today, most commercial music organizations have diversified to provide digital signage programming and integration services. We are also seeing some digital signage providers looking to diversify their offering with music content. As always, the driving force of this media service convergence is the customer.
From a technology standpoint, it makes sense. When it comes to digital media content including music, motion graphics, video, and messaging it’s all the same ones and zeroes. For business operators (banks, fashion retail, restaurants, etc.) who are preparing to develop and deploy an in-store media program, they are now more then ever, looking for a single provider that has the capabilities to serve custom content to a single in-store appliance that can playback their customized mixed media.
Of course, there are inherent challenges to making this a reality for clients. First off, digital signage providers do not have licensing rights to music and these are not readily available from the music labels. Most likely, they will need to partner with a commercial music company that already has the existing licensing rights and who are themselves looking for a digital signage partner to round out their media offering to their client base.
The biggest challenge remains technology. The major players in the commercial music industry have each developed their own advanced music management, customization, scheduling, distribution, and playback technologies. These closed systems all incorporate some level of proprietary content encryption or digital rights management (DRM), which have enabled them to protect the music files (as dictated by the music labels) and implement their subscription-based business model.
This approach has also made it more difficult for clients to change providers due to the inherent costs of switching hardware and software platforms. When you’re talking 500, 1000, or more locations, the cost of changing can be prohibitive. Better make the right choice out of the gate.
There are even more digital signage organizations offering end-to-end technology solutions including feature-rich management and scheduling software, and single and multi-zone playback appliances.
So where do we go from here? It’s obvious that the winning solutions will come from digital signage or commercial music organizations that are willing to invest in developing media software applications that will enable the management and custom programming and scheduling of music and digital signage content on a single platform.
Secondly, this will need to incorporate DRM technology to protect licensed content especially as it pertains to the music files.
Finally, the in-store playback system will need to accommodate varied mediums and offer individual multi-zoning capabilities.
The encouraging news for business operators is that this media convergence in the space-of-purchase is happening now and at a rapid pace.
Stay tuned!