Marketing magazine article 2007 -The future of digital

1. 056 DIGITAL ENTERTAINMENT
David Wesson is an internet media/marketing consultant and has
worked in the entertainment and advertising industries in Europe
and Australia for the last 15 years. You can contact him via email:
david.Wesson@iinet.net.au, call him on 0409 320 143 or subscribe
to his blog at http://digient.blogspot.com/.
The future of digital.
Wondering what the living room of the future will look like? David Wesson provides a window into the online
entertainment space of tomorrow.
T “
he internet is no longer seen Jenkins argues, companies had better listen to
merely as an information gather- If a blogger finds and find ways to engage with.
ing point and purchase space, out some information The consumer in this context has a very
thanks to the growing penetration powerful role to play. If a blogger finds out
of broadband and sophistication damaging to a company some information damaging to a company they
of the end user. Today it is as much an enter- they can spread this very can spread this very quickly and what was a
tainment hub and is part of the digital brand community one minute can turn out to
revolution changing the face of entertainment. quickly and what was a be your harshest critic the next.
In his book Convergence Culture Henry brand community one This collective power prompted Time mag-
Jenkins, professor of Media Studies at MIT, azine to name its 2006 person of the year as
talks of the new ways our media and culture minute can turn out to ‘You’. Not one powerful person but the collec-
works, suggesting that we live in a world where be your harshest critic tive ‘You’, meaning your average Joe. The editors
”
“every brand, every message, every sound and see the dawning of a new era as “the small con-
every image is spread across every media chan- the next. tributions of millions of people” result in You
nel, either legally or illegally”. On the one hand, “seizing the reigns of global media… founding
this spread is shaped by boardroom decisions as advertisement, your entertainment content. and framing the new digital democracy”.
companies try to maximise the spread of their Companies have lost control. What is exciting
brand messages by ensuring every franchise right now is the degree to which companies are THE GROWTH OF USER-
plays across the overall vision of the company, beginning to realise the power these participa- GENERATED CONTENT
while media companies try to maximise owner- tory audiences exert through what Professor The growth of digital video over the past year
ship of multimedia channels. It is also spread Jenkins calls “a world of collective intelligence”. has been nothing short of phenomenal – culmi-
by the consumer, who can now choose what Jenkins talks in terms of companies shifting nating in the acquisition of MySpace and
media they want, how they want it, when they away from an old prohibitionist model, which YouTube by News Corp and Google respectively.
want it and in the forms they want it. If compa- says, “Don’t touch my intellectual property, it’s Inevitably, the flood of creativity online from
nies don’t make it available to them legally, they mine to control”, to a more collaborationist sites like YouTube, MySpace, Google Video,
will take it illegally. model, which actively seeks to engage the con- Revver.com, Breaker.com, Lulu and Blip TV has
In tandem with this culture of convergence sumer by giving up this control and allowing led to the interest of Hollywood, TV producers
has been the birth of Web 2.0, a second genera- consumers to generate their own content on and advertisers. For example, US TV station
tion of internet-based services such as social the platform provided. And it is this thinking NBC has ordered web and TV scripts of two of
networking sites, blogs, wikis and social com- that is at the heart of Web 2.0 and the transfor- YouTube’s most popular video hits: Nobody’s
munication tools that have led people to mation that is taking place in our media today. Watching and the weekly wranglings of video
collaborate and share information online in In his book Lovemarks: The Future Beyond podcast, Ask a Ninja, starring two would-be
ways previously unavailable. Brands Saatchi Worldwide CEO Kevin Roberts actors spouting their philosophies on life.
talks about the notion of ‘inspirational con- A recent survey by the Pew Internet and
THE ALL-POWERFUL CONSUMER sumers’ who not only deeply care about brands American Life Project found that 40 percent of
We now live in a world where the consumer can and products, but also will go out of their way internet users have posted content online and
do anything they want with your brand, your to advocate and publicise them. It is this group, that user-generated content is mostly driven by
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the under 30s. Within this age group it was the living room environment. Apple has its BBC have done virtual concerts in Second Life
noted that 62 percent viewed content generated own version of the MCE for Macintosh com- and interacted with fans in unimaginable ways.
by someone they knew. puters, which it calls Front Row, and Such has been the hype over Second Life in the
Online platforms hosting user-generated Hewlett-Packard last year debuted its success- past six months that companies are literally
content have arguably already amassed audi- ful widescreen MediaSmart TV. Most recently, falling over themselves to use it as a platform
ences exceeding those for some traditional Apple has launched its iTV set-top box, able to to promote their products and services and
media platforms. Clearly a new critical mass sync TV sets to its iTunes portal – which means interact with gamers.
has been born. any of the videos, music or films now available With MySpace losing its cool factor amid
through iTunes will play on your TV. privacy issues, it will be interesting to see how
THE BATTLE FOR THE The development of game consoles also virtual reality sites like Second Life and MTV’s
LIVING ROOM represents another viable means of digital newly launched Virtual Laguna Beach
This transformation has led to media compa- entertainment for the living room with Sony (www.vlb.mtv.com) will continue to attract an
nies scrambling to make their media content PlayStation 3 and Microsoft’s Xbox 360 both ever-growing audience. There is no reason why
available across a variety of platforms, anxious connecting to the internet and being marketed we won’t be able to work in virtual reality
to avoid a similar fate to that suffered by the as home entertainment hubs to pipe movies, spaces in the future. As the slogan for Second
music industry. Last year in the US, the Walt TV programming and music in addition to Life reads: ‘Your world, your imagination’.
