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A ‘Box’ that will transform media

FT 3.07.06

Pose
the question: “What’s on the box?” and you will get
an answer about that night’s television listings –
schedules that were set by a handful of people whose ideas dominate our
viewing. Ask the same question in five years’ time and you will
get a very different response.

Our
homes are to be the site of a revolution as dramatic to the economics
of entertainment as the arrival of the gramophone, radio,
“talkies” or television itself. The Box
of the second decade of the 21st century will not be colloquial UK
shorthand for the television set but the description of a ubiquitous
bit of kit – central to every home.

Although we will spend no time looking directly at it, the Box
will be as important to our home entertainment as the television is
today. Indeed, far more important. It may not alter what we watch but
it will change, forever, how we watch and pay for it – and it
will be a shock to the job prospects of those television schedulers and
their employers.

The nature of this omnipotent Box will come as no surprise. If you have Sky+ you are experiencing a prototype. The Box
will be a high-speed computer, connected to the internet via broadband
with a substantial memory. Its inputs will include: cable and satellite
television and radio; various frequencies of digital terrestrial
broadcasting; the entire world wide web; and third generation mobile
phone signals. Its outputs will feed flat screens and wireless speakers
throughout your home and top-up your iPod, MP3 player and laptop
personal computer. It will deliver everything we watch and listen to
today plus much more. It will also, probably, connect you directly to
the library of every film studio, music company and television producer
in the world.

So what, you may well ask. What will be different?
The experience of watching a television programme or listening to a
radio show will not change that much. More is not necessarily better.

Broadcasting
companies such as ITV and GCap in the UK exist because they rent
valuable broadcasting spectrum from the government. They buy programmes
to fill the time and manage to sell just enough advertising to leave
an, increasingly small, profit. Channel 4 exists because the government
is kind enough to give it valuable spectrum and it sells enough
advertising to make an, increasingly large, profit. And the BBC! Well,
the BBC is given almost unimaginable amounts of free spectrum and gets
billions a year of tax income to fill its airtime.

When the Box
becomes the norm in every home all this will change. You and I will no
longer dance to someone else’s tune. We will consume television
and radio the way we already consume magazines and newspapers –
when, where and how we want to, at a price we are prepared to pay. We
will seize back control of our living rooms and kitchens.

Does
this miracle come free? Of course not. For sake of argument let us
assume it costs £100 a month to subscribe to all this –
and, by the way, all your internet access and phone calls come thrown
into the deal. Some people will happily pay this much. But now let us
assume you agree that the Box can show you one
minute per hour of advertising when it deems fit. Now the charge is
only £50 a month. Agree to five minutes an hour and the Box comes free.

Who will supply the Box
itself? BT Group, Vodafone, Carphone Warehouse, Microsoft, Sony? There
is a long list. My money is on Apple: all that cool design and hot
functionality, even a sexy name. How about iHome?

In the Box-enabled
future the economic model changes. Advertisers will still want to reach
audiences but they will do this through relationships with
individual consumers, not with channels. They will get into our heads
by getting into our Boxes.

Each Box,
broadband hard-wired into our home, will have its own unique internet
protocol address. Then the advertisers will be able to talk directly to
us, one-to-one, without a television or radio broadcaster getting in
the way. Today they are forced to talk to a relatively random group of
people who happen to be attracted to a particular programme on a
particular channel. In future those advertisements will be sent to your
Box with you in mind.

Your Box will
know you watch a lot of gardening shows and that you live in the
country and that it has stopped raining in your area. When you sit down
to watch the news it will show you advertising for lawn mowers.
Your friend, who lives in a city, will watch the same news as you but
he is getting advertising about holidays in China reflecting his recent
viewing and listening habits. 

So here is a technological
revolution that is not just likely but certain. In the past five years,
conventional broadcasting businesses have seen a huge reduction in
their stock market value. Some observers put this down to poor
management but, given the inevitability of the Box
and what it implies for the future of broadcasting franchises, it is
perhaps a wonder that they have any value at all. And, by the way,
having a Box will surely not require a licence fee to be paid – so where does that leave the BBC?

The
writer is chairman of three quoted UK media companies: Johnston Press
(newspapers), Future (magazines) and Mobile Streams (mobile content)

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Future Of Media: Draft For An Open, Emergent, Strategic Framework

Future_of_media_strategic_framework_map_550.gif
Future of Media Strategic Framework – visual map

The Symbiosis of Mainstream and Social Media

A symbiotic relationship is emerging
between mainstream media (such as newspapers and broadcast), and social
media (such as blogs, podcasts, and online social networks). Mainstream
media and social media feed off each other.

