The Key New Media Trends That Will Shape Your Emergent Business Profile: The Future Of Media Report 2008

The Future of Media Report 2008, released less than 10 days ago at the Future of Media Summit, is a conceptual framework that enables those interested in the future of media to see with greater clarity the changes, trends and transformations that are revolutionizing the media universe.

What you are witnessing now and for the first time in man's history is the transformation of companies, markets and even individuals into full media realities. "Today almost every business and social activity is a form of media. " writes Ross Dawson in this report.

It is in the understanding of how the changes and innovations you and I are seeing today that one can build an effective media strategy for tomorrow. It is by understanding first the value and application of such new media trends, such as social networks or grassroots generated content, that one can best leverage, limit or even outlaw their use if they do not fit, enhance or complement your own communication, marketing and business goals.

It is not by jumping on every single train that comes by whistling that you can ever get to paradise. It is rather by finding where and what appearance your paradise has that you can come to eventually pick up the right train and station to get there.

Standards, Relationships, Connectivity, Interfaces, Content, and Services: these, according to this Future of Media report, are the key fundamental elements at work inside new knowledge economy. If you can ride them somehow, and use them constructively to develop more and better relationships with your own customers, you may be seeding the most fertile seeds for a long, profitable and successful media future.

Future Of Media Report 2008

by Ross Dawson

We are entering the media economy. The traditional boundaries of the media and entertainment industry have become meaningless. Today almost every business and social activity is a form of media.

An increasing proportion of our social interactions happen across media channels.Every organization is now a media entity, engaged in creating and disseminating messages among its staff, customers, and partners to achieve business objectives.

As the physical economy becomes marginalized and economic value becomes centered on the virtual, media encompasses almost everything.

At the same time, many media organizations are experiencing severe challenges, as content proliferates, audiences change behaviors, advertising revenue erodes, and new competitors emerge. Others are prospering as they tap swiftly growing sectors, leverage amateur content creation, tap the power of social networks, and scale production costs. Meanwhile adjacent industries such as telecom, financial services, mobile phones, consumer electronics, professional services, and even automobile are becoming media participants.

Each year Future Exploration Network runs the Future of Media Summit, linking Silicon Valley and Sydney with video and cross-continental discussions, and launches an accompanying report.

The striking impact of the 2006 and 2007 Future of Media Reports means this year's report has a lot to live up to. We are confident the new frameworks and ideas we are contributing will again provide substantial value.

Over the last years we have helped many media organizations develop and implement effective strategies. We thrive on helping companies to create the future of media. However it is also exciting to take these issues and conversations into a broader sphere. Welcome to the conversation.

Media: a Growth Market

Media, entertainment, and related industries are positioned at the center of massive global growth.

The current positioning of some media companies in a rapidly changing market means they are not experiencing this upside. Others are doing fabulously well in tapping people's almost insatiable desire for content and connection. In this report we explore the growth and opportunities available to all participants in the vast landscape which is media.

Future of Media: Strategy Tools

Click to enlarge

Flow Economy Framework

Finite players play within boundaries, infinite players play with boundaries.
(James Carse)

The Flow Economy Framework encompasses all activity based on the flow of information and ideas. The diagram shows its six elements: Standards, Relationships, Connectivity, Interfaces, Content, and Services. All six elements are required to deliver value to customers. Each of these elements can be run as a stand-alone business. However the greatest value is unlocked in how they are combined.

Only a handful of companies have the capacity to play in all six elements of the flow economy, and even then they must rely heavily on alliances. The heart of strategy in the flow economy is in leveraging existing strengths to move into a higher-value strategic position. As the landscape develops, this repositioning is a continuous process.

Three Examples: Strategic Repositioning in the Flow Economy

1. Apple

Apple has proved very effective at repositioning itself across the flow economy. Most prominently, it has used its strong positioning in Interfaces (e.g. iPod, Mac) to shift to Content (iTunes).

It has also built direct Relationships with its iTunes customers whereas before distributors held all customer relationships. Apple's adoption AAC as the default music encoding Standard on iTunes provided some lock-in as it was a less common though still open standard.

