Future of Social Media…and Media

The online media platforms of broadcasters and newspaper publishers have been integrating social media into their channels for some time now. Integration takes on many forms including offering space for comments, providing web widgets to share articles on the likes of Facebook, Twitter or del.icio.us. Recognising that people carry with them devices that can capture and distribute media in real-time, broadcasters and newspapers encourage people to send them information about events. Professional journalists have blogs and Twitter accounts. Indeed the inter-dependency between media and social media has evolved to the point that some say it is impossible to separate the two.

Media Futurist,Gerd Leonhard, describes the outlook for social networks and social media as an online operating system for individuals, for business and for government – for society generally. Whether you are communicating with people, looking for information or looking for other people or points of interest nearby, whether you are on the mobile web doing some purchasing or banking online, or some citizen journalism, whether your location enables information or advertisements about things of relevance to you to be pushed to your mobile device…you get the picture.

Portable identity tools such as Open ID, Facebook’s Facebook Connect and Google’s Friend Connect allow users to share and aggregate news and information from one web site to another. These developments are regarded as forerunners to technologies that enable portable identities creating (according to a Forrester analysis on the social web) shared social experiences – where socially connected people take their digital identities with them and interact with their social networks over the Web. Those shared experiences are more likely to be contextual situations where their reality is augmented and/or mixed through digital online technologies.

For people entering this space – possibly up to a third of the population over the next five years – content will not be king, nor will their voice calls be mainstays for the telecommunications industry. Content will remain important, but its placement will be contextualised and personalised. It will be relevant to and timely for individuals and their social networks. As Gerd Leonhard says, content will be embodied, packaged and curated in ways that offer value to people. That’s the rationale behind Google’s Social Search – this posting by Mahendra Pasule explains why. I like the terms used by Mahendra too, particularly social relevancy. I feel we will see that term becoming a mantra for social media value-adding strategies.

For more information on value generators see media Futurist Gerd Leonhard’s Future of Social Media presentation delivered at PICNIC ‘09 in Amsterdam back in September 2009. I found the 30 minute video to be time well spent.

The direction that social media/media is heading in is not cross-platform. The operating framework is as a social platform, a shared digital media space. The ‘community hub’ will not be a physical location as such, it will be a socially networked space, where content and services are socially relevant in terms of who and what people are connected to, and their context at the time.

Clay Shirky on the future of newspapers and accountability journalism

Professor Clay Shirky spoke recently at Harvard on internet issues facing newspapers. Click here to view the video or read the transcript. It is very interesting and fascinating stuff, covering newspapers’ shrinking ability to produce accountability journalism. The focus is on the U.S. and the public good role that commercial media – in this case advertising supported newspapers – have played in accountability journalism.

I read the transcript to learn about the role that social media is playing in this…and was not disappointed. Social media disrupts the traditional role that media has played in deciding what information is bundled with the ads. Newspaper web sites by and large have mirrored the print copy of newspapers, assuming that readers would go to the web site just as they picked up a newspaper to read. With social media, that assumption no longer holds. Instead of going to the web site, people go directly to the storey, because someone in their network Twittered about it or put it on Facebook or sent a link in an email. So the audience is being assembled not by the newspaper, but by other members of the audience. Now, that’s true for me too. I spend less time on media web sites and on RSS feeds and more time on Twitter & Facebook because of the quality of information I’m getting through my social network.

There is little doubt that social media is a disruptive force in media and in advertising. Companies born digital are taking on more social dynamics into their business model. Take Google for instance, having just released an experiment with search going social.

Professor Shirky’s presentation goes into the public good generated by the social distribution of news online. The public good comes from republication and reuse on a scale that was not feasible from just hard copy print alone.

People can share or forward commercially produced articles online very easily right now, but for how long is unclear.  If newspapers put news and information behind a pay wall, that would block republication and reuse. But then, as Shirky says, the internet enables non-commercial models for news and information production and distribution, including socially produced material. So whatever newspapers do, they will need to rebalance with these alternatives. But the uncertainty is whether the alternative models will be effective substitutes for accountability journalism. Shirky thinks a transitional problem is looming due to the rapid decline of the newspaper industry (particularly in the U.S.); and the uncertainty about the nature and length of time of the intervening period until the (or whether the) social media ecosystem has evolved to fill the gap, particularly in respect of local journalism.