Blogs provide a vast public forum for discussion of content provided by major media. Leading blog search engine, Technorati,
has enabled every online piece on The Washington Post, Newsweek and
Associated Press newspapers to display the complete blog discussion
about that article, turning an article into a conversation visible to all.
At the same time, it has become common for mainstream media to quote
blogs and bloggers, sometimes exclusively, and the conversations
between bloggers often provide the ideas for media stories.

Together, mainstream and social media create a single media landscape in which we can all participate.

Strategic questions: How can you best draw on
social media for content and ideas, and facilitate social media
commenting on and annotating your content?

Key Features of Social Media

Conversation is almost by definition the heart of social media.

Relationships between people and ideas emerge in a very different fashion from the one-to-many configuration of mass media.

Annotation is commentary on and reference to
existing information and ideas. This will soon spread into geospatial
annotation, where conversations are generated around physical locations.

Self-exposure is a more powerful driver of social
media than self-expression. The exhibitionism and associated voyeurism
of blogs and social networks are a key factor driving participation, as
Richard Watson points out.

Key Features of Mainstream Media

Access is a distinctive feature of mainstream
media, whose representatives can reach almost wherever they want, by
virtue of their position and power.

Production capabilities are extremely high based on equipment and expertise.
Consistency of output and quality assurance is expected, along with reliability – people know what to expect.

Professionalism as a characteristic of mainstream
media cuts both ways – there are clear standards and a high
degree of talent, yet professionalism is a box that amateurs can easily
step outside of to innovate.

The Consumer/ Creator Archetype

The history of media has been one of passive consumption.
However, today one of the strongest social trends is towards
participation. There are certainly many who are largely content to be
“couch potatoes,” consuming the media they are given.
Others – particularly younger people – are keen to create, by
establishing blogs or individual spaces on sites like MySpace,
or sharing photos or videos online. Even clicking on a link is a
creative act that can impact what other see or don’t see. Yet
this is not just about a social divide.

Everyone of us is both a consumer and a creator. Finally today we have been given the power to create for others as well as to consume what we are given.

Strategic question: Are consumers or creators more valuable in your business model? How can you encourage consumers to become creators?

The Matrix of Content

Content generation requires both creation and filtering.

Each of these two roles can be performed by either media, or their
audience. Traditionally content has been created by journalists, and
filtered by editors. Today “user generated content
has become a major buzzword, referring both to personal sites and
blogs, and to content submitted to mainstream media, such as mobile
camera photos or home video footage.

However the emergent vitally important trend is user filtered content.

Time Warner’s re-launch of the Netscape site as a user filtered news site is an important move. From another perspective, the Current TV model
can be understood as user generated, media filtered media, which is
being challenged by wholly user and media filtered properties such as YouTube.

Strategic questions: What configuration of user
and media content generation and filtering will you select? In
particular, how will you implement user filtering?

Format Shifting and Creating New Formats

Much content is “embedded” into the media, making it only consumable in its original form.

Yet through the many mechanisms of time shifting, space shifting, and format shifting, content readily becomes user-controlled.

In addition, the emerging world of media is vigorously engaged in
creating new formats. When the first mass circulation newspapers were
produced in 1888, the concepts of newspaper headlines, lead stories,
and photo captioning were yet to be developed, notes Art Kleiner,
editor in chief of Strategy + Business magazine, in an interview for the Future of Media Podcast Series. It took several decades to develop what we now recognize as a standard format for newspapers.

Soap operas
were another format innovation that emerged after the birth of TV, that
has stayed with us and evolved. The next decade or more will be an
exploration of what formats will be attractive to audiences in a world
of pervasive media.

Strategic questions: To what degree – and how –
do you impede or facilitate the shifting of time, space, and format to
user-controlled formats? What format innovations will you experiment
with to discover the winning media formats of the next decade?

Revenue and Ad Aggregation

Two of the key features of emerging media are that its reach and impact are far more targeted and measurable than before.

This drives are great willingness to spend advertisers and publishers.

There are an array of traditional media revenue models that will
continue in various guises, potentially driven by the emergence of
micro-payments.

Classifieds is rapidly disengaging from traditional media, though some companies are still managing to keep them connected.