Disney Company made its first foray into mak- games. Incorporated into both new players is a
ing its content available online in a HD DVD drive that is being touted as the next- THE DIGITAL COPYRIGHT
groundbreaking deal with iTunes that made generation format, providing six times the SHOWDOWN
Desperate Housewives, Lost and other Disney resolution of a standard DVD and a higher Striking the balance between owning intellec-
channel programs available for download. level of interactivity. tual property and giving consumers control is
In conjunction with the iTunes deal, the Either way you look at it, the battle for the key to the debate over copyright. There are two
company also developed its own online media living room is showing no signs of abating and main camps with widely divergent views. On
player and during the ABC test it had 5.7 mil- it’s anyone’s guess how things will pan out. One the one hand are the traditional media compa-
lion streams of episodes with the number of thing is certain: we are still a long way from one nies and hardware/software companies who
viewers far exceeding the number of streams. In black box that will pipe all our entertainment; believe information is a commodity that can be
contrast, during the same period the Disney however, with advances in technology you will bought and its distribution controlled. On the
channel had 37 million streams, which speaks see hardware become more robust, more pow- other side are the computer companies like
volumes about kids and technology. erful and more affordable at every level. Google, IBM and most consumers, who believe
At the moment it is still too difficult and that information should be free and its distri-
complex for the average person to take content THE EVOLUTION OF ONLINE bution uncontrolled.
from their PC and transfer it around the various GAMING AND VIRTUAL REALITY Kevin Kelly’s New Rules for the New
devices in the home. But all that is set to change. When Tiger Woods showed up at an EA Games Economy explains how traditional business
Currently standing in the way are compati- campus recently to view the latest version of the models have been transformed by the internet.
bility issues concerning file formats for digital Tiger Woods PGA Tour video game his initial Originally, wealth was based on physical objects
video and the question of how content will be reaction wasn’t quite what its designers were and value came from scarcity. In the new
protected. On the one side is Apple’s rights- expecting. The golf great grew a little impatient Information Age value comes from abundance.
protected FairPlay system and on the other on viewing TV images of his swing and asked The more people who have access to informa-
Microsoft’s Windows Media DRM. While when he could see the game. After a pause the tion, the more valuable that information is.
iTunes has become the dominant player of legal designers said this was the game and that he Robert Metcalfe, the inventor of the Ethernet
music and video downloads, many media exec- was looking at computer graphics. networking standard, explains it very well in
utives prefer Windows DRM and Windows will Right now, computer-generated animation what has become known as Metcalfe’s Law:
be supported by a wide variety of platform for films, games and virtual reality (VR) only “The utility of a network expands by the
manufacturers. go 95 percent of the way towards photorealistic square of the number of users.” In other words,
This year sees the battle to make the PC the rendering, but with enormous advances in the more people on the network, the more
entertainment hub of the home intensify with video processing technology it is only a matter conversations are possible. Those who want to
the launch of Microsoft’s new ‘Vista’ operating of time until that five percent gap is bridged. restrict the flow of information think of infor-
system. Designed to upgrade The Media Imagine being able to put your own face on mation as little atoms rather than as part of a
Centre Edition (MCE) of the XP Windows your avatar or player in an online game, com- great network.
operating system, Vista is specifically designed plete with facial expressions. Where else can The ‘economics of abundance’ is also the
to transform the PC into a living room enter- you cross a reality TV show, MySpace, a per- premise behind Chris Anderson’s The Long Tail,
tainment device. There are now many sonalised website and day-to-day life? In which demonstrates that endless choice is cre-
manufacturers of MCE-based computers and Second Life (www.secondlife.com), users can ating unlimited demand for niche products and
increasingly they are designed to resemble con- travel through a virtual world and interact and services previously unavailable. The furore cur-
sumer electronic devices rather than share experiences with other users. Eighties rently surrounding YouTube is a classic
computers, so they appear more acceptable in pop act Duran Duran, Suzanne Vega and the example. Numerous companies are engaged in
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litigation for copyright infringements and internet-based model will be significantly
Second Life is part of
requesting their content be removed from the the new generation of increased as those shows with a niche dedi-
site. Little surprise Google set aside a consider- virtual interactivity. cated market and audience will be able to
able legal contingency fund on its acquisition of support and fully fund the show.