Morgan Stanley Web 2.0 Summit Presentation

After noting good comments on the Web about Morgan Stanley (MS) Internet analyst, Mary Meeker’s Economy & Internet Trends presentation, I had a look at it. It’s worth a flick through. For those not so interested in financial data, can I suggest you start on slide 28. Main points of interest are:

• Mobile Internet usage is and will be bigger than most think (i.e they agree with Cisco’s forecasts).
• Telcos will face serious challenges in managing incremental traffic.
• The mobile applications development ecosystem has disrupted the walled garden carrier portals.
• Improvements in social networking and mobile computing platforms are fundamentally changing the ways people communicate with each other and ways that developers/advertisers/marketers reach consumers.
• Location information changes everything: where we shop, who we talk to, what we read, what we search for, where we go – they all change once we merge location and the Web.

Eric Schonfeld’s posting on TechCrunch is also worth a read. Worth noting in particular is that “She [Meeker] singles out the mobile industry as the one where both the most opportunity will be found and disruptions will occur over the next five years. Moreover, she suggests that the U.S. is poised to lead the transition in mobile to a Web-centric model. (I totally agree). Interestingly, she points to the introduction of the first Android phone by T-Mobile, not the launch of the iPhone, as the key inflection point for the coming era of the mobile web.”

While I agree that the mobile ecosystem in the U.S is moving to a Web-central model, I am not sure that the U.S. can claim leadership in that transition. For example, Japan is about eight years ahead of the rest of the world in mobile commerce (slide 48).  Australia is also a witnessing a similar transition to a mobile Web era, particularly in the way people communicate with each other.

Innovation in media

Business model innovation

Ever heard of Sonos? Based in the USA, Sonos & their partners provide the means to stream or download music from around the world, as well as hooking up to your own music stored on your computer. Using peer-to-peer mesh wireless networks, you can have music distributed to multiple rooms in your house. Currently available in North America and Europe, if you have Sonos you can access over 25,000 Internet radio stations, make up your own personalised radio station through an online service (eg. Last.fm) create your own playlists and access millions of songs online through online music service provider Rhapsody. Radio broadcasters with online channels can be accessed too – the platform provides another global channel for international players such as the BBC. Users can search by title, artist or genre. An obvious attraction is in not having to buy a CD again while having access to so much more choice.

Sonos seems to be a good example of a 21st century Internet business model. Sonos has an internationalised, horizontal business model providing technology coupled with content aggregation through partnerships and distributed over the top of broadband Internet infrastructure. Rhapsody too is a horizontal business player with web services open to third party developers. The consumer gets unbelievable choice. It’s legit. Professionals get paid – in fact given the potentially large customer base, profits from Sonos plays could be very lucrative. I understand that each time a subscriber listens to a song, the copyright holder gets US 1 cent. My understanding is that Sonos (and Rhapsody) revenue is from an ad-free subscription service. At about $12 US per month the cost seems reasonable.

Now, music online has been disruptive factor in the music industry for many years, but innovative plays keep coming. I feel that video and newspaper online business models could follow with Sonos-like business models too. As an avid consumer of news and information online, I would be happy to pay a subscription to an online aggregator so that I can access news and information from any device and from anywhere I am.

Innovative strategy

Mark Scott, Managing Director of the Australian Broadcasting Corporation (ABC), has a posting called Media after Empire on Unleashed. It’s a very good read. But what I am particularly excited about is news that the ABC is creating widgets so that people can take ABC content and share it through their own social networks. Nice. As I’ve said before, social networks are a hub for news, information and communication for many people and I see no reason why that can’t go further to provide tailored entertainment to suit the preferences of individuals and their network of friends online.

