The role of product management is becoming more and more important inside media companies. The reason is twofold: media companies increasingly need a direct relationship with their audiences through new digital products, and they need to transform their cultures to adapt more quickly to the changing world around them.
Over the last decade I’ve had an intimate view of the media industry from all sides of the table: from my tiny video startup, to the largest media distributor in the US (Comcast), to a hyper-growth media platform (Spotify), to a huge legacy media company (Viacom)… leading product management organizations in each.
Despite a few successes, I’ve mostly learned hard lessons about innovation from each side of the table, especially around launching new disruptive video products and services.
I’ve also learned a lot about building teams, not just products. I want to share what I’ve learned, and ultimately make the case here that Hollywood needs Silicon Valley now more than ever.
How do Media Companies Stay Relevant?
To set the context, media companies today face the huge challenge of staying relevant amid rapidly changing consumer behaviors, especially in regards to how teens and young adults get and watch their video entertainment. Most consumers under the age of 50 have significantly cut back on their cable/satellite-delivered television viewing while significantly increasing their internet TV/video viewing. The two charts below, based on Nielsen data from the US, tell the story.
Compounding these platform-migration challenges, there is also a growing consumer intolerance for pre-roll and mid-roll video advertising, and a growing reluctance to pay high subscription fees for large bundles of content (i.e. cable TV). Netflix and Spotify have set new consumer expectations for what an advertising-free, $10 per month subscription can deliver, as far as entertainment and utility value. Despite what some outsiders may think, media executives do not have their heads in the sand; they understand the dynamics at play as well as anyone. The challenge is how they should respond – it is akin to redesigning a Boeing 747 into a SpaceX Falcon in mid-flight.
Media Distribution Strategies
Some media companies are responding by investing aggressively in their own digital distribution products to directly engage their audiences. For example, CBS has launched All Access, which is its digital subscription service that provides access to live sports and to its shows on-demand, on any connected device. CBS is also now offering a (mostly) ad-free version of this service for $10 per month, similar to Netflix. Time Warner’s HBO Now service is another example of big media going direct to fans with a subscription product. So far no direct-to-consumer TV network service in the US has been a runaway success; growth in these services has been gradual and hard-fought.
Meanwhile, other media companies remain committed to distributing their content via partners, including the traditional providers like Comcast (“Xfinity”), Charter (“Spectrum”), and Sky (in the UK); digital subscription platforms like Hulu and Amazon; and short-form platforms like YouTube, Facebook, and SnapChat. Fox and Discovery are examples of this distribute-by-proxy group, taking their content to where their audiences already live. But time will tell if TV networks, and their brands, can continue to thrive exclusively on third-party platforms in the internet era, as they have in the cable era, without a direct relationship with their viewers.
Another key consideration in media distribution strategy is that the formats of storytelling tend to be shaped by their distribution platforms. This has been true since the advent of the printing press, and continued with radio, television, and now the internet. However, there may be a significant difference with the internet: content formats on the internet always seem to be evolving, and evolving quickly. Consider that just in the last few years we’ve seen the rise and fall of Vine’s 7-second vignettes, the mainstreaming of SnapChat’s Stories and daily Discover video compilations, and the rapid growth of Facebook’s Live video platform. The tech companies are defining the future of video storytelling, not the content companies.
The bottom line is that media executives “get this”. They understand they need to adapt their distribution strategies, and many believe they also need to transform the culture of their companies to deal with this new world. Some of them are looking to Silicon Valley for inspiration, and the role of product management in particular.
Creating a “User-Centric” Culture
Hyper-growth internet companies like Amazon, YouTube, and Facebook have a common cultural foundation: they are obsessively user-centric… and the product manager is usually the guardian and evangelist of user-centricity inside these companies. So what does user-centric really mean? Below are some key principles that I believe define it. Not coincidentally, they also represent north stars for media companies as they build direct relationships with their audience.
- Business success is the natural outcome of creating value for end users. In other words, when you solve real problems for your users, they will engage more often and more deeply, and that is the fuel for your business. This holds true for most business models, whether advertising, subscription, or transactional.
