Future of Media Report 2008 - Ross Dawson

Hours per weekmillion1009080706050403020100350300250200150100500Media ConsumptionSource: Carat1900 1920 1940 1960 1980 2000 20202FragmentationAt the same time as we are consuming moremedia, every existing media channel is beingfragmented, and new ones are being addedapace. In the example of television in this chart, we watch evermore television, but the proliferation of new channels meanscontinually less viewer time per channel. Now that the Internetand mobile are creating an explosion of new channels andcontent, audiences are being divided into smaller and smallersegments.Implications:Current mass media markets are ephemeral.Revenues per channel will decrease. In all excepta handful of cases, production costs will needto scaled down.User generated contentSource: Technorati, Flickr, Alexa, Comscore, www.internetworldstats.com2005 2006 2007 2008Flickr photos (x 0.1)Facebook visitorsNumber of blogsYouTube visitorsInternetDigital TVAnalogue TVGamesWirelessOutdoor MediaDigital RadioAnalogue RadioCinemaPrint60504030201007 Driving Forces Shaping Media1Increasing Media ConsumptionIncreasing media consumption Humans areintrinsically media animals. As we get greater accessto media and content, we are discovering that ourappetite for information and entertainment is virtually insatiable.It is commonplace for people of all ages to consume multiplemedia at the same time, with television, internet, newspaper,messaging, and other media frequently overlapping.Implications:Average total media consumption will exceed wakinghours. Most media will be consumed with partial attention.Advertising impact will decrease.3ParticipationEarly talk about consumer-generated media has become astark reality over the last two years, with an explosion of mediaparticipation across blogs, photos, videos, social networks,and more. The costs of quality content creation are plummeting. Alreadya large proportion of content available is non-professional, and people’smedia activities are increasingly focused on participatory channels such associal networks.Implications:An infinite supply of content. Increased fragmentation of attention.Pro-Am (professional-amateur) content modelswill emerge.Exabytes(10 18 Bytes)Total IP bandwidthConsumerConsumer videoUS TV FragmentationSource: Media Dynamics and Bear Sterns1950 1960 1970 1980 1990 2000 200550454035302520151050YearGlobal IP trafficSource: Cisco2006 2007 2008 2009 2010 2011 201214121086420weeklyset usage (hrs)time perchannel (hrs)4PersonalizationMedia is becoming personalized. Ultimately this isabout user control, in enabling every possible choice inwhat, when, and where people consume media, and itsformatting, filtering, and presentation. At the same time, real-timeinformation on viewers enables highly targeted advertising based onbehaviors, location, and other profile data. The fate of personalizedadvertising will depend on how societal attitudes to privacy evolve.Implications:Users’ expectations for control over their media will increase.Abuse of personalized advertising will create a backlash. Somewill opt-out, and others will opt-in if sufficient value is created.Platform-AAdvertising.comYahoo! NetworkGoogle Ad NetworkSpecific MediaValueClick NetworksYahoo!Tribal FusionGoogleCasale Media NetworkDRIVEpmadconion media groupTraffic MarketplaceAOL Media NetworkinterCLICKMSN-Windows LiveTremor Media24/7 Real MediaADSDAQBurst MediaUS Internet audience reachSource: comScore, Media MetrixUS$millionAdvertising NetworksWeb Property0 10 20 30 40 50 60 70 80 90 100% of US online population6Generational changeThe chart shows that each generation is fairly consistentin its media consumption patterns, however that eachgroup behaves very differently. The average audience ageof traditional media such as television and radio continues to increase.Over the medium to long-term, generational change will result indramatically different profiles for media consumption and participation.Implications:Media channels will be increasingly age-segmented. Advertiserswill accelerate their shift to new media outlets. Sharemarketvaluations will reflect age profiles of audiences.40003500300025002000150010005000Behavioral AdvertisingSource: eMarketer2005 2006 2007 2008 2009 2010 20115New revenue modelsWithin the current trend away from subscriptionand towards ad-supported business models, theway that advertising is sold is dramatically changing.As illustrated, the vast majority of the online players with thegreatest reach are advertising networks, not stand-alone sitessuch as Google or Yahoo! Unbundling sales and content isallowing far greater scalability of content production costs.The promise of micropayments for content may re-emergewithin a decade.Implications:Advertising aggregation will be central to the medialandscape. Media companies will segment andunbundle ad sales and content creation.80%70%60%50%40%30%20%10%0%Newspaper readership by ageSource: Journalism.org, Scarborough Research1999 2000 2001 2002 2003 2004 2005 200618 - 24 35 - 44 55 - 647Increasing bandwidth25 - 34 45 - 54 65+In developed countries the Internet has now shifted from dial-up to broadband in the home.A rapid pace of increase in bandwidth will continue indefinitely. It will not be too long before themajority of developed country homes receive over 100Mbps. At the same time mobile bandwidth issoaring, with a variety of technologies contributing to pervasive high-speed access to content.Implications:Video on demand anywhere, anytime. Personal clouds will allow music and video collections to be accessed anywhere without localstorage. The rationale for allocated media spectrum and infrastructure will fade.Strategy •Thought Leadership•Sponsored Content•For additional Future of Media Resourceswww.futureexploration.net