The days of mass media are over

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Are mass media dinosaurs, or rock-solid incumbents that will still rule the roost for decades to come? I was asked to write the “Yes” case to a debate featured in the December issue of Marketing magazine on “Are the days of mass media over?” Below is my case – remember that as a debater you have to take an extreme view! Unfortunately I can’t republish the “No” case, written by John Sintras, COO of Starcom Worldwide, however you can probably imagine what a large media buyer would say on the topic…

Are the days of mass media over? YES!

The days of mass media are numbered. We are rapidly shifting into a world of highly targetted media, distributed over a multiplicity of new channels. The bastions of mass media as we know them – free-to-air television, AM and FM radio, and newspapers – will still exist, but not in the forms we currently know them. In order to adapt to the winds of change, they will have to shift so they are no longer true “mass” media.

The first nail in the coffin of mass media as we know it is the proliferation of new distribution channels. In particular Internet Protocol, or IP, provides an almost infinitely flexible platform for distribution of content in any form. As consumers get wide bandwidth Internet access both to their computers, TV, and game consoles in their homes, and to their mobile devices wherever they choose to roam, they will be able to tap into any content they wish.

Legislation in almost every country in the world currently provides strict limitations on how TV and radio electromagnetic spectrum can be used. That archaic legislation can be transcended simply by distributing content over IP, a domain which legislation will never be able to fully control. We can already access news, radio, video, or anything else we want, from anywhere on the planet.

Telecoms firms are eager to provide great media content to their mobile phone customers. While the screens of mobiles are too small for viewing most video, these will be swiftly supplanted by new technologies. Video glasses provide quality video viewing anywhere, anytime, even while you’re walking or doing other activities. I virtually never watch TV, but I frequently watch programs on my video glasses. E-paper allows us to unfold or unroll large screens that can be kept in our pockets. We can read news or watch entertainment as and when we please.

The real death-knell for mass media as we know it is advertisers’ desire for targetted advertising with measurable outcomes. Broadcast is an extremely apposite moniker – it throws its net widely, and catches many unappetising and worthless fish for every one that is potentially of value. Moreover, you have no idea what you have caught or even whether you have caught anything. For advertisers, this is extremely wasteful. New media distribution technologies allow advertisements to be shown only to those who are likely to be interested, and then allows immediate interaction. A conversation and a relationship is created. Mass media affords no true relationship with the audience. The rapidly eroding value of sending undifferentiated message to millions means that mass media will rapidly fragment, and the majority of content will be distributed through direct, immediate, targetted, interactive channels.

Reflections on revisiting Japan

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Just back from Japan. The highlight of our two week trip was three days spent in Takaragawa Onsen, which has to be one of the best of the hundreds of hot springs in Japan. It claims to have the largest rotemburo, or outdoor hot spring pool, in the country. It snowed continuously for our three days there, allowing us to bask in the beautiful warm hot water at night and watch the snow quietly cover the mountainside. The cold of the snow on our heads perfectly matched the warmth of the volcanic water gushing out from the hillside. There are few more special experiences. Baby Leda loved it too.

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We spent most of our time in Tokyo. The most striking feature of returning to Japan for me was the refound feeling of affluence after the “lost decade” of no economic growth from the early 1990s. New buildings have sprung up around the Roppongi area and on the city’s fringes, there is continuing land reclamation in Tokyo Bay, and shoppers are busy at upmarket shopping complexes in Omotesando and elsewhere. Yet despite increasing Westernization, Japan still seems not to have changed that much. It is easy to imagine that Tokyo will look and feel much the same in a couple of decades from now. Japanese culture will continue to be passed down through generations. Certainly the structural rigidities of the business system seem barely to have loosened, leaving it indeed largely the “old boy’s club” that Takafumi Horie of livedoor infamy claims it to be. Yet there continues to be world-leading innovation in some areas of technology and business processes. As I’ve written previously, the key challenge for Japan in coming decades is its rapidly falling population, and whether the pace of advances in automation will compensate for this.

