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Wednesday, July 11, 2007

The Future Of Media Report 2007: What's Coming, What's Changing

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The Future of Media Report for 2007 just went a live a second ago in PDF format, a little less than a week away from the Silicon Valley and Sydney based Future of Media Summit. This article provides an overview of the key concepts, issues and research results showcased within this interesting yearly media report.


The 2006 edition of the Future of Media report, reviewed and commented at the time by Robin Good, achieved a great deal of interest, with over 70, 000 downloads of the freely available document across 20 countries.

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

Taking into account the shifting face of advertising, the monumental changes taking place in new and old media, and the growing significance of user generated content, the Future of Media Report attempts to capture a snapshot of networks and business models in radical transition.

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.


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 changes 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 advertising,

    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 San Francisco chronicle cutting back 25% of its staff, working as an independent online publisher never looked so appealing.

  • User generated content and new distribution channels:

    If you hadn't noticed already user generated content is driving the new web, whether through video sharing services, blog publishing or social 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 participatory media culture.

    The report highlights the fact that the vast majority of the 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 RIAA 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 other.

    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 properties. 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 and Shifting Advertising Channels

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 delivery.


The simple fact is that while the market is still dominated by mass 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 level. No doubts that from reading these figures US-based online ad expenditure is clearly among the highest in the world.


Nevertheless, at least from a US perspective, it would seem that 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:


The same principle applies well beyond the television set as new 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 newsroom, whether 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.

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

Complementing the proliferation of content delivery channels, the 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:


In short advertising looks set to continue its course towards personalization, 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, and social media sites such as YouTube and Wikipedia are enjoying a healthy rise in online visitors.


Given the global reach of these destinations, however, it seems 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 the 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 Facebook since the opening up of their platform.


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 relationship 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 facility - I am a bit baffled by its inclusion above much more worthy social media candidates.

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 active 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 platform.


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 contacts have with video streaming, I find these figures somewhat hard to fathom. It also seems peculiar that Japan goes missing from the chart, when average connection speeds are somewhere in the region of five to ten times that of those cited for the US.


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 Tail.

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 other.


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 themselves 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 audience.

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 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 future.


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 platforms, 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 the 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 business 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 few pages of the report somewhat lose steam and fall back on filler material. 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, social media and social networks, not to mention the shift in advertising and business models which is an increasingly granular media landscape.

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, its publishers have much to learn from those enabling these new, open-ended, two-way conversation: bloggers like you and I.

Additional Resources

I you would like to learn more about the Future of Media Report, you might want to take a look at the following links:

Originally written by Michael Pick and Robin Good for MasterNewMedia and titled: "Future Of Media Report 2007: What's Coming, What's Changing"

Michael Pick and Robin Good -
Reference: Future Exploration Network - Future of Media [ Read more ]
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posted by Michael Pick on Wednesday, July 11 2007, updated on Tuesday, May 5 2015

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