As in the established media, the distribution of power between players in the new multimedia environment—and hence the share of economic surplus—will be governed by proprietary, hard to replicate content, control of proprietary distribution, and the defensible loyalty of a unique set of customers.

In the emerging interactive environment, we have identified six defining themes that should guide content providers in their efforts to develop proprietary content for the new medium and maintain and enhance their direct customer relationships:

1. Affiliating with communities of interest. These communities are subject-oriented electronic meeting points that offer community members access to a variety of communications and content applications. Communities of interest are likely to become important vehicles for tapping into advertising and transaction revenues, building early affiliations with a core group of users, and establishing switching barriers.
2. Building a web of alliances. No one company has the content and capabilities to develop and manage a complete community of interest. Content providers need to build a web of companies (including competitors) to serve a community effectively. Moving early allows content providers to lock in the best partners and establish the most powerful web.
3. Leveraging proprietary brands. Brands will encourage trial and help providers gain a critical mass of users quickly. They may, however, lose their value if other providers move first.
4. Migrating proprietary, hard to replicate content. Truly unique content (for example, the film library of NFL football games) can act as an anchor, attracting users, related content, advertisers, and other service and product providers in a self-reinforcing cycle. However, most content (much more than people suspect) has close substitutes and/or can be replicated.
5. Acquiring scale to drive down advertising rates. As in traditional media, focusing on subscriber growth and building scale unlocks economic potential by attracting advertisers. Scale and the resulting lower rates create a barrier to entry for others.
6. Developing new skills to create content and to build and manage audience. Managing communities of interest entails combining what are currently distinct skill sets, including those of moderators (editorial intermediaries in interactive chat forums), editors, marketers, software architects, and archivists.

These six themes suggest that moving early will be central to establishing a power position in the new media. Each theme appears to be governed by a powerful cycle of increasing returns that rewards early movers with substantial advantages.

Those companies that move first will be able to define the multimedia landscape in their interests by selecting the most promising communities, locking in the best partners, and building their skills. By using proprietary content and brands—both their own and their partners’—early movers will be able to create the necessary critical mass of subscribers to attract advertising and generate transactions. The revenues these produce can be reinvested in new content and in promoting user-generated content, which in turn will attract more subscribers.