April 30, 2007
It's always nice to see your ideas validated by the market. For two months now, the GIO team has been hearing deep dive participants in the media and content focus area talk about the value of measuring the influence of content. The idea is that even though the market seems increasingly unwilling to pay for content, there could be interesting business models that emerge if you could only determine that content's affect on the public. And now one of the first of those business models is becoming a reality, thanks to Reuters, the global news agency and GIO partner.
In the "Moving the Market" section of the Wall Street Journal today, you'll find an unassuming little story about Reuters' nascent effort in the algorithmic trading market. Algorithmic trading has been around for a while. It is the practice of using computers to act on stock trades based on predetermined factors in the market. For example, when a stock reaches a certain level, the computer automatically generates a buy or sell order, depending on what the trader has programmed.
Pretty straightforward, right? But Reuters has a new take on algorithmic trading. Leveraging it relentless coverage of the world financial markets, Reuters has developed an algorithmic trading platform that trades stocks based on the whether a company is receiving positive or negative treatment in the press. In milliseconds, the software can scan the Reuters universe of news content, determine the overall sentiment of that news towards a particular company or industry, and place trades accordingly. The company will charge between $200,000 to $1 million for the software, which will initially only scan Reuters stories, but ultimately will expand to include other news sources as well.
It is a classic example of what many in the media and content track of the GIO have been talking about. Monetizing the impact of content is an important next step in the development of the media industry. And this won't be the last business model to develop as a result.
April 24, 2007
The Voice of Youth
Now that the Global Innovation Outlook has seven deep dives on media and content under its belt (New York (2), Mumbai, Seoul, Shanghai, Helsinki, and London), it’s time to look back and take stock of what we’ve learned. We’ve got two more dives left on this focus area, the wrap-up dives in Los Angeles in early May, and we want to be sure we use that time as productively as possible.
So over the next couple of weeks, the GIO team will be condensing, consolidating, and collating the insights from the previous two months. Stay tuned for those morsels. Meanwhile, now is a good time to hear from some of our many deep dive participants, and get their thoughts on the topic of media and content.
One of the comments on my last post was that I seem to have an old media bias. Fair enough. Today we hear from the next generation. Eric Hansen is a 23-year old senior at Syracuse University. He attended our student deep dive in New York back in early March, and contributed his thoughts early and often. You old media types might be tempted to dismiss the following blog contribution as the ramblings of yet another disaffected youth. But ignore this message at your peril. This is the voice of the future:
From Eric Hansen:
In this age, there is something inherently wrong with an entertainment experience when one's favorite weekly television program is interrupted mid-punchline by a local news alert reporting that a seasonal fire has just broken — 50 miles away. In this age, there is something inherently wrong with an entertainment experience when $10 rents you an uncomfortable, unsanitary seat while you watch a screen dominated first by several successive ads and then the feature peppered with comments from inconsiderate patrons. In this age, there is something inherently wrong with an entertainment experience that short-shrifts musicians for doing something they can now do themselves, gouges consumers, and siphons innovative energies from the free-flow of information to engineering an unsatisfying drizzle.
But I fault nobody for sticking to what has worked well in the past. In fact, I believe it is more a lack of understanding than maliciousness. What I offer next is a condensed-soup version of how some rudiments from The Long Tail (Chris Anderson) and the Experience Economy (Pine and Gilmore) can foster understanding of our beloved media/entertainment industries.
Right now the value of revolutionizing the experience of watching television and movies is being ignored, judging by the way such content is being offered. The show "Grey's Anatomy," for example, is so popular that some college students factor new episodes into their class schedules. The experience of watching the latest episode with your friends and talking about what happened to Dr. McDreamy the next day is something you can't get by TiVo-ing the show for consumption days later. On the other hand, you have Studio 60: At approximately $1 million an episode it has immaculate production values but its slightly older, affluent audience can wait until the weekend to catch up on Matt and Danny's adventures -- so it's no surprise that it was one of the most TiVo-ed programs before its recent local-affiliate-induced hiatus. (The show didn't drive enough eyeballs to the nightly news.)
