We discussed “wild cards” in the scenario planning process and the way they can disrupt what appear to be the assumed and most likely directions and timing for trends and events.

As Stephen Bartholomeusz discusses, the wild card to projections about the longevity of the commercial “free to airs” in Australia is the nascent National Broadband Network and its potential for remediating television as IPTV services.

As the government seeks to develop its digital economy strategy, it will have to consider the relationships and interactions between the networks, the pay TV services and the looming explosion of internet protocol television (IPTV) services within a 21st century regulatory framework…………

The wild card in the development of new policy settings is the government’s contentious commitment to building a new national broadband network, regardless of cost. Conroy’s willingness to do whatever it takes to buttress the questionable economics of the NBN – including using threats to undermine Telstra’s ability to negotiate the terms on which it might cooperate with the new network – ought to be a concern for the networks.

To make any sense at all of the cost of the NBN it needs, not just a monopoly and all Telstra’s customer base, but also new applications that drive traffic volumes beyond those of the industry today. Video – and IPTV in particular, given its mass market potential – is an obvious application…………

Read the full article

However, the network-centric regulatory framework is an anachronism in an environment where digital technologies are converging to create a new era for both content and distribution. They’ve slowed the tide but the future is now racing towards them.

Stephen Bartholomeusz

At our futures forums many have discussed the hunt that’s on to get internet content, like online news and media to pay its way. What some are calling “the second media age” is busily being constructed. The Murdoch press has recently gone public with its intentions to lead the pack here (along with admonishment of public service media that give their content away for free, like the BBC and ABC). This article from Computer World suggests there are powerful deals between search and media companies on the horizon to make user based payments for online content more ubiquitous and a standard feature.

search and micropay

and more,

other publish and pay options

viewing in transition.

Do you watch TV and use the  Internet at the same time? I often do, but not when I seriously want to get absorbed in the content, like a great television drama (although I’ll often rewatch it on the net)

Nielsen says that over 50% of viewers in the US use both mediums at the same time, at least once a month now Web and TV.

In a speech at the Media Guardian Edinburgh International Television Festival, the managing director of consumer and online at Microsoft UK (and former BBC director of future media and technology) Ashley Highfield advocated the use of unused spectrum in the broadcasting bands to provide fast broadband to rural communities. This is an endorsement of the White Space initiative first proposed in the US by a coalition of corporations including Microsoft and Google. It also provides a possible alternative to the unpopular proposal made in the Digital Britain report that a charge of 6 pounds be levied on all landlines to pay for broadband expansion and upgrade. (See also the online forum on Digital Britain.)

Highfield’s prediction that the TV industry has a window of 2-3 years to create viable digital businesses, or face “a version of the iTunes moment”, has gained most media coverage.  Interesting that his speech came on the same day that James Murdoch attacked the BBC, and the provision (or in his terms the ‘dumping’) of free news and entertainment content on the internet, for hindering competition

“The corporation is incapable of distinguishing between what is good for it, and what is good for the country,” [Murdoch claimed]. “Funded by a hypothecated tax, the BBC feels empowered to offer something for everyone, even in areas well served by the market. The scope of its activities and ambitions is chilling.”

“Dumping free, state-sponsored news on the market makes it incredibly difficult for journalism to flourish on the internet. Yet it is essential for the future of independent journalism that a fair price can be charged for news to people who value it,” he said.

He added: “We seem to have decided to let independence and plurality wither. To let the BBC throttle the news market, and get bigger to compensate.”

Erica Naone has written an article (18 August 2009) on the technological issues around the white space idea in the MIT Technology Review.

Video of the whole of Murdoch’s MacTaggart lecture is available via the Guardian’s website.

The BBC’s business editor, Robert Peston, responded by reportedly engaged in a ’slanging match’ with Murdoch.  Peston earlier delivered the Richard Dunn memorial lecture entitled “what future for media and broadcasting?”.

This may be very premature, but the announcement of the release of a streaming video application that (in theory) allows any broadcaster to deliver live TV to the iPhone via 3G and Wi-Fi rather than DVB-H might just be the development that encourages greater take-up of mobile TV outside Korea and Japan and works around the mess of standards and options for DVB-H (see David Wood’s blog on the DVB World 2009 event earlier this year).

