In the Future of Media Report 2007 we included a quick overview of eight major developments in the global media industry in the year to July 2007, with prominent examples of each. Full details in the report. Developments continue apace – we’ll be keeping track…
Continuing our series of excerpts from the Future of Media Report 2007, in this post we will cover the Fastest Growing Online Properties, which features some of the research done by Nielsen//NetRatings for the Report. The relevant data and commentary from the report is below – click on any of the images below to get the complete Report with full details.
One of the great things about having Nielsen//NetRatings as a research partner for the Report is that we were able to bring together global data in new ways to provide original research and insights. There are some very interesting perspectives that emerge from the differences in how new media properties are taken up across countries.
The US leads in usage of all leading social networks. The pace of growth in UK and Australia is extremely high, however they still signifi cantly lag the US in terms of breadth of usage. MySpace is the incumbent globally in terms of market presence. Facebook began as a US college-only social network, however since opening to other users has had strong international as well as domestic uptake. Opening up the Facebook platform to thirdparty developers in May 2007 has contributed to phenomenal global growth as consumers integrate increasingly more interactive tools.
There is much excitement at the release of private equity firm’s Veronis Suhler Stevenson’s new measures and prognostications on the media landscape, with most commentators focusing on their prediction that Internet advertising revenues will exceed those for any other media form by 2011.
The single thing I find the most interesting in the report is the different paces of growth across different media users. “Consumer” usage of media is actually DOWN 0.5%, driven by shifting from long-format media such as TV to short-format media such as online news and video. In contrast, “Institutional” usage of media (comprising business, education and government) is UP 6.9%, outpacing the increases for “marketing” and “advertising”.
I have long said that we are moving to a world in which ALL BUSINESS IS MEDIA, and that is supported by these trends. Almost all of what businesses do today is gather, process and disseminate information or knowledge-based products, making what they do essentially a media business. This is reflected by a massive 7.4% difference in the growth trend in consumer versus institutional use of media.
The second key aspect to pick out of the report is the 6.8% total growth in spending in media over the last year. While global GDP growth for 2007 is forecast to be 4.9%, suggesting just a 2% outpacing of the rest of the economy, this masks the fact that media is heavily overrrepresented in the US, which accounts for 42% of media globally, where the GDP growth is expected to be just 3.3%. In other words, a very rough view suggests that media will double it’s share of the global economy in around 25 years or less. This just happens to be the figure I’ve been quoting for some time, so we seem to continue to be on trend for this.
I just found this detailed review of the Future of Media Summit 2007 written live by Sue Kirkland Smith, Lloyd Grosse and Sarah Creelman of Public Relations Institute of Australia.
It contains a detailed review of every panel session, and concludes by saying:
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”.
It’s well worth reading the entire post – there are many great insights and nuggets from the Summit there.
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.
(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.
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.
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.
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:
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!
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.
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
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:
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!
