The 2007 Future
of Media Report was recently published in pdf, in time for
the Silicon Valley and Sydney based Future of Media
Summit.
In this article, we look at the main concepts, issues and
research
results discussed in this annual media report.
The 2006 edition of the Future of Media report
achieved a great deal of interest, with over 70, 000 downloads of the
freely available document across 20 countries.
This year
Ross
Dawson and the team at Future Exploration Network have put
together a compelling picture of the evolving convergence media
landscape.
It comes as no surprise, then, to
see the huge
growth of online social networks and social media taking center stage,
alongside a divergence in content monetization and advertising
approaches in a rapidly splintering media environment.
Here are the details:
The Future Of Media
Developments in the Last Year
Photo credit:
Felipe Wiecheteck
The report opens by surveying
significant developments in the media landscape since June 2006.
Here we are given an overview of the previous year, and the
changes
that made 2006 important for media publishers, networks and consumers.
Salient topics include:
- Industry transactions, acquisitions, layoffs
and closures:Here the importance of the NewsCorp Dow Jones acquisition,
the XM and Sirius merger and of course the
Google, YouTube
and DoubleClick deals immediately leap out at me.On the one hand, as
NewsCorp continue to succeed in their bid to own every mass media news
channel on the globe, and Google continue to dominate online
advertising.
-
On the other hand the
troubling 93% increase in
media layoffs in Q1 of 2007 as compared to the same period in 2006 is
somewhat disconcerting at face value. -
Reading between the lines, however, it would seem that
layoffs and
closures are focused on media conglomerates and the dwindling newspaper
industry, which fares badly throughout the report.With AOL Time Warner
firing 5000 staff, and the
San
Francisco chronicle cutting back 25% of its staff, working as
an independent online publisher never looked so appealing. - User generated content and new distribution
channels:If you hadn’t noticed already, user
generated content is driving the new web, whether through
video
sharing services, blog publishing or
social
network services
that users spend hours tending to.Gone are the days of a top-down
mass-delivered media, and in their place we are seeing an emergent
participatory
media culture. -
The report highlights the fact that the vast majority of
the
staggering seven billion online videos streamed each month are user
generated in nature, and that 120,000 new blogs are created each and
every day.The audience has gotten up from its chair, thrown away the
remote control and started making their own media. - Intellectual Property and Censorship:
Last year has been greatly divided on issues of
intellectual property, with the
RIAA
attempting to shut down file sharing site The Pirate Bay, and
suing grandmothers and children on the one hand.And – as the Future of
Media Report points out – EMI and iTunes dropping DRM
from some of its catalogue of online music sales on the
other. -
As
users reject such measures as DRM,
and persist in uploading and sharing content regardless of its
copyright status, there has been inevitable fall out, as in the $1
billion law suit filed against Google for infringement of Viacom media
properties.Nonetheless, the truly smart companies have chosen to
partner with YouTube and other online video sharing portals,
befriending rather than alienating their potential audiences. -
The report also makes mention of censorship issues from
the past
year, with US military personnel being banned from using MySpace and
YouTube – a sure sign of their disruptive nature and ability to leak
otherwise censored information.Mention is also given to the filtering
of “inappropriate content” by the recently launched Chinese MySpace.
In short this overview of the
year provides
interesting discussion points and touches on some of the salient events
in global media over the last year, without taking sides or entering
into critical analysis of the same.
Global Advertising Spending
While mass media advertising
still dominates global
spending, as illustrated in this first chart, there is an apparent
shift away from ill-targeted broad marketing using broadcast television
and newspapers, and increasing growth in new media channels of
delivery.
The simple fact is that while the market is still dominated by
mass
media, their grip is slowly loosening as new media giants step up to
take their place.
We are undoubtedly entering the age of
niche-targeted, personalized content,
and new media avenues, such as blogs and online video, prove great ways
to deliver this content, along with equally well targeted, highly
contextual advertising.
What strikes me as strange, and
this is something I
found throughout the Future of Media Report, is that global figures are
used for one chart, while the next closely related chart relies on
localized statistics.
In this case, we see global
advertising spending
and the role of Internet advertising within it side-by-side with a
chart clearly indicating the huge growth in online marketing spending –
in the US.