Sarah Perez for ReadWriteWeb reported on 6 August

Content delivery network Akamai announced today that their partner and live TV provider Livestation has officially launched its streaming video solution which allows any broadcaster to deliver live TV to the iPhone. To demonstrate the capabilities of this technology, Livestation has also launched two applications which stream live TV news over both 3G and Wi-Fi connections. Other broadcasters that choose to build mobile applications with the company’s new white label turn-key solution can have an app branded and then sold in the iTunes App Store as the broadcaster’s own.Livestation quietly launched their first mobile application streaming live content over a month ago with the release of BBC World News, which debuted in June 2009. This iPhone application delivers live TV news to viewers in 16 European countries but is sadly not available in the US as of yet. European viewers can watch the news over two types of streams provided by the app: either a 96 K stream on 3G and Edge networks or a higher-quality 300 K stream delivered over Wi-Fi. Akamai’s CDN steps in to help Livestation scale these streams to the millions of iPhones worldwide.

Erica Naone reports for MIT’s Technology Review

Long-range, low-cost wireless Internet could soon be delivered using radio spectrum once reserved for use by TV stations. The blueprints for a computer network that uses “white spaces,” which are empty fragments of the spectrum scattered between used frequencies, will be presented today [August 18] at ACM SIGCOMM 2009, a communications conference held in Barcelona, Spain.

Rest of the story here.

Delivering the Lisbon Council’s Ludwig Erhard Lecture in Brussels on 9 July, EU Commissioner for Telecoms and Media, Viviane Reding, outlined the EU’s priorities in its Digital Europe strategy.  The speech is available here as html, and here as pdf.

Some highlights:

We would like to have internet broadband for all Europeans by 2010. And high-speed internet broadband for all Europeans by 2013.The “first movers” in Europe have already started implementing these targets: The French government, with its plan France Numérique 2012, is pursuing the objective to equip all French households with an internet connection of at least 512 Kbit/s by the end of 2012. In the UK, Lord Carter told us, in his ambitious Digital Britain report, that the government sets the objective to serve all British households by broadband networks of at least 2 Mbit/s by the end of 2012, eased by the creation of a Next Generation Fund. In Germany, the federal government, in its Breitbandstrategie, calls for connections of 50 Mbit/s to serve 75% of the population by 2014. Finland has even committed to a universal broadband service at 100 Mbit/s . These are examples of countries who got their priorities right. They all have recognised the need for boosting the digital economy.

To promote competitive infrastructures for a Digital Europe, there are four concrete steps we can and should take in the next months:

• First of all, we need to bring into force the reform of Europe’s telecoms rules [...]
• Secondly, we should encourage effective competition and sustainable investment in Next Generation Networks – in particular into fibre networks instead of copper ones [...]
• Thirdly, I believe we should make 3G mobile phones services more attractive in Europe and pave the way for LTE, the next generation of mobile services [...]
• Last but not least , I believe the present economic crisis requires us to accelerate the ongoing switchover from analogue to digital TV in Europe . T he switchover will free very valuable radio spectrum, currently used by terrestrial analogue TV, for use by new communications and content services. This process has already been completed in Germany, Finland, Luxembourg, Sweden, the Netherlands, in Flanders here in Belgium as well as in major areas in Austria. The Commission estimates that t he incremental value of this spectrum for wireless broadband across the EU is between €150 and €200 billion. Appropriate European coordination of Member States’ work on the digital dividend would increase the potential economic impact of the digital dividend by an additional € 50 billion between now and 2015. Every corner of Europe could reap this “digital dividend”, without it costing the taxpayer a single cent – if all EU governments act now. I recall that the United States as a whole switched to digital TV last month. I call therefore on all EU governments: Don’t wait until 2012, the EU-wide deadline for the final analogue switch-off, to bring these benefits to you businesses and citizens. Act swiftly now. Tomorrow I will present a package of draft measures in order to accelerate Europe’s digital switchover. I hope that these proposals will receive a positive reception in the public consultation and by that contribute to a more positive economic attitude. As Ludwig Erhard always stressed: 50% of macro-economics are psychology.