Another striking aspect was the massive amount of content produced. Manga and anime are estimated to represent a $6 billion global market, much of it in Japan (where manga represents 40% of all book and magazine publishing), but also with broad international distribution, notably in the US. Magazines are still a flourishing market in Japan. While much Japanese content produced is only likely to be consumed locally, it has already been highly influential on Western culture, and we can expect to see more content repurposed for international consumption. Internet access is a standard feature of mobile phones and plans in Japan, and with speaking on phones discouraged on the trains and subways, many play games or access information on the Net. The early success of DoCoMo provided a platform for a truly wireless culture. While the complexities of Japanese written language were an early drag on the implementation of information technologies, Japan is now as digital as any country. Japanese claim their country and culture to be unique, and they have a good claim to that. Yet Japan will have to balance integrating further with global business in an increasingly interdependent world, at the same time as it retains its extraordinary culture.

Media and advertising will be everywhere

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“Add this to the endangered species: blank spaces,” opens an article in today’s New York Times on pervasive advertising. Some of the innovative ways it mentions in how advertising is filling the blank spaces in our environment include:

* Eggs in supermarkets are being stamped with CBS TV show titles

* US Airways airsick bags and seatback trays

* Chinese food cartons promoting Continental Airways

* Examining table covers in doctor’s surgeries

* Video screens in taxis

* Turnstile gates

* Interactive floor displays that respond to people walking on them

* Toyota and Unilever projecting ads on building sides

* Dry cleaning bags

Absolutely. This is how we described Media is Everywhere, one of the five ideas transforming media that we included in our Future of Media Report 2006:

In the future everything from walls and table-tops to cereal packets and clothes will be screens and video will be everywhere. E-paper will add video and audio functionality to the formerly static pages of newspapers, and books will play commercials for the author’s latest novel. If the advertisers have their way, there will be no respite outside your front door.

Implications: Consumers may respond aggressively to the commercial invasion of public and private spaces. Devices such as TV-B-Gone will be used to shut off or shut out clutter.

Opportunities: Getting messages closer to consumers. For example, since 70-80% of purchasing decisions are made in-store, ads will be in shops and malls rather than on TV at home. Producers of quality video content will reap a bonanza.

Of course there will be pushback from consumers and local government. But within whatever boundaries are created, there will be more experimentation, especially in micro-spaces, which will gradually be filled with moving images. And in time we will grow to accept media and advertising being literally almost anywhere we turn our attention.

Happy holidays! Off to Japan…

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Tomorrow I head off to Japan for two weeks with my gorgeous wife Victoria Buckley and lovely four-month old daughter Leda. I lived in Japan 1991-94, and while I returned regularly for a while, I haven’t been there for over six years now. It will be great to get back and see what’s changed, particularly on the social and technological fronts. Japanese social and business structures have been shifting rapidly since the Japanese bubble burst in the early 1990s, yet much of the old systems still remain. When I lived in Tokyo, among other roles I was Tokyo Bureau Chief for Thomson Financial, where we were reporting on the early phases of the transition that is still under way. Much has unravelled, and there is far more to go. The next decades of Japanese history will be fascinating. I am also very much looking forward to reviving my Japanese language. I devoted much of my energy in the time I was there to studying Japanese, and I found real delight in the magic of the language. However it has gone pretty rusty, especially my reading, so hopefully I can bring it back to business-level standards, though I suspect that will take a little more than a two week holiday.

Don’t expect any blog posts while I’m away (unless I get massively inspired), but I will report on my impressions when I’m back. I have been frustrated through most of this year as I’ve attempted to capture on this blog a little of what I’m seeing and thinking about. For me, client work ultimately takes priority, and I have had a very intense schedule for the last few months particularly. There has been much I wanted to write in this blog but never got to. I still have a backlog of a dozen posts or so on media coverage, speaking gigs etc. which I wanted to comment on and have not yet managed. I definitely want to pick up the frequency of my blog posts next year – it is a high priority for me. But it does depend on what other pressing things I have on my plate. No doubt 2007 will be an exciting year – I’m looking forward to it… after a good break. Have a fabulous new year, and best wishes for 2007!

Trend map for 2007 and beyond

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Given it’s festive season now, it’s probably time for a bit of fun. Nowandnext.com and Future Exploration Network have collaborated in producing a map of major trends for 2007 and beyond, across ten segments: society & culture, government & politics, work & business, media & communications, science & technology, food & drink, medicine & well-being, financial services, retail & leisure, and transport & automotive. Click on the map below to get the full pdf.

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Trend Blend 2007+ map

Inspired by the subway map for a well-known city, the map shows some of the major trends in each of these segments, as well as the key intersections between the trends. Have a browse through to see some of the more interesting trends in the landscape. And please don’t take it too seriously…

As with most of our content, this is released on a Attribution-ShareAlike Creative Commons license, so if you disagree with the trends we’ve chosen or think you can improve on the map, please take it and run with it!