There’s a lot about the ABC’s strategic thinking and emerging transformational strategies in Mr Scott’s posting. The ABC is striving to remain of relevance. Apparently the ABC is contemplating what life would be like for them in a world where viewers have 5,000 TV channels to choose from. Although Mr Scott says he does not have a pathway through to “…a more vibrant future for old media organisations”…and he knows of no one that does…he quite rightly observed that “the paths to the future are made not found [and there are] no solutions to be found in legacy thinking”.

Mr Scott comes across as a quite cynical of the News Corp strategy to figure out ways to make hay through charging for content…while staying in control. The strategy has parallels with the fall of Rome… or at least that is Mark Scott’s view.

Here is what firstdogonmoon though of it -

Monetising media and the future of journalism

Well, it seems to me that Rupert Murdoch hasn’t realised that content is no longer scarce. Content is created in many places and the marginal cost of distributing it is close to zero. According to Universal McCann’s Wave 4 report, social networks are becoming the dominant platform for content creation and content sharing. That said, I do think there is value in professionally produced content that people will be willing to pay for. Kevin Kelly has an excellent piece on eight value generators: immediacy, personalisation, interpretation, authenticity, embodiment, patronage and findability. There is plenty of incentive there to motivate people to part with some money – as long as its not complex or uncertain. There is some work to do on formulating the right mix of subscription and transaction charges.

And the question remains, how much are people willing to pay? Moreover, the same question may well apply to TV (see the Razorfish Digital Outlook Report 2009 chapter TV at a crossroads. After all, advertising revenue is moving from broadcasting to online as well, as well as the fragmentation problem from multiple channels, time shifting and so on.

I came across a video of a US panel session on newspapers & the future of media via Gerd Leonhard, a media futurist. Click on the Gerd link to view the first 10 minutes of the session, or view the full one hour session (or part thereof) on FORA.tv.

The event was hosted by the Commonwealth Club of California. All four panellists – from a newspaper, community funded reporting start-up, media aggregation start-up and academia – agreed that the traditional newspaper business model is toast but that journalism will remain a force. I’ve noted a good level of interest about trends in the newspaper sector and the future of journalism more generally. The panellists have an excellent knowledge of the media and cover some interesting emerging and potential developments. Can I recommend the full program to those of you with such an interest.

The newspaper representative said that the old newspaper model of 80% revenue from advertising and 20% from circulation is certainly dead. But he seems to think that print will be around for a while yet. Other interesting comments made by panellists were that:

• people still want content - people feel more connected to the community through access to content - it is the packaging that is changing
• there are likely to be different models to suit different audiences
• professional journalists can collaborate with citizen journalists, adding value in the process
• other forms of professional content, citizen journalism and consumer interaction are likely to focus on personalising media aggregation and sharing.

The community funded content outfit is Spot Us, an online “market place where independent reporters, community members & news organisations can come together & collaborate”. Kachingle is the start-up exploring new ways to monetise content on the basis of personal selection/preference aggregation.

What teenagers know that corporations do not

Well, hasn’t it been fascinating just how widely distributed the views of 15 yo Morgan Stanley intern, Matthew Robson have been. Looking at what Matthew had to say, I am not at all surprised. The messages were clearly stated and I found them hard to disagree with. What’s more, the concise nature of the report is in line with what Matthew said about newspapers in that no teenager he knew regularly reads a newspaper [print] since most “cannot be bothered to read pages and pages of text”. I would add: no video, no audio, no interaction, no links, no free content = no teenage readers. It makes you wonder about the form and format of other research reports. Oh, and in another report on Matthew’s comment I learned that no teenager looks at telephone directories.

Clearly, with so much to attract their attention, many people (not just teenagers) really do value a good summary of something or have a really good search engine on hand rather than pages of text. I just wonder how influential Matthew’s comments have been relative to say other analyst and research institute reports.

As to the sceptical view of 20th Century media moguls, I do wonder whether they have much insight about the way things are going. To my mind, Howard Stringer (CEO of Sony) gives the game away by describing social media as a “club”. It’s not actually a club – particularly not in the walled-garden, proprietary systems view of the world. Social media is an ecosystem in  constant emergence. No one is in control and things change fast. That is not what the moguls and big corporate institutions are used to.

