The 2007 Future Of Media Report | How Will Internet TV Change & Evolve?

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The Future of Media

The 2007 Future
of Media Report
was recently published in pdf, in time for
the Silicon Valley and Sydney based Future of Media

In this article, we look at the main concepts, issues and
results discussed in this annual media report.

The 2006 edition of the Future of Media report
achieved a great deal of interest, with over 70, 000 downloads of the
freely available document across 20 countries.

This year
Dawson and the team at Future Exploration Network have put
together a compelling picture of the evolving convergence media

It comes as no surprise, then, to
see the huge
growth of online social networks and social media taking center stage,
alongside a divergence in content monetization and advertising
approaches in a rapidly splintering media environment.

Here are the details:

The Future Of Media

Developments in the Last Year


Photo credit:
Felipe Wiecheteck

The report opens by surveying
significant developments in the media landscape since June 2006.

Here we are given an overview of the previous year, and the
that made 2006 important for media publishers, networks and consumers.
Salient topics include:

  • Industry transactions, acquisitions, layoffs
    and closures:

    Here the importance of the NewsCorp Dow Jones acquisition,
    the XM and Sirius merger and of course the
    Google, YouTube
    and DoubleClick deals immediately leap out at me. 

    On the one hand, as
    NewsCorp continue to succeed in their bid to own every mass media news
    channel on the globe, and Google continue to dominate online

  • On the other hand the
    troubling 93% increase in
    media layoffs in Q1 of 2007 as compared to the same period in 2006 is
    somewhat disconcerting at face value.

  • Reading between the lines, however, it would seem that
    layoffs and
    closures are focused on media conglomerates and the dwindling newspaper
    industry, which fares badly throughout the report. 

    With AOL Time Warner
    firing 5000 staff, and the
    Francisco chronicle cutting back 25% of its staff, working as
    an independent online publisher never looked so appealing.

  • User generated content and new distribution

    If you hadn’t noticed already, user
    generated content is driving the new web, whether through
    sharing services, blog publishing or
    network services
    that users spend hours tending to.

    Gone are the days of a top-down
    mass-delivered media, and in their place we are seeing an emergent
    media culture.

  • The report highlights the fact that the vast majority of
    staggering seven billion online videos streamed each month are user
    generated in nature, and that 120,000 new blogs are created each and
    every day. 

    The audience has gotten up from its chair, thrown away the
    remote control and started making their own media.

  • Intellectual Property and Censorship:

    Last year has been greatly divided on issues of
    intellectual property, with the
    attempting to shut down file sharing site The Pirate Bay, and
    suing grandmothers and children on the one hand. 

    And – as the Future of
    Media Report points out – EMI and iTunes dropping DRM
    from some of its catalogue of online music sales on the

  • As
    users reject such measures as DRM,
    and persist in uploading and sharing content regardless of its
    copyright status, there has been inevitable fall out, as in the $1
    billion law suit filed against Google for infringement of Viacom media

    Nonetheless, the truly smart companies have chosen to
    partner with YouTube and other online video sharing portals,
    befriending rather than alienating their potential audiences.

  • The report also makes mention of censorship issues from
    the past
    year, with US military personnel being banned from using MySpace and
    YouTube – a sure sign of their disruptive nature and ability to leak
    otherwise censored information. 

    Mention is also given to the filtering
    of “inappropriate content” by the recently launched Chinese MySpace.

In short this overview of the
year provides
interesting discussion points and touches on some of the salient events
in global media over the last year, without taking sides or entering
into critical analysis of the same.

Global Advertising Spending

While mass media advertising
still dominates global
spending, as illustrated in this first chart, there is an apparent
shift away from ill-targeted broad marketing using broadcast television
and newspapers, and increasing growth in new media channels of

Global Ad Spending

The simple fact is that while the market is still dominated by
media, their grip is slowly loosening as new media giants step up to
take their place.

We are undoubtedly entering the age of
niche-targeted, personalized content,
and new media avenues, such as blogs and online video, prove great ways
to deliver this content, along with equally well targeted, highly
contextual advertising.

What strikes me as strange, and
this is something I
found throughout the Future of Media Report, is that global figures are
used for one chart, while the next closely related chart relies on
localized statistics.