I would personally have liked to have seen a global
advertising expenses compared with a global
online advertising expenditure chart. As it is instead, I am left
wondering if this information was not available, or if perhaps the data
is being massaged somewhat due to an unfavorable comparison on a global
level.
No doubts that from reading these figures US-based online ad
expenditure is clearly among the highest in the world.
Nevertheless, at least from a US perspective, it would seem
that
online advertising expenditure continues its rapid ascent, and this has
to be good news for online publishers and advertisers alike – at least
those working within the English language.
Likewise the increasing
fragmentation and
proliferation of media channels. The Future of Media Report chooses to
illustrate the increasing number of content delivery avenues via an
example from US television:
Shifting Advertising Channels
The same principle applies well beyond the television set as
new
media channels increase in number at an even greater rate than niche
broadcast, cable and satellite television channels do.
This is becoming
a hard fact in front of everyone’s eyes as web and new communication
technologies make it possible for anyone to easily set up a
newsroom.
That may be in a small studio like that used by Mobuzz.tv
or at an even more grassroots level like the initiatives set up by
Chris Pirillo
and Robin Good
using affordable or even free broadcasting technologies.
The
long tail of media is definitely here and in full force.
Complementing the proliferation of content delivery channels,
the
report describes and underlines the growth in the digital advertising
world as a whole, and the variety of means through which this
advertising is and will be delivered.
The following projection from now until 2010
maps out an impressive range of advertising avenues. Time will tell if
they will come to fruition:
In short advertising looks set to
continue its course towards
personalization,
contextualization and appearance across multiple, highly fragmented
media channels, serving both high-end corporate media distributors and
independent publishers mining the long tail.
Growth Sectors Online and the Role of Social Media
It comes as no surprise to find
that social
networking services such as MySpace
and Facebook,
and
social media sites such as YouTube
and Wikipedia
are enjoying a healthy rise in online visitors.
Given the global reach of these destinations, however, it
seems
somewhat shortsighted to account only for their US, UK and Australian
versions, but perhaps this reflects the key audience of the Future of
Media report and summit?
Social networking services are enjoying an obvious boom across
the
board, and last year has seen significant growth in this area too. It
will be interesting to see the figures for next year, taking into
account the phenomenal growth of
Facebook
since the opening up of their platform.
I find the social media chart
somewhat baffling, as while YouTube
is the living definition of social media, and Wikipedia
at least scrapes in on the grounds of being user-generated, the Apple
website doesn’t strike me as in any way a social media destination.
One would then assume a possible reference to Apple
relationship
with music sales given iTunes high penetration and commercial success,
but given that iTunes lacks even the most rudimentary social
functionality – unless you count its primitive music sharing
facility.
I am a bit baffled by its inclusion above much more worthy
social media
candidates.
Regardless, the information
contained in this
section of the Future of Media report supports the ongoing contention
that media is rapidly becoming user-generated, personalized and
participatory in nature.
Worldwide Internet Access and Usage
The section devoted to worldwide Internet access
falls prey to the issue mentioned previously of somewhat arbitrary
national and global points of comparison.
Here you learn that in terms of total absolute number of
active
Internet users, the US leads the way, while that Japan lags behind in ”Internet
participation through PCs”.
But with no reported reference to the Japanese predominant
means of
Internet access: the highly developed Japanese 3.5G mobile Internet
platform.
Unfortunately, also the selection of countries
utilized in this new edition of the Future of Media report feels
somewhat arbitrary, if not altogether US-centric, with only Germany and
the UK representing Europe.
This is further compounded by the side-by-side comparative
chart for
Internet connection speeds, which uses an entirely different batch of
seemingly random countries to once again assert US dominance.
Having encountered the problems several US colleagues and
contacts
have with video streaming, I find these figures somewhat hard to
fathom.
It also seems peculiar that Japan goes missing from the
chart,
when average connection speeds are somewhere in the region of five to
ten times that of those cited for the US.
Regardless of how you feel about
the integrity of
this data, it seems without doubt the fact that broadband uptake is on
the rise, and while connection speeds vary greatly from nation to
nation, the age of dial-up is fast being left behind as the richer
media-infused web takes center stage.