Fred Wilson (a venture capitalist with Union Square Ventures) had this to say about what teenagers are up to. While Fred sounded a note of caution in reading too much into what Matthew Robson had to say, based on his own kids behaviour, he went on to say that “My kids have moved from the set top box to iTunes to Netflix in less than a couple of years and are now watching much of their TV streamed over the Internet.” It is obviously a big challenge for media moguls and their international corporations to be agile and responsive to that  kind of change, especially when that don’t get the fundamentals of what is driving change.

Fred had a few things to say about profitability in internet ventures too. There are a few internet companies doing nicely thank you (including Facebook now it seems). Yeah, I know. You would expect him to have that view. But one of the things Fred Wilson gets is that the internet is transformative. He said that the internet …”is a huge game changer. The internet has been a commercial technology for about fifteen years now. And we are beginning to see the impact of it on everything around us. The industrial revolution and the Renaissance before it lasted a century or more. It takes a long time for such fundamental changes to work their way through the system and produce a new ‘normal’”. That is not a case for deferring strategies to adapt to change I should hasten to add! It is a case for building in agility and flexibility.

The Genie is out of the bottle – and is driving convergence between computing, communications, media and devices

The subject line of this posting paraphrases the heading of a paper on telecommunications/communications recently published by Oppenheimer, US investment bank (HT: David Isenberg). To those who have not been tracking ICT and telecommunications trends for a while, David Isenberg coined the term “stupid network” in calling the transition from the ’smart networks, dumb terminals’ Telecommunications Age, to ‘dumb networks, smart terminals’ of the Internet Age. Basically the message is that applications running over-the-top of underlying networks do not need “smarts” in the network provided by telcos. Just high bandwidth connectivity will do. This is the “dumb pipes” nightmare outcome that telecommunications vendors and network operators fear the most.

Indeed, a battle has been raging between telecommunications and computing industry interests for some years now. The telecommunications sector has a dream: “next generation networks”. Meanwhile, networked computing interest have lived their dream: the open Internet – or has Oppenheimer calls it, network-centric (NC) computing. NC is described as “….networking and sharing computer processing, storage and data, which can be accessed over the Internet using thin devices at the edge of the network” (page 25). Oppenheimer is calling the victory for NC computing. Oppenheimer summarise their analysis by saying “The migration to NC computing will…eventually lead to the break up of vertically integrated service providers along horizontal lines”. They support their case by pointing to the success of the iPhone, which in terms of its applications is separate to the cellular network.

Under a network-centric (NC) computing age, applications and smart devices have the advantage of global economies of scale. Applications and services innovation and deployment can happen much more quickly than services that are coupled to underlying network configurations. So these two forces at work – global economies of scale and rapid innovation development – are the most important dynamic that telecommunications service providers are likely to face over the next few years.

Oppenheimer point to a few examples of applications innovation in VoIP over mobile, such as Fring and Truphone. Fring makes it easy to connect to your favourite VoIP, social network or messaging application and WiFi hotspots. Truphone is a London-based but global provider of mobile VoIP – you can connect to Truphone’s social networking presence on Twitter, Facebook, YouTube and flickr. Later this year Truphone is expected to launch a ‘Local Anywhere’ service where customers will be able to make and receive calls via a local number and at local rates wherever they are. Great for overseas travel! According to Oppenheimer, developments like that could potentially cannibalise telecommunications industry voice revenues (fixed and wireless) and text messaging revenues. Oppenheimer expect that the explosive growth in data traffic would provide some good news to network operators, but that in the longer-term carriers might be better off being transport wholesalers. Oppenheimer assume that carriers could anticipate a healthy share of applications and advertising revenues.

In other respects the NC value-chain is expected to evolve into a horizontally segmented structure with the three main layers being 1) service providers; 2) software companies; and 3) devices. Interestingly, Oppenheimer anticipate that software companies and telecommunications network providers will strive for an open mobile Internet to avoid being dominated by a monopoly operating platform.

Oppenheimer also expect carriers to continue with a strong presence in the enterprise market, providing integrated security, mission-critical execution, dedicated customer service and integration with other data systems.