One of the most important shifts is that advertising is now often aggregated. Media can sell advertising directly, as the major publishers do. However now, by virtue of Google’s AdWords
program and imitators, anyone can publish online and get advertising
revenue without having to sell it. This is transformative in enabling
the many of the “Long Tail
to move towards becoming viable – though small – media
properties. Microsoft too is aggressively following the ad aggregation
path. The emerging players in ad aggregation are both enabling a
massive growth in media diversity, and stand to do enormously well in
allowing advertisers to reach their target market, wherever they are
turning their attention.

Strategic questions: Are media content and
classifieds natural partners, and if so how do you connect these
effectively? Where are the aggregation points into which you can bring
together or deliver highly relevant advertising?

Distribution: Channels, Devices, Mobility, and Video Everywhere

Channels and devices are distinct. There is an array of delivery
channels for media, often not directly linked to media themselves. The
devices through which media is delivered are critical leverage points
to guide access to media, as Apple has proved with the iPod.

The most fundamental shift is that both channels and devices are shifting to the mobile, rapidly enabling anywhere/ anytime consumption of media.

Perhaps the most important example of this is video glasses. It is
just this year that video glasses have become high quality and
comfortable, which along with the advent of mobile video content and
devices, are making them a real consumer technology that is likely to
take off big time. The availability of video displays everywhere will
create a massive demand for video content that will be fed not just by
media and entertainment companies, but also by individuals who have
cameras and home video production facilities.

As display prices drop, every available surface,
from coffee shop tables to umbrellas, will become a video screen for
advertising and content. In time, e-paper, which is foldable or
rollable, and can be instantly updated with the latest news or video,
will begin to supplant print magazines and newspapers.

Strategic questions: How can you leverage your
presence in devices to content distribution or vice versa? How will you
participate in the massive boom of video content demand?

Globalization and Localization

Online distribution means that any media can have global access.
There is some content that is of truly global interest, such as
celebrity news, some business and financial news, specialist topics,
and some entertainment. This content can basically be produced
anywhere, so expect to see global media content begin to be produced in surprising places.

Yet much content requires localization
witness how often TV series are re-produced for different nations, let
alone how much syndicated news is adapted locally. Some news,
entertainment, and media is purely local in interest, but in many cases
broader-interest content requires localization.

Aspirants to global media positioning will need to understand and invest in the process of content localization.

Strategic questions: How global or local in
interest is your current content and distribution? What degree of
localization is required in content, format, and distribution, and what
capabilities or alliances are necessary for this?

Intellectual Property and Media

The Future of Media Strategic Framework is released under a Creative Commons Attribution-ShareAlike 2.5 License.
This means that while Future Exploration Network retains copyright you
can use it – even for commercial purposes – as long as you
attribute it to the creator. It also means, that if you think it should
be different or want to improve on it, you can do so as long as you
release it under the same license – feel free to do so!

There are a plethora of dilemmas and thorny issues for media
organizations to resolve in how they protect their own content, as well
as license user-submitted content.

Locking content down will in many cases prove to be less valuable
than allowing it to be reused appropriately by other content creators.
A living content landscape benefits content creators far more than a
rigid world.

Strategic questions: What licenses do you offer
for user-submitted content? In which situations should media-generated
content have Creative Commons or similar licenses that allow reuse and
adaptation?

Overall Questions on the Future of Media Strategic Framework:

Where across the strategic framework are you currently playing (content/ formats/ revenue/ distribution)?

How can you leverage your current presence into new domains?

What partners or alliances do you need to generate the most value from your existing capabilities?

Future Exploration Network is organizing the Future of Media Summit,
which will be held simultaneously in San Francisco on July 18 and
Sydney on July 19 to explore the evolving world of media. In
preparation for this, Ross Dawson and his staff have prepared what you
have read above: The Future of Media Strategic Framework.

The intention they had was to provide a framework and starting point for useful discussion before, during, and after the Future of Media Summit event.

According to the author, this first edition is by no means
comprehensive, but rather a work in progress project to pull together
in a coherent way some of the key themes, how they relate, and the
strategic questions that media organizations of all kinds need to start
considering.

The Future of Media Report, which will be produced just before the
Summit, will be made available to all Summit attendees in both Sydney
and San Francisco and it will include research comparing US, UK, and
Australian media markets across traditional and social media, major
trends in media, and more.

About the author
Ross Dawson is a strategy consultant, keynote speaker, and bestselling author. He is CEO of consulting firm Advanced Human Technologies,
based in Sydney and San Francisco, and Chairman of Future Exploration
Network, a global events and consulting firm specializing in the future
of business. Ross Dawson is also the author of the Amazon.com best
seller Developing Knowledge-Based Client Relationships, as well as of the more recent book entitled Living Networks.