Digital Priorities for the next five years

1. My first and most important priority for Digital Europe is: To make it easier and more attractive to access digital content, wherever produced in Europe. The availability of attractive content that appeals to European viewers, listeners and readers will be decisive in driving further the take-up of high-speed broadband internet. It is therefore regrettable that we currently have an extremely polarised debate on the matter: While many right holders insist that every unauthorised download from the internet is a violation of intellectual property rights and therefore illegal or even criminal, others stress that access to the internet is a crucial fundamental right. Let me be clear on this: Both sides are right. The drama is that after long and often fruitless battles, both camps have now dug themselves in their positions, without any signs of opening from either side.

In the meantime, internet piracy appears to become more and more “sexy”, in particular for the digital natives already, the young generation of intense internet users between 16 and 24. This generation should become the foundation of our digital economy, of new innovation and new growth opportunities. However, Eurostat figures show that 60% of them have downloaded audiovisual content from the internet in the past months without paying. And 28% state that they would not be willing to pay.

These figures reveal the serious deficiencies of the present system. It is necessary to penalise those who are breaking the law. But are there really enough attractive and consumer-friendly legal offers on the market? Does our present legal system for Intellectual Property Rights really live up to the expectations of the internet generation? Have we considered all alternative options to repression? Have we really looked at the issue through the eyes of a 16 year old? Or only from the perspective of law professors who grew up in the Gutenberg Age? In my view, growing internet piracy is a vote of no-confidence in existing business models and legal solutions. It should be a wake-up call for policy-makers.

I f we do not, very quickly, make it easier and more consumer-friendly to access digital content, we could lose a whole generation as supporters of artistic creation and legal use of digital services. Economically, socially, and culturally, this would be a tragedy. It will therefore be my key priority to work, in cooperation with other Commissioners, on a simple, consumer-friendly legal framework for accessing digital content in Europe’s single market, while ensuring at the same time fair remuneration of creators. Digital Europe can only be built with content creators on board; and with the generation of digital natives as interested users and innovative consumers .

I will give you two examples of what Europe could do concretely for this:

• First of all, we could facilitate the licensing of intellectual property rights for online services covering the territory of all 27 EU Member States . Today, right holders and online service providers need to spend far too much time and money on the administration of rights, instead of investing this money in attractive services. And consumers often cannot access online content if uploaded in another Member State. For online content in a single market of 27 Member States, economies of scale and consumer-friendly solutions will require a much simpler and less fragmented regulatory framework than the one of today. We had a similar problem when commercial satellite TV started more than 30 years ago. As right clearance for this per se cross-border service became increasingly complex, Europe developed the Cable and Satellite Directive and introduced a simplified system of rights clearance for the whole of Europe. I believe it is now time to develop similar solutions for the evolving world of online content.
• Second example: We should create a modern set of European rules that encourage the digitisation of books . More than 90% of books in Europe’s national libraries are no longer commercially available, because they are either out of print or orphan works (which means that nobody can be identified to give permission to use the work digitally). The creation of a Europe-wide public registry for such works could stimulate private investment in digitisation, while ensuring that authors get fair remuneration also in the digital world. This would also help to end the present, rather ideological debate about “Google books”. I do understand the fears of many publishers and libraries facing the market power of Google. But I also share the frustrations of many internet companies which would like to offer interesting business models in this field, but cannot do so because of the fragmented regulatory system in Europe. I am experiencing myself such frustrations in the context of the development of Europeana, Europe’s digital library. Let us be very clear: if we do not reform our European copyright rules on orphan works and libraries swiftly, digitisation and the development of attractive content offers will not take place in Europe, but on the other side of the Atlantic . Only a modern set of consumer-friendly rules will enable Europe’s content to play a strong part in the digitisation efforts that has already started all around the globe.