But for each show you will find viewers who relish the experience of watching it the second it's available, and, the second they get around to the living-room couch. For each show you will find viewers with the cash to pay $2 for commercial-free downloads and viewers (on the Ramen-noodle meal plan) who will watch the free version online; "free" resulting from either a legitimate view on the network's Web site, a YouTube-like copy found via alluc.org, or the BitTorrent download. Unfortunately for the industry, however, every viewer who counts is not being counted. Their individual needs are not being satisfied by the official offering, leading to unnecessary fragmentation.
The industry has forgotten how strong people's emotional connections are with their favorite bands and characters in shows and movies. The experience of consuming most content is not so much the sound system's quality or the screen's size, the simple act of listening or viewing the content is more important. That's why so much of The Daily Show and other content is watched in the horrible resolution YouTube offers. The pixelation and tinny audio don't make the jokes less funny, but the fact that it was delivered exactly when and where it was desired enabled the full potential of that experience opportunity. But look no further than the IMAX experience for an un-downloadable harmony between the viewing act and the content.
The theories of The Long Tail and The Experience Economy share the notion that additional economic value is created by expanding the gamut of individual needs that can be served, in this case with the creative/customizable offering of the same product. The innovation necessary to make this a reality for the media and content industries cannot be fully unleashed until our favorite shows, songs and movies are made available for free and fee; ad-free and ad-nauseum; on time and on demand; on any type of set top or hand held; and a la carte or buffet. Every second this is not the case, more control slips away as the masses are pressured to conform to the models designed exactly for masses. The question is not what will be the new model for media entertainment, it is what are the new models? The future television platform will be one that allows for multiple models, managing media from any source and has as its default the simplest interface imaginable in addition to ones customized for that viewer -- from the coach potato to the viral video junkie.
April 19, 2007
The Death of Old Media Has Been Greatly Exaggerated
Sitting in the salon at the 109-year old Claridge’s hotel in London’s Mayfair district, in a room full of deep dive participants debating the declining health of old media, I couldn’t help thinking about Mark Twain, while residing in London, informing an American newsman that reports of his death had been greatly exaggerated. More than 100 years later, I’m here to send a similar missive to the world: old media is alive and well.
Okay, that may be a bit of exaggeration as well. But among the many solid themes coming out of the London deep dive on media and content was the idea that content, though shared and distributed in myriad new ways, has not substantially changed in hundreds of years.
“At a base level, it’s all storytelling,” said David Wells, deputy world news editor at the Financial Times. “The actual content has never changed. People tell stories. What are they going to be doing 80 years from now? They’ll be telling stories. I don’t find all of this new media to be a threat. I see it as an opportunity.”
There was a fair amount of agreement on this point, which was interesting considering the wide variety of participants in the dive. Along with Financial Times, the dive had representatives from Virgin Media, Ogilvy Group UK, Scottish Media Group, Sony Corp., venture capital companies Sofinnova and Target Partners, the European Commission, Ofcom, Oxford University, Manchester University, Vodafone, and a promising little startup that piqued everyone’s interest called Grapeshot.
Once the group concluded that the basis of content would remain more or less the same, the big question was how to make it into a business that pays, as younger generations grow increasingly comfortable with the idea that all content is free. This brought up a now familiar theme to the GIO: context. Grapeshot director John Snyder has been building technologies that put context around otherwise valueless content, and had a lot of thoughts on the subject. By mining the “DNA” of content, and marrying that DNA to a user’s cookie, Grapeshot can mine patterns of content that make targeted advertising a reality.
“The money is there if you can connect ads with people’s intent,” said Snyder. “Most places are unaware of the intent of their readers. Personalization has to reflect intent and context.” The company is also working on technology that can measure the influence of a piece of content over its lifetime, the “trajectory and velocity of a story,” as Snyder says, and map it globally.
