Global comparisons: Why bandwidth drives Internet participation

One of most interesting snippets in the Future of Media Report 2007 was a chart showing the relationship between bandwidth speed and time spent online across a number of countries, in the second diagram below. The data supporting these charts was provided by Future of Media Summit Research Partner Nielsen//NetRatings, which was able to provide original and valuable insights by drawing on its global coverage.

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(Click on the images for full details in the Future of Media Report 2007)

As the first chart shows, the proportion of people with access to so-called “broadband” (in this case meaning anything other than dial-up) is consistently high across nations. However the speed of Internet access varies substantially, by a factor of almost five across the countries covered. The second chart shows an unambiguous correlation between bandwidth and time spent online, underlining the debate in Australia and other countries about the impact of low bandwidth Internet access. Demonstrably, low bandwidth Internet means people use it less, and for a narrower range of applications (there is specific data on that).

My comments in the recent Sydney Morning Herald article on why blogging is so behind in Australia have attracted significant attention. In particular, a number of people (e.g. Gavin Heaton, Mark Aufflick, Meg Tsiamis) have questioned my assertion that low bandwidth impacts blogging activity, given that blogging is a low bandwidth activity – it is after all mainly text. The reality is that people if something is easier to do, they spend more time doing it, explore further, try different things, get engaged more, and are far more likely to actively participate. If you’re a keen blogger, it makes no difference. If you are someone who may be interested in blogging, but because spending time online is not a great experience you don’t discover the power and potential of participating yourself, you’re less likely to do so. The evidence in the data above is there for anyone who doubts what appears entirely obvious to me.

Of course bandwidth is far from the only issue at stake here. I’ve written before about the challenges of building a distinct English-language blogging community that doesn’t get absorbed into the global blogosphere. Meg adds further thoughts on what’s happening and how to build a national blogging community. I do believe that as a society, some introspection is required as to why we aren’t engaging as well as we could with the transformative potential of a connected world. This is a fundamentally important issue.

Are virtual worlds an over-hyped waste of time for marketers?

Below is a short piece I wrote for Marketing magazine on the topic of “Are virtual worlds an over-hyped waste of time for marketers?” Four other people also contributed, including executives from Sulake (creators of Habbo Hotels) and Naked Communications.

If marketers have a time horizon of 6 months or less for their employers’ success and their own careers, then virtual worlds are in many cases an over-hyped waste of time. Online spaces such as Second Life, Entropia, World of Worldcraft and many others are now a significant phenomenon. However this is just the beginning. Online interaction began on bulletin boards, then shifted to Internet browsers. The next phase will allow people to immerse themselves completely in online worlds. Eventually the experience of interacting online will be difficult to distinguish from real-world interaction, and be used extensively in our work and play.

There are three reasons why marketers would want to get involved in virtual spaces now, when they are nascent, rather than waiting until the majority of the most attractive consumers spend significant time there.

1. Lead consumers and influencers are already heavily involved in virtual worlds such as Second Life. If you want to access or learn from the most interesting, influential, exploratory people around, there is no better place to go.

2. By being active in Second Life, you demonstrate to your clients that you understand the leading edge of where society and marketing are going. (Of course if you don’t understand that this is the case, then don’t bother.)

3. By exploring and engaging in virtual worlds, including trying out marketing campaigns, you will discover – and in fact create – the best ways to get results in this booming new domain.

If you don’t believe that virtual worlds will be a significant part of how people interact and engage in the future, stick to what you know and don’t waste your time. If you recognise the potential then get involved now, forge a path in this new space, and leave the others behind.

Engaging people rather than advertising in virtual worlds

I’ve had several media appearances lately on marketing and advertising in virtual worlds, including writing a short piece in Marketing magazine on “Are virtual worlds an over-hyped waste of time for marketers?”, and a recent interview on an ABC TV program. The ABC TV segment was largely about billboard advertising, so I showed the TV crew billboards in Second Life, Habbo Hotels and Coke Studios for them to film for the program and to go along with my interview. The thrust of the TV segment was that you can’t escape advertising, even in Second Life. Another person they interviewed on the show said that it could backfire to advertise in virtual worlds, since people want to escape to somewhere different. However I think people implicitly understand that something they get for free has to be paid for somehow. As I’ve written before, some people will choose to pay to avoid advertisements. The TV crew managed to find a real-world version of a Telstra billboard I showed them in Second Life. While Telstra BigPond Managing Director Justin Milne gave the party line in his interview on the TV program, I doubt he was happy that I was wearing a free T-shirt with advertising from Deutsche Telekom as I guided the TV crew around Second Life.