Media Business Models
Key to the success of the
proliferating range of
business models being put to use is a solid understanding of how
monetization approaches need to adapt to the Long
Tail.
While mass media, bottom-up grassroots media and everything
else in
between can now coexist in prosperity, it is foolish to think that the
same business models can be scaled from one end of the market to the
other.
The cost of producing media at the tail end of
the scale has lowered dramatically in recent times, and
it is now possible for anyone to broadcast
themselves
over the web.
While mass media content is associated with high
production values, and can best leverage its monetization opportunities
through broad, sweeping campaigns, those production businesses at the
other end of the scale can better target a niche or multi-niche
audience.
As such, there is no right or wrong way, but rather a
multitude of
potential approaches that can be utilized to define an effective
business model.
What that means for independent publishers is that
spending time to carefully target a niche audience is a far more
productive means of economic success.
Rather that than attempting to replicate the
broad appeal and broadcasting approach of ‘big media’, with their large
marketing budgets and costly production expenditure.
Think niche as an independent,
and you will not find yourself out of business in the close coming
future.
The last section of the Future of Media report dwells on the
four levels of media personalization.
Social media such as blogs,
online video and social
network services offer an inherently more personalized user experience,
which in turn allows for a far more personalized means of advertising
and content monetization than mass media can get at.
As the diagram above illustrates, the Future of Media report
focuses on four levels of personalization, which, to summarize are:
- Nil
– The advertising delivered through mass distribution channels makes no
distinction between those that encounter it. This is the blanket
bombing approach - Content – niche media delivery
platforms,
such as magazines and cable TV channels offer a greater degree of
personalization by targeting their audience based on their interests - Demographic – the use of
Internet cookies
or location-specific ISP addresses can allow advertisers to target
potential leads based on geography, gender or even age, allowing
further targeting - Personalization – the final
tier depends
upon gathering detailed user information, whether using a registration
process, an online profile, viewing history or even directly expressed
personal preferences
Done badly, any advertising, even at the higher end of the
personalization scale, will seem intrusive – even more so when it has
had to collect huge amounts of data on the end-user.
However, with
subtlety and added user-generated value, such as the
well-thought-through algorithms of the Amazon.com book suggestion
engine, personalized online marketing can actually transform itself
from an intrusion to a welcome complement, adding to the overall user
experience of a service.
In short as media become more
granular and expand
along the long tail, it is possible to not only serve audiences with
material directly suited to their personal tastes, rather than to a
generic demographic, but also to apply means of content monetization
that add to the overall user experience.
This, should be of course, the ultimate goal of publishers and
content distributors across the board.
Conclusions
The Future of Media report 2007 closes on a
positive, open-ended note, stressing the fact that in
terms of media transactions and mergers:
“ the size and number of transactions over
the
last 18 months exceeds almost any other time over the last 15 years,
with activity focused on private equity acquisitions and trade sales“
Furthermore, we are left with the very real notion that new
business
models will necessarily come to the fore for those with the gumption
and inventiveness to stay afloat in the changing landscape.
Nevertheless, I was left with a strong feeling that the last
few
pages of the report somewhat lose steam and fall back on filler
material.
Interesting as an extended comparative chart of media
transactions, a series of network analysis diagrams focused on an
Australian broadcast group, and the republication of a somewhat
nebulous blog post are, they fall something short of the promise of
earlier material.
The Future of Media Report 2007 does
provide, however, some interesting insights and support for the claims
made as to the growth of long
tail niche media content, and social
media and social networks.
Not to mention the shift in
advertising and business models which is an increasingly granular media
landscape.
All of this would seem to bode well for both the large media
corporations willing to adapt to the changes in the ecosystem, and the
smaller independent publishers at the other end of the scale.
The ones that really need to worry,
as the
conclusion of the report makes abundantly clear, are those unwilling to
adapt and change their marketing, monetization and content delivery
approaches in an age of socially mediated, networked, increasingly
personalized media.
As print mass media continues its slow decline as a medium,
its
publishers have much to learn from those enabling these new,
open-ended, two-way conversation: bloggers like you and I.
Michael Pick is a contributing author discussing broadband video tools and software. His work can be found on MasterNewMedia. Post has Some Rights Reserved.
