Live from Digital Directions 2011 – Robert Tercek #DD11

The next speaker was  X Media Lab favourite Robert Tercek, whose presentation focused on the changes that are happening in the television industry. He said that 20 years ago the cable television industry had planned out dozens of new services for sales and interaction, and then did nothing for 20 years.

“While the cable industry did nothing to innovate, you had all this activity happening on the Internet,” Tercek said. “All this value was created, but it was not created inside the colsed system of the cable.”

He talked about the difference between open systems – which are designed fro value creation – versus closed systems, that are deisgned for revenue extraction. It’s the model of cooperation versus coercion. The ultimate expression of this is the wall garden.

But the Internet has torn down the walled gardens online. It is now doing the same thing to the cable TV walled gardens, as consumers start cutting the cords in favour of al la carte offerings delivered over the top of the Internet.

“The companies are afraid of their customers,” Tercek says. “And they have reason to be afraid of them, because their customers hate them. Record numbers of peopel are dropping the services.”

Increasingly consumers are switching to online video services, with Netflix consuming 20 percent of prime time bandwidth, and other video services consuming another 17 percent, and 40 percent of traffic on 3G networks is video. Netflix has now broken 20 million subscribers. In the 18 months since they introduced streaming video they have switched over 61 percent of their subscribers to that model. It is now closing in on HBO, when 10 years ago HBO could have brought Netflix. Apple and Google have also introduced services, and Amazon has introduced Amazon Prime as a similar service to Netflix.

Tercek describes it as the unbundling of the television industry, as channels are unbundled from packages, and programs are unbundled from channels.

“The power of the socail Web is millions of people doing small things,” Tercek said  “If you search for Tahrir Square there were 23 million photos taken in a month. Every minute of the day, a day and a half of video is uploaded to YouTube.”

He also called out five trends to keep an eye on:

  • Audience is data – context is not a proxy for audience. We have the ability to target exactly with precision the audience.
  • Social TV viewing – yap.TV, GetGlue and Miso – can identify what you are watching and sync up and check in and pull in the Twitter stream.
  • Remix culture – Disney decided to hire someone who was mashing up clips rather than sue him. Machinima.com is getting 50 million unique viewers per month.
  • Crowdsource creative – “If you are going to squeeze your margins you are going to have to find new ways to get things done.” Poptent is crowdsourcing ads, and MYVS is helping people become video-literate.
  • Virtual cable operators: ivi TV has turned cable into an IPTV stream – it could also let cable companies transmit outside of their footprint.

 

 

Live from Digital Directions 2011 – Riyaad Minty from Al Jazeera @Riy #DD11

The first speaker after the break at Digital Directions 2011 was Riyaad Minty (@Riy), the head of social media at Al Jazeera. Minty discussed the role of social media in the recent Arab country revolutions and how it has enabled a stream of information to come out of these regions.

“The key to success is getting in early,” Minty says. “We started building a list of bloggers that we could get in touch with. Once governments start clamping down on protesters, the first thing they do is cut off communications. We might have gotten hold of people via social media, but then we call then up and use them on our live blog.”

He also talked about the process of educating mainstream journalists of the value of social media tools, often by starting with small examples that demonstrate the value.

“Over the last two years there has been a big uptake in it,” Minty says.

Al Jazeera also distributed Flip cameras to trusted people, with much of the content used on screen.

He also cautioned not to yet technology hijack the revolution.

“It is pockets of people that are using these tools, but where there is injustice in the world people will turn to the tools available to get the message out,” Minty says.

The recent revolutions have seen traffic for Al Jazeera spike by 2500 percent, with Twitter and Facebook contributing 70 percent of referrers. About 45 percent of its audience is in the US where it does not have cable distribution.

Live from Digital Directions 2011 – Bartunde Thurston from The Onion @baratunde #DD11

The director of digital from US satirical website Baratunde Thurston (@baratunde) introduced himself as a comedian and did not fail to live up to his billing, running through a bunch of headlines from The Onion over the years.

