News
Report from the the Future of Media 2007
Wed, Jul 18 2007
Welcome to Sue Kirkland Smith, Lloyd Grosse and Sarah Creelman's live report from the Future of Media 2007 Conference. This report was developed live on the floor of the Sydney leg of the Future of Media Conference 2007. Find out more about the event here First up was Hugh Martin GM APN Digital Australia who introduced the structure of the day and presented the Future of Media 2007 report.
8:45am started with a panel discussion. based in Sydney and chaired by Brad Howarth Lagrange Communications, with Scott-Bradley Pearce CNET, Tony Surtees, CEO Prime Digital Works and Dan Fill, Head of Multiplatform Production, ABC TV. McKinsey Research finds that the the most effective way of keeping users coming back to your site is to engage interactively with them. User created content is now an engagement strategy. CNET earns a living from online interaction: - Credible content (by correspondents) is 50% and the other 50% is peer reviewed content of that initial content. Challenged about why keep journalists on to provide the credible content - Trust is the main problem with going completely to user generated content. Peer reviewed content balances the content. Journalistic Credibility - how do you maintain it and not be influenced by Corps and lobbyists? How do you monitor and maintain? When infiltration happens - you would be amazed about how intensely the users are watching and are policing credibility. If content is manipulated the manipulator comes out looking really badly. If you are involved with media that has user engagement then you must understand that it is a wild place that has developed processes to ensure credibility. Sometime soon the novelty of user generated content (UCG) will wear off and users will want to be paid for content. There is enormous hype about this space – example: YouTube has 100 million downloads in the last year downloads versus $14 million advertising revenue. The view of UGC being inexpensive to run interactive content - is a myth – cost of server load and cost of moderators can sometimes be more expensive. About copyright content - the Millennium Copyright Act states that that uploaded content is the responsibility of the individual that uploaded and platforms cannot be held accountable. Discussion on Creative Commons - case study on independent music scene - artists are making money out of concerts and the music is classed as a giveaway. Myspace and Youtube are extremely successful in this space. The economics have changed to a model where you have people creating content, those who consume it and all those in between are now incidental - much to the record labels detriment. Web 2.0 is moving the environment from hundreds of markets of millions to millions of markets of hundreds and this has changed the value proposition. Today consumers are 5 times more likely to purchase a product if you are referred by a peer than if you get that information through traditional channels. There is a generation of decision makers in marketing and media that need to catch up with what is going on. The economics of advertising and media consumption will force change through organisations themselves or will be taken up by new organisations. The commercial environment will drive the change.
10:00am there was a break to take up table discussions around specific topics which we will report on later. Mobile Group Particpant - key points raised.
- Mobile considered to be an important communication vehicle for future.
- Particpants felt high cost data currently being charged by carriers prohibitive to mainstream commercialisation of this technology.
- Introduction of 3G networks would provide opportunity for more real time functionality on mobile phones.
- Data costs likely to be addressed over next 12 months.
- Mobile phone new media services should focus on content that reflects phone usability and how best to drive content into this space. (How, when,where and what people use their mobile phones)
- Combine web and mobile strategies to achieve best outcomes.
- Investigate strategic alliances with other companies such as; Goggle, Yahoo, mobile carriers and Telcos.
11:00am - Exploring new business models - simultaneous presentation with Sydney and San Francisco. Presenters: Silicon Valley: Anne-Marie Roussel, Director of Strategic and Emerging Business, Microsoft Corporation; Keith Teare , CEO and Founder, edgeio corporation; Sydney: Chris Gilbey, Co-Founder and CEO, Vquence; Rob Antulov, CEO, 3eep Basically the view is that new media does not create new business models. Traditional models still hold however innovation. Simple premise there aren’t new business models out there - there are tried and true ones. There are new mechanics for generating and managing content - business models stay the same. Traditional media business model fits now that is one sponsorship/advertising potential; two there will be people who will pay for premium content and third is to sell your content. An example is that artists are finding that the value in copyright is often not in monetising it directly. Emerging ecobusiness systems - show that digital rights management (DRM) is broken and the value of DRM is in tracking where downloads are rather than monetising them through transactions. Figure out where it is going and then work out how to make money out of it. Another example is gaming - traditionally money was made from retail or subscription however there more people want to move to a pay per view/play model. Micro payments are seen as something that will be part of the overall business solution but it is important to keep the advertising function working and adding value to the advertising model to be more focussed on personalising advertising. Micro transactions can only open up the market when the platform becomes easier to work with - the existing ones have not taken the lead - eg. Proxy currencies like Lindon dollars and mobile phones credits.