Largest increase in expressing capability in history

Clay Shirky’s latest presentation is inspirational.

How cellphones, Twitter, Facebook can make history

What is changing is that the people formally known as the audience (in broadcasting terms) or the user (in telecommunications terms) can connect to one-another to talk and ‘do media’. It’s these networks of inter-personal connections that is the driver of change.

The ‘Telecommunications Age’ was one of one-to-one communication. The ‘Broadcasting Age’ was one of ‘one-to-many’ content distribution. The ‘Networks of Inter-Personal Connections Age is ‘many-to-many’.

Those institutions that were in control are no longer. They can convene groups of networked people but cannot control them. Adapting to that change involves a mature realisation of that social phenomenon.

Identifying New Influencers

As time goes by there is more research published on social media and social networking use. Here are some examples on identifying and measuring influence.

Research firm Sysomos has released some interesting data on Twitter use. In round numbers,10% of Twitter users make up 90% of the activity and 1% of Twitter users update more than 10 times per day. Approximately 90% of Twitter users post less than one update per day. Only 1% of Twitter users follow more than 1,000 people. About 90% of twitter users follow less than 100 people. Now this is all consistent with Dr Jacob Nielsen’s 90.9.1 rule:  “In most online communities, 90% of users are lurkers who never contribute, 9% of users contribute a littel, and 1% of users account for almost all the action”. As I’ve mentioned before, the 90.9.1 rule is a well-established pattern in social groups.

There are a couple of observations here. One is that the term “hyperconnectivity” needs to be taken in the context of how much attention is paid to “followers” or “friends” on social networks. Facebook’s own analysis shows that, while the average Facebook user has 120 friends, people maintain regular contact with only about five or six those. The rest are “weak ties” as it were. Those people who are highly active tend to have more connections (eg.1% of Twitter users are most active & 1% follow more than 1,000 people). The two may not be the same set, but based on my own use of Twitter I would say that they are the same. Sysomos data backs this up too: once someone has 1,000 followers the number of tweets/day rises from three to six.

Here is another piece about Twitter, this time as a leading source of real-time information. Time and again Twitter has demonstrated its strength as a source or real-time eyewitness news, heading off  the big media brands, this time in Iran. But there is a downside. To quote Inquisitr “When recognizing Twitter as the best outlet for the latest on the ground, you can’t ignore that the data coming from Twitter is raw, unfiltered, and at times difficult to follow”.  This is where adding value comes in through channelling attention to particular content. According to the Inquisitr article, that is exactly what the Huffington Post (an online newspaper) did to good effect in using data on post-election Iran that had been distributed over Twitter.

Nielsen has reported that time spent on Facebook in the US increased from 1.7 billion minutes in April 2008 to 13.9 billion minutes by April 2009, a growth rate of 700%.Time spent on the top 10 social network and social media sites increased by 212% over the year to April 2009. Interestingly, time spent on MySpace was down 31%. Some previously popular sites (such as Friendster) are no longer in the top 10. The assumption is that users find it easy to migrate from one site to another. I’m not so sure that it’s as simple as that. Facebook now has the largest number of photos of any site and there is no easy way for people to take their data with them right now.

MySpace seems to be more popular with teens, and more popular for viewing online video. Nielsen reported that: “In April 2009, visitors aged 25 to 34 and 35 to 49 were the highest indexing age groups on Facebook, being 27% and 23% more likely to visit the site than the average user, respectively. In contrast, the highest indexing demographics on Myspace.com was people aged 18 to 24 and 12 to 17″.

Identifying social media influence looks like it will be no trouble: focus on the top 1% of users (by activity and number of friends or followers).

The hard part is in measuring influence. According to the Sysomos sample, ‘Twitterfluence’ (as I call it) adds up to about 120,000 people. Time spent on sites is another measure of influence, a more straightforward task. Demographic analysis is another way of measuring influence. For example, tracking teenager social activity would involve more analysis of MySpace relative to Facebook. Tracking the use of social networks like Twitter by other media brands and by individual bloggers of note would also be another measure of influence.