In this case, we see global
advertising spending
and the role of Internet advertising within it side-by-side with a
chart clearly indicating the huge growth in online marketing spending –
in the US. 

I would personally have liked to have seen a global
advertising expenses compared with a global
online advertising expenditure chart. As it is instead, I am left
wondering if this information was not available, or if perhaps the data
is being massaged somewhat due to an unfavorable comparison on a global

No doubts that from reading these figures US-based online ad
expenditure is clearly among the highest in the world.

US Online Spending

Nevertheless, at least from a US perspective, it would seem
online advertising expenditure continues its rapid ascent, and this has
to be good news for online publishers and advertisers alike – at least
those working within the English language.

Likewise the increasing
fragmentation and
proliferation of media channels. The Future of Media Report chooses to
illustrate the increasing number of content delivery avenues via an
example from US television:


Shifting Advertising Channels

The same principle applies well beyond the television set as
media channels increase in number at an even greater rate than niche
broadcast, cable and satellite television channels do. 

This is becoming
a hard fact in front of everyone’s eyes as web and new communication
technologies make it possible for anyone to easily set up a

That may be in a small studio like that used by
or at an even more grassroots level like the initiatives set up by
Chris Pirillo
and Robin Good
using affordable or even free broadcasting technologies.

long tail of media is definitely here and in full force.

Complementing the proliferation of content delivery channels,
report describes and underlines the growth in the digital advertising
world as a whole, and the variety of means through which this
advertising is and will be delivered.

The following projection from now until 2010
maps out an impressive range of advertising avenues. Time will tell if
they will come to fruition:

Digital Marketing

In short advertising looks set to
continue its course towards
contextualization and appearance across multiple, highly fragmented
media channels, serving both high-end corporate media distributors and
independent publishers mining the long tail.

Growth Sectors Online and the Role of Social Media

It comes as no surprise to find
that social
networking services such as MySpace
and Facebook,
social media sites such as YouTube
and Wikipedia
are enjoying a healthy rise in online visitors.

Social networks

Given the global reach of these destinations, however, it
somewhat shortsighted to account only for their US, UK and Australian
versions, but perhaps this reflects the key audience of the Future of
Media report and summit?

Social networking services are enjoying an obvious boom across
board, and last year has seen significant growth in this area too. It
will be interesting to see the figures for next year, taking into
account the phenomenal growth of
since the opening up of their platform.

Social Media

I find the social media chart
somewhat baffling, as while YouTube
is the living definition of social media, and Wikipedia
at least scrapes in on the grounds of being user-generated, the Apple
website doesn’t strike me as in any way a social media destination.

One would then assume a possible reference to Apple
with music sales given iTunes high penetration and commercial success,
but given that iTunes lacks even the most rudimentary social
functionality – unless you count its primitive music sharing

I am a bit baffled by its inclusion above much more worthy
social media

Regardless, the information
contained in this
section of the Future of Media report supports the ongoing contention
that media is rapidly becoming user-generated, personalized and
participatory in nature.

Worldwide Internet Access and Usage

The section devoted to worldwide Internet access
falls prey to the issue mentioned previously of somewhat arbitrary
national and global points of comparison.

Here you learn that in terms of total absolute number of
Internet users, the US leads the way, while that Japan lags behind in ”Internet
participation through PCs

But with no reported reference to the Japanese predominant
means of
Internet access: the highly developed Japanese 3.5G mobile Internet

Active Users

Unfortunately, also the selection of countries
utilized in this new edition of the Future of Media report feels
somewhat arbitrary, if not altogether US-centric, with only Germany and
the UK representing Europe.

This is further compounded by the side-by-side comparative
chart for
Internet connection speeds, which uses an entirely different batch of
seemingly random countries to once again assert US dominance.

Having encountered the problems several US colleagues and
have with video streaming, I find these figures somewhat hard to

It also seems peculiar that Japan goes missing from the
when average connection speeds are somewhere in the region of five to
ten times that of those cited for the US.

Connection Speeds

Regardless of how you feel about
the integrity of
this data, it seems without doubt the fact that broadband uptake is on
the rise, and while connection speeds vary greatly from nation to
nation, the age of dial-up is fast being left behind as the richer
media-infused web takes center stage.