2. Priority two on my to-do-list for Digital Europe is: preparing for a safe and consumer-friendly European space for mobile payments. Today, the lack of common EU-wide standards and rules for “m-cash” leaves the great potential of “m-commerce” and the mobile web unexploited. W e have more than 500 million mobile users in Europe. This means that Europe has the economies of scale to offer for an innovation-friendly environment that will allow transforming the mobile phone into an electronic wallet. Very quickly, we could see the mobile phone being used for buying most day-to-day items electronically, such as tickets in a station, sodas from a vending machine or flowers in a shop. This would make life easier for consumers; and open up new business opportunities for European companies.

3. My third priority for boosting the digital economy is: Europe’s digital economy should be opened up to small businesses. In Europe, we have 23 million small and medium sized enterprises (SMEs) which make up 99% of all firms. Accounting for over 100 million jobs, SMEs can be the mainspring of Europe’s economic resurgence. But in the use of productivity-boosting ICT tools, SMEs lag substantially behind big firms: only 9% of SMEs use electronic invoices, and only 11% of them have technology-based human resource management. If SMEs could access computing power over the web, they would no longer need to buy and maintain technologies or IT applications and services. Such web based services – called “cloud computing” – are the medicine needed for our credit squeezed economy: they can make businesses more productive by shifting from fixed costs (i.e. hiring staff or buying PCs) to variable costs (i.e. you only pay for what you use). However, today these new services are nearly all US-owned and US-based. Once again, the US has started to exploit a business model before Europe has managed to do so. We cannot let this continue. In my view, we need a major effort to set up Europe-hosted “clouds” to give European SMEs access to fast, open and productivity enhancing services. A recent study estimated that online business services could add 0.2% to annual GDP growth, create a million new jobs and allow hundreds of thousand of new SMEs to take off in Europe over the next five years. So what are we waiting for?

4. My fourth priority for Digital Europe is: making better use of innovative ICT solutions to meet our objectives of a low-carbon economy . This aspect is still neglected in our ongoing work to prepare with ambition for the Copenhagen Conference at the end of the year. Just consider the following: If businesses in Europe were to replace only 20% of all business trips by video conferencing, we could save more than 22 million tons of CO 2 per year. And cloud computing could, by helping to improve the efficiency of IT solutions, lead to electricity savings in computing activity of up to 80%. Let us also not forget what ICT could do for safer, smarter and greener cars in Europe. I firmly believe that Digital Europe cannot afford to turn a blind eye to its ecological potential, which in turn can open up new business opportunities for European ICT companies. We will therefore have to add some “green” to Ludwig Erhard’s social market economy.

Nielsen reports figures for US advertising market in 2008, almost all measures show downward trend from 2007 figures

• total US ad spend down 2.6% – from $140.5 billion to $136.8 billion
• Broadcast network tv down 3.5%
• Spot TV top 100 down 0.3%
• Internet down 6.4%
• Cable TV up 7.8%
• Hispanic cable tv up 9.6%

TV is still the dominant advertising medium, with 60% of total ad spend.

Top ten advertisers total spend was down 15% to $15.5 billion.  Biggest falls registered by car manufacturers (as a sector, down by 15.5%), pharmaceuticals (down 18.4%) and motion pictures (down 11.4%).

Among media and communications companies in the top 10, Time Warner down almost 24%, Verizon Communications down 1.3%, AT&T down 7.2%.

The only product categories registering rises in total ad spend in 2008 were “Quick serve restaurants” and “Direct response products”.

As reported here in Variety, Nielsen is reporting record levels of TV viewing in the US for the fourth quarter of 2008. Apparently the average American over the age of 2 watched 151 hours of TV per month (that’s c.5 hours per day), up from 146 hours in same period 2007. The article notes

More watching of recorded TV explained some of the increase: that was up to 7 hours from 5 hours the year before. That included digital video recorders like the TiVo and “Start Over” features offered by some cable companies.

Among those who watch video on the Internet and on cell phones, the time spent viewing increased from the third quarter, but at much lower levels. The average user of Internet video spent two hours and 53 minutes on that per month, Nielsen said

In a separate report out Monday, Leichtman Research Group said only 1 percent of adults view recent TV shows online daily, and they’re no more likely to consider disconnecting their TV subscriptions.