However I’m hardly a major proponent of advertising in virtual worlds, and I think the TV program was starting from a misguided premise. Given that advertising – in the sense of annoying people with messages – is getting less useful wherever it’s done, it’s hardly any better in a virtual world. Marketing, in the broadest sense, is a completely different matter. It is far easier to engage people in meaningful ways in an interactive space. You can create experiences that people respond to, learn from their responses, change what you do in real and virtual worlds, and build both brand and relationships over time. That is just part of the power of being involved in virtual worlds.

Why less blogging is a matter for national concern

A feature article by Graeme Philipson titled The Lost Art of Blogging in the Sydney Morning Herald last Tuesday covered some of the analysis I released before the Future of Media Summit, comparing Australian blogging behaviors compared to the rest of the world.

The article quotes me as follows:

“Of the top 25,000 blogs globally, around 9000 are in English”, says Mr Dawson. Of those, only 75 originate in Australia. But there are 420 million native English speakers in the world. “With Australia’s population of 21 million, we comprise 5 per cent of English speakers. But with 75 blogs out of 9000, we comprise less than 1 per cent of English blogs. We are underrepresented by a factor of six or so.”

“I think one key reason is lack of bandwidth in Australia, and of its high cost. Australian internet connections are slower than they are in the rest of the world, and Australia is almost unique in capping usage at quite low levels.”

Read more

Future of Media: Panel discussion on emerging business models

A quick review of the first cross-continental panel at the Future of Media Summit 2007, which was on Emerging Business Models, featured Keith Teare, CEO of edgeio, Anne-Marie Roussel, Director – Stategic and Emerging Business for Microsoft, Chris Gilbey, CEO of Vquence, and Rob Antulov, CEO of 3eep. A few reflections on the discussion (from memory, so please excuse misquotations :-) ):

One of the themes of the discussion was whether business models are changing. Rob said that after much consideration, he’d decided that there were no new business models: the three that continued to exist were 1) customers paying directly for your content; 2) a third party paying to be associated with or incorporating your content; 3) third parties paying to distribute your content. Keith in particular disagreed, noting the new approaches possible through social media. Edgeio’s business model itself suggests new possibilities for intermediating value. Chris, a doyen of the music industry, said that it is moving to a point at which it is no longer possible to monetize music directly. Consumers are no longer prepared to pay for music, so advertising or other indirect revenue models are becoming essential. Anne-Marie talked about the web as a basis for social entertainment. People are primarily influenced by their peers in buying entertainment, and it is now possible for people to buy from or through their peers. Keith used the phrase“selling content through peer relationships,” noting that edgeio will shortly release tools for monetizing sales of content through third-parties.

Read more

Media and blog coverage on Future of Media Summit

The Future of Media Summit has received a stack of coverage in print media, including all of Australia’s major broadsheet newspapers featuring various aspects of the event:

The front page of The Australian’s weekly Media & Marketing section had a large piece titled Internet TV Push ‘Unstoppable’, drawing on commentary at the Summit.

The Sydney Morning Herald had a long piece on The Lost Art of Blogging discussing my research and commentary on the blog space – more on this article soon.

The Australian Financial Review had a feature article on the discussion about micro-payment on the Emerging Business Models panel (the article is not available online).

Communications Day featured extensive coverage of the panel discussions on mobile media and user generated content.

For blog coverage of the event, the best starting point is the Future of Media Summit participant blog, where quite a few speakers and attendees have already blogged about the event. Both on the Summit blog and elsewhere, there has been some great commentary in particular from:

Noric Dilanchian

Chris Gilbey

Stuart Henshall

Brad Howarth

Nichole Kahn

Hugh Martin

Phil Sim

Other great pre-event content on the Summit blog from speakers includes insightful comments from Dan Fill, Laurie Lock Lee, Mark Pesce and others.

Let me know if I have missed some interesting media and blog coverage. If you were there, please add your thoughts and reflections on this blog!

Key elements of media business models

In the lead-up to the Future of Media Summit 2007 held in Sydney and San Francisco next week, we will feature some excerpts from the Future of Media Report 2007, recently released to accompany the event.

In this post we will cover the Key Elements of Media Business Models frameworks which are the centerpiece of the Report. The centerfold image and commentary on each of the four elements of the framework is below – click on any of the images below to get the Report with full details.

