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.

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.

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.

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?

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.

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.”

The first speaker at Digital Directions 2011 was Anthony Rose, former CTO at YouView and future media controller at the BBC. Rose talked about his worked in launching the iPlayer at the BBC in London, including his decision to push iPlayer out to a range of devices, starting with the Nintendo. Today it is available on almost every connected TV in the UK – 2 million now, or 6 million by the end of this year.

Rose said there are two audiences – the ones who are mainstream, and the blogosphere, who are the ones that help to create the audience. This is changing the dynamics of television, particularly the deployment of television ‘apps’ that are controlled by non-traditional broadcasting companies. He said the TV manufacturers for instance saw themselves as the new gatekeepers and take revenue as a result. And consumers don’t necessarily want to go chasing apps.

Hence there is a need for a content mall, which led to Project Canvas (which has become YouView). He described many of the attributes of YouView, such as the focus on live television and its augmentation, rather than just on-demand content.

He described the remote control of the future, with just five buttons – ‘Me’, ‘Friends’, ‘Browse’ and ‘More’, with ‘Select’ in the middle. Me is for the individual, Friends makes television social by enabling people to ‘share’ what they are viewing.

“Who is the taste-maker is vitally important,” Rose said.

Browse takes the view to the content mall to browse by category, while More will show you contextually-related content with augmented information. It could also lead to ‘Channel Me News’ put together by a server to suite what you want to watch. The question is whether that is owned by a publisher, or aggregated by a third party.

Today I’ll be (almost) live-blogging from the Digital Directions 2011 conference in Sydney. An initiative of Fairfax Media and X Media Lab, Digital Directions gathers some of the world’s foremost media speakers to present on the evolution of the global media industry.

After an introduction from Fairfax’s Jack Matthews the day was kicked off by recently-appointed Fairfax CEO Greg Hywood, who stated that Fairfax has to be immersed and has to contribute to the digital transformation of media. Fairfax Digital will soon to be the second largest revenue earner in Fairfax Media.  The company has more than 1 million apps downloaded, 200 websites, and twice the mobile traffic of its largest competitor, News Limited. He also reiterated Fairfax’s commitment to quality journalism.

Most media companies are exploring the concepts of audience, a few like Fairfax, are taking that one step further and thinkingg about audience in terms of experience,” he said. “We have an understand of what is driving people to access news, views and content, and why and when they are using the various devices they are using. The key to this is high quality content.”

He also talked about art, with the meeting of science and art being where the giant leaps are made.

“In the media landscape we must embrace left and right brain thinking” Hywood said.

On Thursday March 3 some of the world’s foremost thinkers in the field of digital media will gather in Sydney for the annual Digital Directions conference. Hosted by Fairfax Media and powered by X Media Lab, Digital Directions (previously run as Media 09 and Media 10) has proven to be one of the most informative and useful events of the year.

This year’s event features two speakers features in A Faster Future. Robert Tercek is one of the world’s leading thinkers on the global digital media industry and talking extensively in the book about the evolution of the entertainment industry and the ‘data-isation’ of products and services. Also feature is Tan Le, who as president of the Australian-born start-up Emotiv has been developing the next generation of human/computer interface technology with Emotiv’s EPOC brain/computer control device.

The event also features Columbia Law School’s Tim Wu, who is the author of the best-selling books The Master Switch and Who Controls the Internet, and who has been one of the drivers of the net neutrality debate in the US. Also on the agenda are journalism entrepreneur and former head of the The Guardian’s online strategy, Kevin Anderson, director of digital for The Onion, Baratunde Thurston, and Anthony Rose, former CTO at YouView and Future Media Controller at the BBC.

For the next couple of day’s I’ll be reporting from MediaConnect’s Kickstart 2011 conference. Each year Kickstart brings together Australia’s community of technology journalists and bloggers to hear from numerous companies within the industry.

This year’s event was headline by Optus CEO Paul O’Sullivan, whose keynote presentation focused strongly on the topic of competition in the Australian communications sector, particularly as we move to the deployment of the National Broadband Network. He pointed out that while in the wireless industry prices have halved, the same cannot be said in the less-competitive fixed-line communications market. He also cautioned that the NBN will not automatically generate greater competition, and called for greater scrutiny of the $11 billion payment being made to Telstra lest those payments distort the new market in its early years.

“Our major concerns if that the economics of acquisition will be strongly distorted by a deal between Telstra and the NBN Co,” O’Sullivan said. “All we are asking is that the industry gets a level playing field as the NBN is launched. Let’s not recreate the sins of the past in the way that we create the new NBN Co.”

He called for the operation of the NBN Co to be periodically put out to tender, in the same way that the city of Melbourne for instance tenders out the management of its public transport system, and an independent oversight board be appointed for the NBN Co, similar to the Reserve Bank of Australia.

Another theme was the rise of applications and services, and not always in a good way, as foreign companies now dominate online.

“We need to think about access in the physical world as we do in the local world,” O’Sullivan said.

He called for a debate to begin about how content is operated online, such as perhaps that links to be placed on the “winner-take-all” content and service owners to direct traffic elsewhere, and to possible even let other service provider bid for the eyeballs that visit those sites.

O’Sullivan also discussed (and dismissed) the alleged rivalry between fixed and mobile services, and he also posed the question of how Optus can give customers a seamless experience on fixed and mobile networks.