The Onion went online in 1996 and now gets more than 7 million unique viewers per month, 15 percent from mobile users. The site has 2.6 million Twitter followers and 1.5 million Facebook fans, and has started using these for live event coverage. Interestingly it doesn’t now follow anybody back: “That’s why they’re called readers … most people have nothing interesting to say,” Thurston said. “What the Onion does is not necessarily comment on the news of the day – what it does is create an alternative universe.”

 

Live from Digital Directions 2011 – Tony Chen @ GroupM Interaction #DD11

Tony Chen started by delivering a sobering assessment of the success (or failure, more aptly) of Western online companies in China. For instance, while yahoo! Started in China in 1999 it had less than 1 percent of market share in2010. ebay entered China in 2001 and acquired the number one competitor in 2006, but was sold to Tom.com in 2006. MSN is a distant number 2, while Amazon.com is unprofitable and losing share and MySpace is going nowhere.

“Stop sending executives to China and hiring McKinsey and BCG people – listen to the local people,” Chen said. “Hear their voices and react to the market in a local way.”

He also talked about the sensitivities of the media industry and dealing with the government. YouTube was blocked in 2008, along with Facebook, and Twitter was blocked in 2009 along with foursquare.

He also talked about the phenomenal success of many of the Chinese companies, which he attributes to their stronger understanding of local characteristics. Twitter alternative Wei bo now has 70 million users, and 227,232 messages sent in the first one second of the Chinese New Year. It had reached 3071 tweets per second in only 10 months – it took Twitter four years to reach that figure. The top three celebrities have more than 5 million followers each. There were also 1000 group buying sites launched in China in 2010.

Live from Digital Directions 2011- Rajat Paharia @ Bunchball #DD11

First up after lunch was Bunchball founder and chief product officer Rajat Paharia, who started by talking about gamification and the infiltration of virtual goods into real-world relationships.

“It’s about integrating game dynamics into your service to drive participation and loyalty,” Paharia said. “Gamification drives participation, participation drives business value. It’s all based off our fundamental needs for rewards. Games designers have known for years how to do this”

This notion of gamification is being used by a wide range of companies, from Starbucks to media companies, who are seeing increases in visits, duration and interaction on their sites. The television station NBC created a site for fans of The Office, where you can join as an employee of Dunder Mifflin and earn virtual currency as a reward for participation in the site. They can also earn currency for creating content on the site.

He also talked about IMHO, a media player with an inbuilt virtual currency where you are rewarded for interaction with the application (such as watching an add) and its spread into the community. Club Psych also rewards fans of the TV series of the same name, even to the point of giving them the ability to redeem points for real-world goods relating to the show.

The concept has even been used by Microsoft to encourage beta testers to interact and work with its products. And a plug-in called Ribbon Hero turns learning Office products into a game.

“People are going in and playing PowerPoint and Word and mastering the product,” Paharia said.

But you need to have good core content. “Game mechanics can ramp you up, but they can’t sustain … if there’s no experience at the core,” Paharia said.

Live from Digital Directions 2011 – Gigi Wang @ MIT/Standford Venture Lab #DD11

The final speaker before lunch at Digital Directions 2011 was Gigi Wang, the chair emeritus of the MIT/Stanford Venture Lab, based in San Francisco. In a wide-ranging discussion Wang covered many of the trends that affecting media, from the rise of sensors and connected machines to the opportunities to use games and virtual goods to engage with consumers.

She also talked about the rise of ad network in mobile and online, and the ability to step and try new mediums, and about the rise of data exchanges and data sales companies such as BlueKai (whose CEO Omar Tawakol is feature in A Faster Future). Another hot topic discussed was vision computing, which makes extracts information from images and makes them ‘machine-readable’ and hence more interactive.

The final topic she discussed was cannibalisation, and the need to think more creatively about the way that content is monetised across different media. Online brings many more opportunities for engagement that can be monetised beyond the cover price.

“Don’t be afraid, just figure out the business models when you go digital – you can give away the app, but you don’t have to give away everything associated,” Wang said.