- Long-term user growth should take priority over short-term business opportunity. This one is a real challenge for large companies beholden to quarterly revenue goals and lured by quick cash. Yet some media executives are beginning to quantify the Lifetime Value of their direct audience and they’re seeing that increasing long-term user retention can have a multiplier effect on their revenue and margins.
- Product ideas are just hypotheses until proven with data experiments. None of us is Steve Jobs, so let’s stop pretending. While data-driven product development has taken hold among Silicon Valley product managers, it is a foreign concept to most content producers. Yes, the role of data is rapidly expanding in media companies, but creative decisions are still mostly driven by gut and instinct.
- Products must be held accountable to KPIs (Key Performance Indicators) that are rooted in user growth. Releasing a new app is just the beginning of a long product development journey. Achieving a product’s goals takes a lot of post-launch optimization and experimentation. Broadcast TV executives understand the importance of post-launch KPIs, but don’t necessarily have the luxury of post-launch optimization or experimentation. Their shows need to demonstrate strong ratings immediately in order to justify their expense and their “shelf space” in the linear TV schedule. Netflix and Amazon, on the other hand, are not beholden to ratings and have more patience in allowing new shows to develop more slowly. This segues nicely to the last principle…
- Products struggling to achieve their KPIs should be rethought or killed. This is a more familiar concept for broadcast TV executives, who are quick to cancel shows that struggle with ratings. Likewise, if a product is not achieving its goals after a certain amount of post-launch optimization effort, product managers must make a similar call to cut their losses and move on to the next idea. Ironically, while media executives are comfortable with this concept, it doesn’t always translate to their digital products. There are literally thousands of old TV network websites and apps with no users, piling up and cluttering the Internet. It’s like all the space debris circling our planet, putting at risk every new space mission (cue up that scene from the movie Gravity).
Make no mistake, these principles are north stars; they’re easier said than done. But without these guiding principles it’s nearly impossible for large organizations to navigate major transformations. Teams need to be motivated by a clear vision and have a set a principles to guide them in their execution of the vision.
Translating Product Management Into Culture
If Hollywood is to take inspiration from Silicon Valley, it should focus on the positive ideals that tech-based product managers represent. Below are those key attributes that, in my opinion, define a great product manager.
- User-Focused: being obsessed with fixing user problems and creating the ideal user experience, regardless of whether the product is consumer-facing (a video app, for example), internal-facing (a CMS, for example), or a back-end system (the video pipeline, for example).
- Inspiring: being a passionate visionary and dynamic storyteller who can influence the most resolute executives. Being able to influence without authority.
- Original: applying “First Principle” thinking: the act of coming into every conversation with openness and a lack of preconceived notions, looking at everything from a unique perspective to find the approaches that others have missed.
- Simultaneously Creative and Analytical: possessing strong instincts and opinions based on personal experience, while being guided by data and quantifiable KPIs.
- Practical and Tough: being a ruthless prioritizer with thick-skin; can take the inevitable arrow without panicking or straying off course.
- Non-Political: putting the company’s mission above personal missions, lets their accomplishments speak for themselves, and is transparent and consistent in communications regardless of audience.
Not only are these the raw ingredients for product management excellence, they are also the same attributes that media companies need in their leaders throughout their organization. Without attracting great product managers who can drive culture change through example, traditional media companies may lose their influence in shaping the future of digital storytelling. Worst case, they may find themselves fully disintermediated by the native digital platforms.
I do believe big media still holds important advantages over native digital platforms. Large media companies still have a strong grip on Hollywood creative talent and production resources. They also have an ultra-lucrative (legacy) business model that can organically fuel digital product experimentation and risk-taking. These advantages ought to make the opportunity attractive to experienced product leaders, especially those motivated to build great culture as well as great products.
Given the challenges big media faces, the core principles and attributes of great product management will soon be in high demand across the industry, but they are currently in low supply. This creates awesome opportunities. Hollywood needs Silicon Valley now more than ever. For the right product leader, the opportunity to drive transformation in big media can be very rewarding. It has been for me.