Radio business models, attention and hyper-influence

For some reason there was a bunch of news about radio matters yesterday, traversing the UK, USA and Australia. This was too much for me to resist. So this is a longer posting than usual, but hopefully of  interest.

Digital Britain

Firstly there is news from the Digital Britain Forum (having an online forum is at least something that Digital Britain has got right). In the latest posting, given the dominance of analogue radio over digital radio and the growth of radio content online (speech and music) a question is posed “Is there a case for broadcast Digital Radio?” It seems the Digital Britain final report to be released later this month will provide some sort of response to this question.

The comments in response to the posting make for interesting reading too. One was steadfastly a broadcast radio enthusiast (there is no viable alternative to radio for mass audience listening). Another from an internet enthusiast (people are moving to more personalised forms of entertainment). East is East and West is West, never the twain shall meet. Personally, my substitutes for radio are my iPod, early morning news on TV, digital radio on Foxtel and the Internet.

Why NPR is the future of mainstream media

The subject heading of this section is from yesterday’s Mashable . NPR (National Public Radio) is a non-commercial broadcaster in the USA. NPR seems to do a great job in sourcing and creating content for localised radio stations, helping to fill a growing local news and information void as traditional newspapers and broadcasters cut costs or exit the industry. Hyperlocal content is targeted a relatively small and discreet geographic spaces (eg. neighbourhoods, small communities). Hyperlocal news and information services could be sponsored by advertising that is highly relevant to local information users.

NPR is chasing social media. Their nprpolitics Twitter account has over 793,000 followers ranking it in the top 25 Twitter profiles. Their Facebook page has over 400,000 fans. NPR puts out podcasts, mobile phone applications and blogs and their own social network.

So NPR’s value proposition is allowing people to access content on their own terms. Of course being non-commercial seems to lend itself to being more risk-taking in terms of digital media than commercial media. Nonetheless, all media need to go where the attention is.

Comparing the Regulatory Models of Net-Radio with Traditional Radio

Andrea Baker (Monash University) has had an article with the subject as above published in the International Journal of Emerging Technologies and Society. In the introduction Baker notes that traditional radio is a linear system of mass communication that is domestic in scope, whereas net-radio (streaming over the internet) is a non-linear system of digital-networked information technologies that is international in scope. I support Baker’s emphasis on the globalised reach of net-radio as an important distinction, particularly given expectations around hyper-localism.

In terms of net-radio, Baker makes a distinction between online radio (regulated, traditional radio that have incorporated the internet into their business models) and net-only radio which webcasts exclusively over the internet and is generally unregulated. There are some interesting statistics on the net-radio reach with the USA accounting for over 42% of online radio stations in 2006. Australia hardly registers, although that is not to say Australian’s are not listening to USA-based or other international online radio. In comparison with net-only radio, well it was reported that there were about 5,000 net-only radio stations internationally by 2009 (still with the majority in the USA). That’s a significant difference to online radio.

Baker has an interesting section on regulatory pressures, including extensive reference to Australian regulation. Amongst other things there seems to be a realisation that the internet is adding substantially to competition and diversity and provides increased flexibility. Recognising the fast and unpredictable nature of change, Baker concludes by coming out in support of designing regulations that are flexible: “policies should be flexible enough to compete with new technologies and cope in the modern business environment”.

Observations

Defining and measuring ‘influence’ in the digital/networked economy has become complex. The shift from mass media to personalised media is real. The shift from one-to-many to many-to-many is real. Media has become social and there are a whole bunch of new influencers. At the same time, media creation and distribution is both hyperlocal and hyper-distributed, depending on the user context (their location, activity, connectivity & social networks) and what they are paying attention to. In other words, information is likely be targeted by geography and context in order to get user attention. Media diversity considerations may go the same way, i.e not by platform (TV, radio, newspaper – or even by mobile or some other device) but by location and context.

In my view local will continue to be important, but the influence of highly distributed groups – where geography does not matter – is also expected to rise. Distributed groups define what is of interest to them. That’s why mainstream media outfits and internet start-ups are chasing social networks.