 

 

Live from Digital Directions 2011 – Kevin Anderson #DD11

Kevin Anderson’s presentation focused on rebooting journalism, and the need to find new opportunities. But he started off with a discussion around information overload syndrome.

“The information that we are dealing with is becoming increasingly problematic,” Anderson said. “We’ve gone from information scarcity to information abundance. Rupert Murdoch built a business based on scarcity.  He is now in a position where there is less barriers to entry.”

The battle for attention is not just about news and information – it is about everything.

“What we have tried to do is create more content … but what that is doing is driving down our margins of return,” Anderson said.

He described the three challenges facing journalism as being that:

 

  • we are losing the battle for attention – in particular on the iPad: “You are not just fighting other news apps, you are fighting every other app”
  • more content is leading to lower revenue.
  • we’re overwhelming audiences into inaction

He pointed our Demand Media, which has 7000 freelancers producing 4500 pieces of content every day. The overload is driving people to easy stories that they can understand, such as celebrity news.

He also described the move from a numbers model to a relevance model – from clicks to interactions, from page views to returning visitors, and so on. The organisations that survive will know that success is about your relationship with the audience and your ability to deliver relevant content to them.

Live from Digital Directions 2011 – Tim Wu #DD11

The first speaker after the morning tea break at Digital Directions 2011 was Tim Wu (@superwuster), an author and professor at Columbia Law School. Wu is credited with creating the term ‘net neutrality’ who was interviewed live on stage by Fairfax’s online editor in chief Mike van Niekirk.

He talked about how large incumbent firms often have mixed feeling about innovation, and that it is the ultimate threat to any dominant company. In the case of the invention of the telephone, the telegraph company immediately tried to take it over and run it out of business.

“The telegraph company could see the writing on the wall,” Wu said. “Their vision was to control the telephone, and their vision was that the telephone would be an accessory to the telegraph. The idea was to create technology in a way that did not threaten it.

“You can see that today. Let’s say there’s a technology that threatens the centrality of search. Google might want to do something about that.”

He discussed whether the Internet would suffer the same fate of contraction into power bases that has been shown in other media forms. Looking at Apple and Google shows the possibilities. While Apple is very closed, in the history of communications those companies have dominated. Google is a more open company that does not own the networks it operates on.

“the question is whether these companies are the future,” Wu said, posing the question of whether the Internet will look like Hollywood, where four companies dominate and everyone else tries to work them, or are the conditions of competition fundamentally different?

 

Live from Digital Directions 2011 – Joshua Hatch, online content manager @ Sunlight Live #DD11

The next presentation was from Joshua Hatch, the online content manager at Sunlight Live, a part of the Sunlight Foundation, and which uses cutting-edge technology and ideas to make government transparent and accountable. He talked about the importance of data and what can be done with it when creative thinking is applied, especially when it is freed.

Hatch ran through numerous examples of use of data sets online to demonstrate interesting trends.

“Data are also highly personal,” Hatch said, demonstrating a site that shows all of the American deaths in the Iraq wars – enabling people to search by age, location, name, and other data points. Some of the uses are also trivial, such as the New York Times idea that got hold of data from Netflix to show which movies were most popular in what areas.

His underlying message was that as more data becomes more machine-readable, it also becomes more useful, enabling us to create more mash-ups and compare more and more data points to make better decisions.

“People constantly are trying to answer questions and respond to their immediate situation,” Hatch said.

 


Live from Digital Directions 2011 – Vanessa Fox, author of “Marketing in the Age of Google” #DD11

As the author of the book Marketing in the Age of Google Vanessa Fox’s presentation focused on search marketing and the way it has changed how we gather information and become the primary tool for navigation of the Web. She suggested that site publishers should really be thinking about what consumers are actually looking for and begin to cater to this as a means of either driving traffic or providing value back to those consumers. She gave the example of a search “What time does the Superbowl start” where none of the search results led back to the NFL.

“With search being the primary tool for navigation on the Web, every page on your site becomes the home page,” Page said. “You really need to make sure that that page not only answers their question … but engages them and pulls them in based on what you want them to do.”