YouTube. In his book The Long Tail, Chris Anderson
These people claim to be in the content- demonstrates the renaissance being enjoyed by
delivery business, but they do not understand back-catalogue film, book and music titles and
it. There is a very good reason YouTube has that this can also be applied to other indus-
grown from nothing to be sold for $US1.65 bil- tries. He cites the example of one US
lion in the space of 18 months – it’s because of subscription-based music website, Rhapsody,
the free flow of information. being able to sell each of its one million music
DRM is another example that restricts the titles at least once a month; and out of its total
way information can be used in software or sales 40 percent of titles were previously
hardware. Advocates of this technology say that unavailable. Likewise Amazon has done for
it is necessary to protect the rights of artists books what Rhapsody has done for music and
and publishers, but all the signs point to the engine is the means to manage this content; now accounts for 20 percent of all book sales
inevitable demise of copyright. Defective by one cannot exist without the other. Add to this in the US.
Design (www.defectivebydesign.org) goes one the ability to charge consumers and advertisers Professor Jenkins says that in the future
step further in the campaign against the con- and you have a ready-made new media model. there will be more examples of transmedia sto-
trol of information. It is a grassroots Google can perfect ways of making money rytelling techniques, like The Matrix. That is,
movement against the absurdity of DRM tar- from content online by connecting the right where stories are made up of a complex world
geting manufacturers. It argues DRM products consumers, advertisers, content producers, plat- with multiple characters, which in turn sup-
have built-in features that restrict what they forms and devices. port multiple platforms. The Matrix was made
can do. These products have been intentionally There is no reason why media companies up of a movie trilogy, a series of comics, an
crippled by the user’s perspective, and are cannot readily adopt this type of model by sim- animated feature and a video game, which all
therefore defective by design. Likewise the ply giving up control of copyrighted works and interact together to make up a whole. Right
Digital Freedom Movement (www.digitalfree- making content that generates revenue from now it is only really children’s content like
dom.org) recognises that new technologies are advertising available for free. A few sites like US Pokémon that have this integrated storytelling
essential to the creativity and innovation in website www.brightcove.com already do this technique, but we will reach the point where
our modern digital world. with video content and syndicate content to the West Wings of the future will be fully inte-
other sites, with all parties receiving a share of grated across multiple TV shows and multiple
GOOGTUBE: revenue. web platforms.
A NEW MEDIA MODEL The notion of a quality drama will be one
Moving towards a new media model, the com- THE FUTURE OF that allows the viewer to go as deep as they like
bination of Google’s search savvy and DIGITAL ENTERTAINMENT and have as much complexity as they want with
YouTube’s handle on internet video yields the By 2010, it is predicted all TV will be digital, an online community based around it, actively
first viable new media successor to broadcast your computer will be able to speak to a whole deciphering the pieces. Interactivity will there-
and cable TV. The union offers the interactive host of portable and lounge room devices, and fore become a more important part of the TV
infrastructure and tools needed to manage and even sing to you. Broadband penetration will viewing experience, which means more reality
monetise web-based digital video unmatched be 75 percent of all households and 50 percent TV programs, a concept driven more by the
by traditional media platforms. What it means of all advertising will be online. opportunity to participate in the decision-mak-
is that the ad dollars and creative content that Professor Jenkins talks of us being in an ing process. The element of success for any
have sustained traditional media will increas- apprenticeship phase now where we are still platform is putting consumers in control so
ingly shift to interactive platforms that can give learning to use the new consumer power at our they can watch what they want, where they
consumers and advertisers more of what they disposal in an age of convergence. If we fast- want and when they want. That will be reality
want on interchangeable screens. track five years, we will have learned to harness in 10 years’ time.
The 6.2 million daily visitors to YouTube this power and these skills will have spread Thomas Freidman’s best selling book The
are ripe for Google’s advertising-savvy technol- from niche fan-based communities to general World is Flat talks of a world where the power
ogy, which gives immediate open access to most consumers. As demand for content soars, more of the internet makes it possible for individuals
commercial and user-generated content. It consumers are seeking out information in to collaborate and compete globally. He tells us
reflects the demands of a young audience that online communities and engaging in media that by 2020 the free flow of information will
will broaden as it matures. content in new ways. We will no longer be completely blur national boundaries. These will
Clearly the emerging standard for video watching scheduled prime time shows; we will be replaced by corporation-based cultural
and information is on-demand interactivity, be subscribing to TV programs in the same groupings and reconfigured human organisa-
being able to download and store content way we subscribe to a magazine. The opportu- tions tied together by global networks. Maybe
across any platform or device. The search nity for niche programming via an this isn’t so far from the truth. M
MARKETING MARCH 2007