The idea of building context around content is clearly the biggest idea that has emerged consistently in this GIO focus area, and it is one we’ll want to pursue in greater detail when we meet in Los Angeles the first week of May.
Other themes from the London dive: There was some concern among some of the participants about the consequences of an infinitely fragmented media and content universe, in which micro-communities consumed only content that reinforced their beliefs, thereby leading to a more fragmented society. One participant lamented that while we are breaking down geographic barriers through the use of the Internet, we are simultaneously erecting new barriers of ideology. But in this world of wildly proliferating content markets, noted one deep diver, trusted aggregators of content would be needed. They may even serve as distribution channels for the many, specific views of these disparate communities.
And besides, it’s too late to turn back. “You can’t un-invent choice,” said Alex Blowers, the director of Ofcom, the U.K. regulatory body in charge of the communications industry. “We will not get fewer channels, and you can’t replicate the golden age of scarcity.”
April 17, 2007
Most Americans are just looking for a cell phone that completes more calls than it drops. But in the media and content deep dive in Helsinki, Finland, today, we asked participants what else they are looking for from their mobile devices, since they already have the coverage problem licked. Here’s a partial list of their requests:
I want it to be the key to my car and home.
I want it to track my family members and tell me where they are.
I want it to be my wallet.
I want to watch the news on it.
I want it to translate different languages.
I want it to be a universal remote control.
I want it to monitor my heart rate and blood pressure and transmit the data to my doctor.
I want it to access my virtual worlds.
I want it to jam all personal communications of other people near me.
I want it to just be a phone.
This litany of requests will give you some idea of just how wirelessly advanced the Finnish are. While much of the rest of the world struggles to extend wireless coverage and improve data speeds, the Finnish are thinking about heart monitoring and real-time language translation. They’re so far ahead, they’re pining for the good old days, when a phone was just phone.
Helsinki is similar to Seoul in its level of wireless sophistication. This is, after all, the home of Nokia, one of the true pioneers in the wireless market. And we were not disappointed in the innovative thinking of all the participants when it came to the mobile market. It helped that we had folks from Nokia, leading Nordic telecom Telenor, and the leading Finnish gaming company Sulake. But our deep dive included more than just Finnish. We had representatives from all over Northern Europe, including German media conglomerate Bertelsmann AG, Norwegian venture capital company Viking Venture, a German hacker organization called Chaos Computer Club, and the Copenhagen Business School.
One of the most compelling ideas that our colleagues kicked around during the day was a mobile twist on the contextual content thread we have been exploring throughout the GIO. If you recall, we have been tossing around the idea that as it gets harder and harder to monetize content in traditional ways, content producers should be looking at providing more context around content, some of which could be monetized. For example, if an individual could notify content producers, including advertisers, of the kind of content they want and when -- a sort of digital persona or marketing profile -- the distribution and consumption of that content would be far more efficient and valuable.
The Helsinki deep dive took that concept a step further, and talked about mobile devices that could broadcast content (or other kinds of) preferences that you could take with you wherever you go. This personal broadcasting could also help individuals identify like-minded people in any location, creating spontaneous communities in real time. One diver called it “blue spooning,” a play on the word Bluetooth, the wireless communications technology. Whatever you call it, it adds another layer to the argument that context takes otherwise valueless content and makes it valuable.
Also, there was some spirited debate over whether user-generated content could arise on its own, or whether it needed to have some investment (in a framework or infrastructure) to enable it. And there was yet another desperate plea for some kind of framework to allow users that create content, be it a song, movie, or a suggestion to a corporate product development team, to be remunerated for their contributions.
The discussion was progressive, and by that I mean that it feels like we’re really getting somewhere with this context issue. Any and all thoughts are welcome.