Leichtman’s findings were based on a survey of 1,250 households last year.

The Leichtman study is summarised in a press release from the company here.

Meanwhile on February 10, the peak advertising industry body in the UK, the Institute of Practitioners in Advertising, released its Q4 2008 Trends in Television report. The report notes average daily viewing in UK is almost 4 hours, the highest for Q4 since 2004.  Digital reception is at 86%, with ‘non-terrestrial channels’ gaining 40% viewing share. The full report is available to IPA subscribers.

Mike Walsh, trendspotter, digital futurist and researcher, has just posted on his blog a summary and videos relating to a research project he’s just completed for CASBAA, the Cable and Satellite Broadcasting Association of Asia, on online video in Asia.  It makes fascinating reading (and watching). The emphasis is on the power of audiences; the second video ends with the statement that “Audiences not media moguls will reinvent the experience of television”.

The videos are worth watching, so I’ve embedded them here for ease of access.  Below the videos is Mike’s summary of the highlights of his findings.

My take-aways from this were:

• much lower % of UGC viewed and created in China, Korea and Japan than in US, Australia, UK
• free is the norm, but “dealing with free will be the biggest challenge”. Online video sites and content producers getting around this in various ways. Tudou which claims to be the largest video sharing site in China, is ad supported “we introduced our video advertising system in 2007, where we show full screen pre-roll ads while the actual video loads as well as full screen wallpaper ads around the video during playback”, but they are negotiating licences with content producers.
• average time spent on an online video site is c.1 hour, (according to one of Tudou founders) compared with c.7-12 mins for YouTube.
• most people (in China) find out about online videos through Instant Messaging from friends (email is much less widely used than in the west)
• a recent Chinese movie, Red Cliff, was released through all the online video download sites in China on a unique format that forces users to watch ads before the movie. That is, it was ad-supported

Part One

Part Two

Here are a few of the insights from the report:

1. The Internet has become a primary entertainment destination.
For young Asian consumers, the Internet is entertainment – particularly in China. A survey by the China Youth Daily and Sina in January 2008 indicated that more than 80% of young Chinese placed the Web as their primary source of entertainment compared to TV, at 66%.

2. Social discovery drives the popularity of content rather than traditional programming or marketing campaigns.
When it comes to the discovery of content – blogs, referrals through instant messaging clients, BBS boards, and top ten lists on video sharing sites have the most influence. In China, according to the CNNIC 63.7%, of video content is discovered through social connections, 94.1% of this sharing taking pace instant message tools such as QQ and MSN.

3. Long form professional content is the most popular format
Although the West is just now getting a taste of long form video on the web, in Asia it has been the most popular format for a while. 86.3% of the online video watched by Chinese netizens is either studio created films or TV shows. In Korea, 47% of users had illegally downloaded at least 55 movies a year, or more than one a week.

4. Audiences actively participate in content experiences
In Japan, the most popular video sharing site is Nico Nico Douga (Smiley Smiley Video) attracts almost a billion page views a month. The most distinctive feature of the site is an on-screen commenting function, where user messages scroll as commentaries across the video while playing like a form of visual karaoke.

5. Consumption is communal
Asian teenagers enjoy being online together. China has about 113,000 licensed Cyber Cafes, with many more operating illegally while in Korea, despite strong home broadband connections, most youth prefer to socialise in one of the 26,000 PC Baangs.

6. User anonymity is important
One of the major differences between Western and Eastern online users is the importance of privacy and anonymity. Most Japanese online users prefer to use imaginary names and cartoon avatars rather than photos to represent themselves while in China, much of the attraction of bulletin board systems is the ability to post comments without revealing your actual identity. YouTube in Japan after attempting to encourage greater amounts of user generated content is now focused on the more culturally acceptable practice of uploading cute pet videos.

7. Local brands dominate the online video landscape
For both cultural and technical reasons, local video sharing sites in Asia have generally been more successful than foreign players such as YouTube. In Japan, Nico Nico Douga is very popular, in Korea the dominant site is PandoraTV while in China, the top two sites are Youku and Todou.