11:40am - Tapping the power of influence networks simultaneous presentation with Sydney and San Francisco. Presenters: Sydney: Peter Bray, Founder and Managing Director, Clear Blue Day; Laurie Lock Lee , Partner - Optimice; Silicon Valley: Gabe Rivera, CEO, Techmeme; Mitch Ratcliffe , Founder, Buzzlogic and Tetriad. There are those who spread the word and those who inform the discussion. Loads of organisations are building walled assets – but to be effective you need to put yourself into the discussions by maintaining and fostering relationships. There are two main influence networks that are important in this space - the first is hub and spoke model where a central connector plays most important role and the second is the bridges and/or brokers model where people who bridge two schools of thought can be more influence. Read Ron Bourke’s research into Structural Holes where he argues that innovation comes from bridges and brokers rather than central connectors. The power of networks is in the bonds and creating those bonds is very difficult. Once advertising intrude on these networks the authenticity is devalued. Monetisation causes people to leave – MySpace is a good example. How do we tap the power of the networks - cash for comment doesn’t work, but the speakers have no answers about how you can do am maintain network bonds. The one consensus is that you do need to be there as early as possible. People are attached to those who are like minded. You reduce the strength of the bonds when you infiltrate it with money.
12:20pm - Global Strategies for media simultaneous presentation with Sydney and San Francisco. Presenters: Sydney: Kathryn Hamilton, Head of entertainment and lifestyle, YAHOO!7; Harold Mitchell, Chairman, Mitchells & Partners; Silicon Valley: Freddy Mini, COO,Netvibes; Jeremy Liew, Partner, Lightspeed Ventures Asia isn’t Asia it is a dozen different countries. Development in Asia is dramatic but Harold Mitchell asserted that globalisation will just not happen because of the importance of local content and local branding. Harold says that branding is vital as it will drive the advertising model which makes the system “go round”. The key to success on the internet is the already successful advertising business model and Australia has an opportunity to be in the forefront of this movement as it is one of the most creative places in the world - you can see that by our awards. The only thing holding us back is our broadband speed. Localisation has been the core of Yahoo!7’s content strategy however the development and platform initiatives originate from a global hub. Jeremy Liew led a discussion about whether the US was the best place to seed a startup. Jeremy felt that the US held economies of scale that would ensure a successful venture however Harold felt that the collapse of the US dollar and the emergence of Asia mean that Asia will move the centre of that balance. He cited South Korea’s vastly ahead of the rest of the world in connectivity which has bred digital natives and driven huge traction to new applications. Some of the fastest emerging companies are those who start their venture targeting kids and teens - e.g. Barbie World who had 5 million users in 60 days. Another example is Macau replacing Las Vegas as the most lucrative gaming city. The rest of the world will not dictate strategies in Asia as they are very much our own markets.
1:20pm - Mobility, shifting and new media channels presentation in Sydney. Chaired by Foad Fadaghi, Technology Editor, BRW; Panelists: Martin Hoffman, Chief Executive Officer and Managing Director of Loop Mobile; Mark Pesce, Founder, FutureSt Consulting; Damian Smith, General Manager - Digital, Channel 10 Apple iPhone was immediately acknowledged as being a huge buzz in this topic. There is a fundamental difference between mobile carriers and ISPs. In Australia ISPs do not have influence over content however mobile carriers are exerting major influence over what is delivered on their networks. Free to air (F2A) networks are good at sourcing, buying, aggregating original first run content and monetising it through advertising. At present mobile networks are using subscription and sponsorship to monetise their offering. However mobile will have to adopt this model at some stage too. Advertising supported models for mobile are considered problematic as mobiles are seen as personal and advertising on these personal spaces feels like invasion of privacy. Especially considering you mobile has the potential to know more about you than any other device. You identity, location and spending habits are easily captured by your mobile and GPS has made this even more sensitive. Mobile will transition smoothly into delivering our needs if it is perceived that delivering it free is “paid for” with our attention (like traditional media). “Bill shock” and share of wallet will push new business models in mobile networks. If users can get mobile services on the cheap or better free the privacy threshold will dissolve. In fact if carriers can provide great value then the cost of buying privacy rights will be pretty low. After all, your movements are already tracked hour by hour from your bill. Privacy has gone get over it! If carriers are savvy they will ensure that mobile networks are designed to allow the devices to capture information about the user but allow the user to decide what information is accessible to provide services. Advertising over the internet was first touted as being next to useless in the steam driven internet days however it is now a $31b business. The challenge is that the creative is not there yet - but advertising assets will have to do more work. The mobile should be the best place to deliver advertising and marketing strategies but no one has ever been good at developing it. Targeting is going to be more important into the future. Mobile regulation is seen as a inhibition to development. The regulation around mobile is interesting when you compare it to online - after all the laptop and mobile phone are simply different forms of input output devices doing very similar things. It will become increasingly hard to continue different regulations on both. Moderation and oversight is not on MySpace but it has to be on mobiles - that will not last.
Conclusion In conclusion the event was fantastic and really addressed a number of important issues facing the future of media. It was also great to have the experience to have the forums presented via a streamed pipeline between Sydney and Silicon Valley. I found it interesting to hear everyone talk about advertising as the great white hope. The only mention of PR was the Edelman Trust Barometer. There was no talk about how public relations or corporate relations might create a greater offer in this space. Clearly advertising has this space in its crosshairs. So many of the presenters said that the only way forward was to use an advertising business model but juxtaposed that with the assertion that users are both numb to advertising and that advertising impairs social networks. It really reinforced for me that PR needs to do more to develop thought leadership in this space. Two analogies were used that are still ringing in my ears - “the right nut for the right bolt” and “filtering the noise from the signal”.