April 10, 2007
Content is King, Context is Queen
Last week, I tried to relate some of the most compelling ideas that came out of the Seoul deep dive on media and content. Of course, and as always, I lost a few things in translation. Fortunately, Paul Reynolds, a director at Auckland-based consultancy McGovern & Associates, who contributed some of the most forward-thinking insights to the deep dive (including this blog entry's title), articulated his own thoughts on his blog, McGovern Online. I’ll give you an excerpt, but I would encourage you to read the whole thing by clicking here:
Context - putting it all together.
The connecting point to all this is context - and for me,
that's where the future lies - not so much creating new content streams [though
that is an inevitable part of the mix] but creating new contextual tools and
spaces - which in turn give me the framework[s], to interact and rearrange my
relationships between one kind of media and another, and, crucially, integrate
these content relationships with the different social groups of friends,
colleagues and family who share all this with me.
For example - if I've totally enjoyed a new movie in the family area - say Pans Labyrinth - I'd like to see a layer, either on the DVD, or more likely the web, that switches to a deeper set on linked sourses on the Spanish Civil War, or the History of Fayriae, etc. I also want to share this with the people I saw the movie with.
Similarly, if I'm in a study space, I want to be able to switch out of the space I'm in and see how current news or other media is treating what I have been studying. Or maybe, all I'm doing is responding to an IMS, or a skype call.
Or, if I'm in the noisy eating/chattering space of the living room, I want to be able to pull up all manner of local happenings reviews, restaurants etc, as well as mark some stuff for quieter times in the study area.
In short the changing context of my life is matched by an equally intelligent context machine which is able to scan the surface of an issue - flood it with group noise and opinion, or take a step back, quieted down, and be able to take the time to sit and think with some serious sources.
Paul goes on to describe what this “context machine” might look like. Fascinating stuff.
Also, you may be wondering why the piracy conversation I hyped up before the Shanghai deep dive seemed to peter out. I’m wondering the same thing. The only thing I can think of, and as yesterday’s Wall Street Journal article on U.S. action against Chinese piracy demonstrates, is that the issue is so dangerously political (not to mention difficult to solve), people just don’t want to touch it.
Here’s the lead sentence to the WSJ article: “The Bush
administration is preparing to take its longstanding spat with
It is a battle that is being fought on many levels, and with
varying degrees of success. And in many cases, industry and government are not
working together to solve the problem, which obviously isn’t helping. Again from the WSJ article:
“Industry groups that aren't expected to support the case include the Business Software Alliance, whose members include Microsoft Corp. and Apple Inc., and the Pharmaceutical Research and Manufacturers of America, the drug industry's main trade group. Both sectors have made their own market-access and antipiracy advances and don't want to see that work disturbed, administration and industry officials said.”
Maybe looking for a silver bullet for the piracy problem is too much to ask for. But it doesn’t hurt to ask.
April 05, 2007
The first thing you notice when you arrive in Shanghai is the cranes. They are everywhere. Free-standing cranes. Mobile cranes. Cranes on top of buildings. And they are in constant motion, hauling I-beams, window panes, and scaffolding, literally transforming the already stunning skyline of Shanghai as you sleep, operating 24 hours a day, 7 days a week.
The cranes are a symbol of the jaw-dropping growth of this city and country. When the rest of the world hears about the wealth pouring into China from overseas, it’s hard to imagine how that money is manifesting itself. But here in Shanghai, it is stunningly clear. With its ultra-modern architecture and endless tilt of high-rises, you get the feeling here that you are staring straight into the future.
With that in mind, we couldn’t help wondering whether this fantastic city has the potential to become the future center of the media universe. And so, in true GIO fashion, we collected some of the top minds in the media and content arena, put them in a room together in downtown Shanghai, and asked them what they thought.
We had distinguished professors from some of China’s top universities, including Peking, Tsinghua, and Shanghai Jiao Tong. We had representatives from venture capital players like Lehman Bros., WI Harper, and Gobi Partners. And of course we had a liberal sampling of old and new media representatives, like gaming companies The9 Limited and Shanda, newspaper Nanfang Daily, and IBM partners Disney and Sony Pictures China.