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Below are the frameworks and commentary for the four elements of the media business model framework:

* SCALING OF BUSINESS MODELS

* VALUE IN CONTENT PRODUCTION AND DISTRIBUTION

* DRIVERS OF VALUE OF ADVERTISING

* MEDIA PERSONALIZATION

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SCALING OF BUSINESS MODELS

The emergence of the long tail has created a complete spectrum of media of different scales, from the mass media at the “head” of the curve, through mid-sized professional publishing at the “shoulder”, and on to an extended “tail” of micro-media outlets, each with small audiences. Media have significantly different characteristics along the curve, leading to a variety of business models and approaches to scaling businesses. Characteristics that differ include:

Read more

Thoughts on user generated content meets mainstream media: Scott-Bradley Pearce, CNET

As part of the lead-up to the Future of Media Summit 2007, I did a video interview with Scott-Bradley Pearce, who is Strategic Adviser Content Syndication and Multimedia, CNET Networks Australia. Scott-Bradley will be speaking at the Summit on the User Generated Content Meets Mainstream Media panel, on the Sydney side of the event.

The video interview covers issues including:

* What kinds of media organizations are best positioned to take advantage of user generated content

* Legal and other issues in using user generated content in mainstream media

* Global and Australian trends in the media landscape

Lots of interesting ideas here!

Launching the Future of Media Report 2007!

The annual Future of Media Summit held simultaneously in Sydney and San Francisco (the Future of Media Summit 2007 is on next week) is as much about providing new content, research, and insights as it is about an event. Last year the Future of Media Report 2006 certainly succeeded in its objective of sparking debate and discussion on the future of media, with over 70,000 downloads, commentary generated in seven languages from over 20 countries, and use of our content in magazines across three continents and in at least one government submission on the future of media.

This year we are following the example of last year, creating an entirely new report that looks at different angles and perspectives on where the media landscape is today and where it is going. The Future of Media Report 2007 is now officially launched – download it here.

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Future of Media Report 2007

Some things you’ll find in the report:

Eight Developments in Media July 06 of June 07. Examples of key developments, including industry transactions and acquisitions, layoffs, new channels, intellectual property, and consorship.

Shifting Global Advertising Channels. Data and commentary on shifts in advertising spending, and a comparison of ownership of the online classifieds segment in the US, UK, and Australia.

Comparison of Fastest Growing Properties and Internet Access. Exclusive original research from Nielsen//NetRatings, comparing uptake of new media properties in the US, UK, and Australia, and different online browsing behaviors across nations.

Key Elements of Media Business Models. Following the extremely popular Future of Media Strategic Framework from last year, we have created four complementary frameworks looking at Scalability, Value of Distribution, Value of Advertising, and Media Personalization. These can be applied to understanding emerging media business models. Each of the frameworks is explained in detail.

Media Industry Network Analysis. An analysis by Laurie Lock Lee of the recent acquisition of Southern Broadcasting Corporation by Macquarie Media Group, and insights on the impact on the Australian media industry landscape.

Media Transactions. A list of media mergers and acquisitions of at least US$1 billion over the last 15 years, putting the massive surge in recent media industry activity into context.

Download the complete Future of Media Report here.

Please feel free to pass on word or comment. As with all our work, the Future of Media Report 2007 is released on a Creative Commons license, which allows anyone to post it, use it and build on it as they please, as long as there is attribution with a link to the Report on this site or to this blog. The framework is intended to be a stimulus to conversation and further thinking, so if you disagree on any aspect, or think you can improve on it, please take what is useful, leave the rest, and create something better!

We’ll be releasing parts of the Future of Media Report separately over the next days and weeks.

Attendees at the Future of Media Summit 2007 in Sydney or San Francisco get a very nicely printed copy of the Report, so get along! Hope to see you there.

The Imperative of Service Delivery Innovation

Service Delivery Innovation will be a critical theme for professional service firms over the next five years. Technology reconfiguration, the use of global talent, and changing demands from local and global clients all contribute to the necessity of finding new ways to deliver services. While commoditization is a reality that must be addressed in how professional service firms function, being able to bring the best possible resources to create unique solutions for clients means premium pricing will absolutely still be possible.

SAP recently engaged me to write a White Paper and speak in a webcast on Service Delivery Innovation. The webcast is primarily for the US market, on July 12 at 1-2pm Eastern Time. Description as below and contact details for registration on the SAP website.

At this informative Webcast, you’ll discover how a service delivery innovation program can help you improve service quality, boost innovation, increase efficiency organization-wide, establish internationalized systems and processes, and collaborate with services and materials partners. And you’ll get unique perspectives from Ross Dawson, CEO of Advanced Human Technologies and bestselling author of Living Networks.

The White Paper on Service Delivery Innovation is not yet launched. I’ll post details on this blog on how to get the White Paper when it is out.