Our clients will get a glossy pinup of the map, and if there’s enough demand we’ll release a T-shirt….

Fabulous festive season to all!

[UPDATE:] MindShare Asia’s unofficial blog, The Big Swifch, has called this “The world’s best trend map. Ever.”, and relates it to Edward Tufte‘s work. Thanks James! He also says he’s considering doing something similar for media/ marketing trends in Asia. Look forward to it!

Speaking about corporate innovation and the future of business

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Cameron Reilly of The Podcasting Network fame has just interviewed me for his podcast series G’Day World. The podcast is available here. Some of the things we talked about were:

* How senior executives think – or don’t think – about innovation.

* The balance of innovation across large organizations and start-ups.

* Open innovation approaches for large organizations.

* Where media will look like in 10 years, including the spectrum of media, massive fragmentation, and new funding models for content creation.

* Transcending the mouse and keyboard in user interfaces.

I’ve been under the gun with some intense client deadlines for a few months now, so I have a backlog of at least a dozen blog posts I want to do and have not managed to get done. One of these is a quick debrief from when Cameron and I caught up for coffee in Melbourne recently. Hopefully coming soon…

Journalists get outsourced too

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Journalists love stories about the latest jobs to get sent offshore. Sharp political debates are launched, fears ignited, and community discussion engaged. However today the story is also about journalists themselves. As described in a recent article in the International Herald Tribune, journalist jobs are increasingly being sent offshore. In the first instance, “back office” roles such as graphic design, photo editing, proofreading, ad production, and layout are now commonly going outside newspapers’ walls, sometimes locally, and often to India or other low-cost centers. However now, journalist positions too are going overseas. Reuters’ Bangalore office now employs some 1,600 people, including 100 journalists covering US stories. The UK’s Daily Express has outsourced its city business section, in the end going to a local association, though it also considered Indian options. Other newspapers are experimenting with using offshore reporters in a variety of guises.

The outsourcing of journalism is of course hardly new, with stringers and freelance contributors providing content since the birth of print media. Only a handful of publications globally have the scale to employ journalists in all major countries and across all news segments. One of the key differences today lies in the intensified cost pressures on media, driven by the loss of classified and advertising revenue. Already an increasing proportion of newspaper content comes from newswires and other external sources. Connectivity makes it easier to distribute processes such as photo editing, sub-editing, and layout across locations and timezones. The latest shift is to having local stories written by people in distant locations. Hard business stories can often be written by non-locals. Communications costs for doing interviews are negligible, while labor costs can be slashed. All of these trends are mirrored across other industries, where lower level functions are getting outsourced, and those remaining must demonstrate that they create unique value. A newspaper will always need editorial staff, and regular writers who can attract recognition and an audience from readers. Many other functions currently done in the newsroom will find homes outside the organization. Some will go too far, and jeopardize their editorial quality (beyond that from the steady reduction in headcount over the last years). Yet, like it or not, the process of gathering, analyzing, commenting, and editing news will increasingly be distributed beyond the traditional media organization.

The promise and challenges of South Africa

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I’m currently in Johannesburg, just back from two days in a game park, where one of my clients was holding a board strategy offsite. Here many of the contrasts of a country still in transition are evident. Nelson Mandela came to power in 1994, taking the nation from a history of apartheid into a new-found democracy. The country has come a tremendous way. The economy shrank consistently for the last 12 years of apartheid. Economic growth this decade has stayed close to 4%, with a recent revision suggesting the current growth rate is around 5%. While this is still not high for a developing country, it has helped support the emergence of the so-called “black diamonds” – middle-class blacks with disposable income and inclined to spend. Yet inequality remains enormous. A select few have gained enormously through black economic empowerment programs, yet with an unemployment rate of around 25%, many are not seeing the benefits of change. Violent crime has surged over the last 6 months, fed by an influx of battle-hardened former soldiers from across the continent. My driver from the airport showed me his bullet wounds from when he was recently carjacked. The HIV/ AIDS situation is dire, with official figures suggesting over 30% of pregnant women have HIV. Broad dissatisfaction is fueling populist politics and a powerful communist party. There is the real potential for a shift in power that will result in an undoing of much of the last decade’s economic reforms.