There was general agreement around the table that if China were to emerge as a global force in media and content production, it should use that position to educate the world about Chinese culture and values. This was a pretty foreign concept to me. I always thought that Hollywood had exported American culture throughout the world incidentally, as a byproduct of the entertainment products they were selling.
But in China, at least among the folks in this deep dive, there was a strong belief that entertainment, and other types of content, should not be about entertainment alone. That there should be educational value attached to any type of content that is produced here. It is a view that some believe the younger generation here does not share.
The Chinese people believe they have great stories to tell, and they are eager to express them to the rest of the world. But there are great challenges. The government still controls the media industry here, a fact that came up repeatedly in our discussion. One participant lamented that China has loads of creative talent, but that artists don’t feel comfortable pushing artistic boundaries for fear of censorship. And investors, both domestic and foreign, are skittish about investing in an industry that comes with so much regulatory baggage.
Also, the language barrier is high. One participant suggested that gaming could serve as a bridge, both for culture and language, and even become the platform that delivers the educational and cultural advancement the group was looking for. Another suggested that China should concern itself with applying its manufacturing prowess to the production of content (like movie production etc.) from other countries, and then worry about creating its own content later.
Piracy was also a major topic, and while everyone agreed that the problem was pervasive and damaging, there was little consensus on what to do about it. Some suggested that speed to market was the key, but some movies show up on the streets of Shanghai before they are even released in theaters. Another participant thought that moral education was the proper course of action. But most people feel that train left the station long ago.
There was one interesting thought that arose, however, about how piracy can be leveraged as an effective marketing tool. Big media companies sometimes struggle to distribute their product to the low end of the market, because of price, but also because they just don’t have the distribution network. This is where piracy actually fills a need. The question is whether or not it makes sense to seed the market sometimes through piracy, and then later offer that market a new value proposition with higher quality content they would be willing to pay more for. I can see eyes rolling all over America.
All in all, the Shanghai dive gave us an invaluable new perspective on the media and content space. It was a real education, and one small step in the exporting of Chinese culture to the rest of the world.
April 03, 2007
The Pursuit of Happiness
Maybe it was the strong green tea served at breakfast. Maybe it was inspiring view of downtown Seoul. Whatever it was, there was a lot of energy in the room at the Seoul deep dive on media and content. And the powerful mix of old and new media heavyweights gave the GIO team all that we could handle.
The Seoul deep dive brought together high-level executives, mostly CEOs, of companies from all up and down the Asia-Pacific rim. The attendees included: a representative from one of Australia’s largest online news publishers, Fairfax Digital; media consultants from Tokyo and Auckland; the young CEO of Korea’s top online gaming company, Neowiz; the former Korean minister of information and communication; and the CEOs of two of Korea’s top new media companies, Tatter and Company (blogging software) and Ohmynews, the citizen journalism site that has taken Korea by storm.
We began the meeting by asking participants about the impact of Korea’s considerable lead in wireless infrastructure and broadband penetration has been on its content. Does ubiquitous access change the types of content, both media and otherwise, that gets consumed? Most of the folks in the room were in agreement that though Korea had solved the infrastructure problems that still bedevil many other nations, it had yet to figure out the business models that would complement these formidable distribution channels.
Ironically, it was the one man in the room that seemed to have solved that problem that had the most questions. Mr. Yeon-ho Oh, President and CEO of Ohmynews, kicked the conversation off with a decidedly philosophical tone. Ohmynews is part business success story part social phenomenon. The company uses an army of 50,000 citizen journalists to deliver breaking news and analysis on happenings around the world. It’s motto: Every Citizen is a Reporter.
Mr. Oh wondered whether all the information that is being provided throughout Korea, and the high-level of participation that the Internet affords (especially in the case of Ohmynews), is actually making people happier. “And secondly,” he continued, “What is the commercial value of all this participation? And how can a business like this become sustainable, and grow profits.”