Media Business Models

Key to the success of the
proliferating range of
business models being put to use is a solid understanding of how
monetization approaches need to adapt to the Long

While mass media, bottom-up grassroots media and everything
else in
between can now coexist in prosperity, it is foolish to think that the
same business models can be scaled from one end of the market to the

The Long Tail

The cost of producing media at the tail end of
the scale has lowered dramatically in recent times, and
it is now possible for anyone to broadcast
over the web.

While mass media content is associated with high
production values, and can best leverage its monetization opportunities
through broad, sweeping campaigns, those production businesses at the
other end of the scale can better target a niche or multi-niche

As such, there is no right or wrong way, but rather a
multitude of
potential approaches that can be utilized to define an effective
business model. 

What that means for independent publishers is that
spending time to carefully target a niche audience is a far more
productive means of economic success. 

Rather that than attempting to replicate the
broad appeal and broadcasting approach of ‘big media’, with their large
marketing budgets and costly production expenditure.

Think niche as an independent,
and you will not find yourself out of business in the close coming

Advertising Personalisation

The last section of the Future of Media report dwells on the
four levels of media personalization.

Social media such as blogs,
online video and social
network services offer an inherently more personalized user experience,
which in turn allows for a far more personalized means of advertising
and content monetization than mass media can get at.

As the diagram above illustrates, the Future of Media report
focuses on four levels of personalization, which, to summarize are:

  • Nil
    – The advertising delivered through mass distribution channels makes no
    distinction between those that encounter it. This is the blanket
    bombing approach
  • Content – niche media delivery
    such as magazines and cable TV channels offer a greater degree of
    personalization by targeting their audience based on their interests
  • Demographic – the use of
    Internet cookies
    or location-specific ISP addresses can allow advertisers to target
    potential leads based on geography, gender or even age, allowing
    further targeting
  • Personalization – the final
    tier depends
    upon gathering detailed user information, whether using a registration
    process, an online profile, viewing history or even directly expressed
    personal preferences

Done badly, any advertising, even at the higher end of the
personalization scale, will seem intrusive – even more so when it has
had to collect huge amounts of data on the end-user. 

However, with
subtlety and added user-generated value, such as the
well-thought-through algorithms of the book suggestion
engine, personalized online marketing can actually transform itself
from an intrusion to a welcome complement, adding to the overall user
experience of a service.

In short as media become more
granular and expand
along the long tail, it is possible to not only serve audiences with
material directly suited to their personal tastes, rather than to a
generic demographic, but also to apply means of content monetization
that add to the overall user experience.

This, should be of course, the ultimate goal of publishers and
content distributors across the board.


The Future of Media report 2007 closes on a
positive, open-ended note, stressing the fact that in
terms of media transactions and mergers:

the size and number of transactions over
last 18 months exceeds almost any other time over the last 15 years,
with activity focused on private equity acquisitions and trade sales

Furthermore, we are left with the very real notion that new
models will necessarily come to the fore for those with the gumption
and inventiveness to stay afloat in the changing landscape.

Nevertheless, I was left with a strong feeling that the last
pages of the report somewhat lose steam and fall back on filler

Interesting as an extended comparative chart of media
transactions, a series of network analysis diagrams focused on an
Australian broadcast group, and the republication of a somewhat
nebulous blog post are, they fall something short of the promise of
earlier material.

The Future of Media Report 2007 does
provide, however, some interesting insights and support for the claims
made as to the growth of long
tail niche media content, and social
media and social networks. 

Not to mention the shift in
advertising and business models which is an increasingly granular media

All of this would seem to bode well for both the large media
corporations willing to adapt to the changes in the ecosystem, and the
smaller independent publishers at the other end of the scale.

The ones that really need to worry,
as the
conclusion of the report makes abundantly clear, are those unwilling to
adapt and change their marketing, monetization and content delivery
approaches in an age of socially mediated, networked, increasingly
personalized media.

As print mass media continues its slow decline as a medium,
publishers have much to learn from those enabling these new,
open-ended, two-way conversation: bloggers like you and I.

Michael Pick is a contributing author discussing broadband video tools and software. His work can be found on MasterNewMedia. Post has Some Rights Reserved.