So while there has been a world of change in the last 13 years, South Africa is still in the midst of a transition which has a long way to travel. There is tangible excitement about South Africa’s hosting of the World Cup in 2010. The infrastructure development required will boost the economy and employment. More importantly, there will be tremendous pride in being the global center of attention. Connectivity is a major part of the story. Owning a mobile phones is now considered essential, with the poor not forgoing cell phones, but being prepared to spend 25% or more of their income on phone bills. As I’ve written earlier, mobile internet will be the foundation for connectivity for the entire continent. The potential of the country is immense. I hope that promise is fulfilled.

Open source spying and blogging for intelligence agencies

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Spying ain’t what it used to be. The latest issue of the New York Times magazine sports a very interesting in-depth article titled Open Source Spying. The piece examines the potential of emerging technologies such as blogs, wikis, and other social software to improve how intelligence agencies function. However the key point that emerges is that intelligence agencies are currently very poor at tapping approaches that require a more open and less linear mentality. John Arquilla, a professor at the US Naval Postgraduate School, summarizes the bureaucracy and rigidity of US intelligence analysis:

“Fifteen years ago we were fighting the Soviet Union,” he said. “Who knew it would be replicated today in the intelligence community?”

I have written repeatedly before about the rise of “open source intelligence” and how social network analysis tools are being used in the intelligence community. One of the most fundamental shifts over the last decades is the far greater availability of information (ranging across billions of websites, untold mobile camera photos, commentary and insights from millions of subject experts, through to the powerful purvey of Google Earth). For intelligence agencies, this dramatically shifts the central issue from gathering exclusive information, to making sense of an almost infinite amount of data, which is available to everyone.

The emergent properties of an effectively integrated community of blogs and wikis mean that the most relevant and important information floats to the top. These kinds of capabilities must be tapped by intelligence operations in order to filter and assess what is worth responding to and raising to the executive level. Linear report writing, editing, and escalation doesn’t have a hope of working effectively in this environment. Andrew McAfee of Harvard Business School, the most prominent apostle of Enterprise 2.0, has written a thought-provoking blog post about the New York Times article, drawing out the deep commonality of the issues facing both intelligence agencies and corporations in implementing social software across organizations. It is certainly clear from the article that there are serious efforts across America’s army of intelligence agencies to tap these tools. However these initiatives are constrained by lack of collaboration between the agencies, and senior executive fears and lack of understanding. The shift of intelligence to using vast troves of newly public (as well as covert) information is not a trivial issue. Terrorism is a peculiarly networked and emergent phenomenon which requires similar approaches to contain it. On the other hand, as intelligence efforts improve, privacy is superceded for everyone, not just those targetted. Chris Anderson of Long Tail fame draws out the potential for radical transparency to mean not just spooks, but in fact everyone, uncovers and analyzes critical information. That’s absolutely the long-term trend, though it will take a rather long time to unfold given the current people in power.

Sydney goes for municipal WiFi

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The NSW premier has announced that Sydney and other regional cities in the state will get free WiFi in their central business districts in the next three years.This is great news for those in Sydney, especially since Internet Service Providers in Australia are not the best at providing plans at reasonable prices, with low broadband download limits (sometimes 100MB per month!) a dirty eccentricity of the local industry for many years now. Yet go to the WiFi Networking News blog, and in its daily Metro roundup there are four announcements about municipal wireless availability around the world on the same day, including a PR firm providing free WiFi throughout Leicester Square in London. On a global level, the free municipal wireless trend is strong and rapidly building momentum. So what are the implications for telecommunications firms (among others)? Last week a highly-quoted piece in the New York Times on mobile phones with WiFi capabilities discussed how free WiFi will allow mobile users to cut out the mobile phone companies completely and speak for free. In fact, there are many restrictions, including the limited coverage of even the broadest free WiFi initiatives, and even more the very high battery drain of WiFi devices, which allow only fairly short speaking time on mobile phones. However there is no question that initiatives like Sydney’s municipal WiFi will cut out many revenue opportunities for telcos that are still striving to squeeze money out of their customers. On the other side is the far more important issue: individuals and businesses will be vastly enabled in connecting, creating, and tapping new opportunities. This is an exercise in unleashing the potential of connectivity. It’s an important step forward for Australia, which is at best in the second tier of developed countries in terms of its mobile and Internet connectivity.