The room was a little shocked by Mr. Oh’s line of questioning. I think most of the people in the room were hoping that he could tell them the very same things. But at the same time there seemed to be a sense of relief that no one, not even the wildly successful Ohmynews franchise, has all the answers.
Another interesting concept that emerged was the idea that content should be able to understand its context. In other words, right now different types of content come at consumers all the time, anywhere, any time. Wouldn’t it be interesting to be able to let content providers know what kind of content you’re in the mood for. Like an instant messenger status indicator for content. For example, there are times when I want fast and easy information. And then there are times when I want to read an in-depth article, watch a long movie, or not be bothered at all with information.
This ties into a thought that first came up in the New York student deep dive, whereby individuals could control their own marketing profiles and manage them throughout their lives, ensuring that they were only marketed to appropriately. One deep diver thought that perhaps public libraries could act as a trusted third party network that keeps our marketing profiles on record.
And there was one theme that reemerged in Korea that we’ve heard everywhere we’ve gone: authenticity. It came up in New York, Mumbai, and now in Korea. I suspect it will follow us everywhere we go. There is an understanding among all of the top thinkers in the media space that the world is craving authentic experiences. Consumers don’t want to be marketed to anymore. They want the truth, be it from an advertisement or a piece of content.
It got us thinking whether there might be a need for some kind of credibility rating that could be attached to any kind of content. It could be something simple, an eBay seller’s rating for news articles, advertisements, blog content…everything. It would tell viewers how many people had viewed the content, and what level of confidence they had in its authenticity.
Overall, it was a fascinating day. Our Korean hosts were kind and considerate. The conversation was lively and provocative. And the GIO team hit the road again for Shanghai early Wednesday morning. Stay tuned for the Chinese perspective on all of this!
April 01, 2007
Heart and Seoul
The GIO team landed in Seoul, South Korea last night, in preparation for our deep dive on media and content, and so far the trip has been, well, interesting. Upon arriving at the hotel, we were greeted by a phalanx of security guards, metal detectors, and a bank of reporters at the ready with cameras and microphones. At first I thought the GIO had really taken off, and the local media was eager for a few sound bytes.
Alas, all the fuss was about the free-trade agreement that was being negotiated between the U.S. and South Korea. The free trade agreement, known as the KORUS FTA, is a pretty big deal. It’s the biggest trade agreement the U.S. has entered into since NAFTA. And there’s $20 billion of additional trade between the two countries at stake. Early Monday morning, negotiators at the hotel we’re staying at reached an 11th hour agreement on the deal.
Like all free trade agreements, this one is controversial. Before the two nations reached the agreement, there were a number of sticking points: auto tariffs, agricultural trade (especially of American beef and South Korean rice), and copyright protection. And there were numerous protests, including hunger strikes and candlelight vigils.
But what was so fascinating about this slightly harrying experience has been the media coverage of the events. Korea is a land of near ubiquitous Internet access. And it seemed that there was not a single person in all of Seoul that wasn’t getting instant updates on the progress of the negotiations (the deadline was extended several times, and talks alternately progressed and stalled throughout the week.) Unlike the United States, mobile phones here are much more than communications devices. They are delivery mechanisms. They are like little newspapers in your pocket. And one of the most popular news sources in the country is Ohmynews, a citizen journalist site that has 43,000 contributors.
It got us thinking about how a ubiquitous Internet environment actually impacts the nature of content, media and otherwise. By now the rest of the world knows that Korea is years ahead of other developed nations in its use of wireless technology. So the question is, what kinds of content are appropriate for that medium, and how can the rest of the world learn from Korea’s example?
That’s among the topics that we’ll be mining at the deep dive tomorrow, which will feature representatives from media companies, academic institutions, and government organizations from Japan to Australia. And we’ll be keenly interested in learning what the rest of the world will look like when we finally catch up to Korea.