For iPhone it has selected and generated revenue from selected partners for Connectivity (AT&T in the US), and is now taking part of the Service revenue for iPhone apps provided by a broader developer community.

2. British Sky Broadcasting (BSkyB)

BSkyB began with part ownership of the satellites providing the Connectivity for TV delivery, creating and buying Content, and using these to create customer Relationships. In the early 1990s it sold its satellite ownership and since then has used the Astra satellites to provide the necessary Connectivity.

Its exclusive live TV Content rights for the FA Premier League since 1992 has been leveraged into strong subscriber growth and many new Relationships. In 2001 BSkyB introduced Sky+, a combination set-top box and digital video recorder, providing an Interface to generate greater revenue and build more entrenched Relationships.

BSkyB is now shifting into new Services including broadband and phone. It is also distributing its Content over new channels including mobile using Sky Anytime.

3. NTT DoCoMo

The flow economy framework is especially relevant to telecoms providers that need to reposition from commoditized Connectivity into higher value spaces.

DoCoMo has distinguished itself by developing Standards including W-CDMA and i-mode, providing it with local market diferentiation and access to international markets.

Its alliances with phone manufacturers allow it to control the Interfaces used by its customers, creating more embedded Relationships. i-mode's staggering success after its 1999 launch was largely attributable to its model of allowing third-party Content and Services providers access to the system, with just a low margin for DoCoMo.

DoCoMo is now providing financial Services through its DCMX mobile credit cards, and, as other mobile companies, seeking to leverage its existing customer Interfaces to provide search functionality.

Flow Economy Strategy Process - Summary

1) Define Your Space

• What is the "total customer experience" you participate in creating?
• Which elements of the flow economy do you currently provide within this?
• Who provides the other flow economy elements required?
• What is your current relationship with these providers?

2) Redefine Your Space

• What is driving change in the low of information and value in the space?
• How can you redefine the total customer experience?
• What are competitive drivers within each of the low elements required?
• How can you leverage your existing positioning into new sources of revenue or
  value?

3) Reposition

• Build internal capabilities.
• Acquire existing businesses.
• License content or technology.
• Build alliances with complementary firms.
• Outsource business activities.

Scenario Planning for Media

In uncertain times, don't try to predict the future. Systematically explore possible futures.
(Ross Dawson)

Classic scenario planning is one of the most powerful tools for rigorous long-term strategy development in the media industry. In the face of multiple uncertainties, including technological development, consumer behavior, standards battles, regulation, and many others, a well-designed scenario planning process assists the development of robust business strategies. Generic scenarios are of limited use. Scenarios need to be developed around specific business issues and key decisions. A typical scenario planning process would include:

• Define objectives and key strategic decisions
• Identify driving forces and critical uncertainties
• Select key dimensions
• Create scenario framework
• Develop distinct, plausible, complementary scenarios
• Test existing strategies across scenarios
• Generate new strategic options
• Define a core strategy and contingent responses
• Build strategic responsiveness across the organization

Game Theory: Strategies for Openness

You have to learn the rules of the game. And then you have to play better than anyone else.
(Albert Einstein)

The inexorable shift to openness dominates the media strategic landscape today.

All successful platforms provide rich programming interfaces, open standards are swiftly being adopted, data portability is gaining momentum, most content is available on RSS feeds, and controls on intellectual property are being loosened. The extraordinary pace of these trends means that media strategy is becoming more challenging.

New business models are required, competitive responses must be swift, and strategic choices need to be made and implemented in real-time. In this environment game theory is extremely relevant and a valuable strategic tool.

Game theory studies how multi-player situations may evolve as participants respond to each others' actions. This can be done using mathematical modelling, or more simply as a framework for thinking through strategic options, their impact on the industry landscape, and optimal short and long-term strategies.

More Information

Check out also:

Future Of Media Participation: How And Where We Consume And Participate In Media

Future Of Media Participation: Seven Driving Forces Shaping Media

Full details on the Flow Economy framework and strategy process can befound in Chapter 7 of Living Networks.

Free chapter download from:
www.livingnetworksbook.com