Technological Drivers of Change in the Media Environment

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Technological Drivers of Change in the Media
Environment
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Principal Drivers of Change

• Computer processing power continues to double
  every 18 months at no increase in price.
  (Moores Law)
• The cost of digital storage is dropping by 50
  every 10 months.
• e.g. 200 GB hard drive - 89 (Staples this week)
• Advances in audio/video compression continue,
  squeezing increasing amounts of information down
  same-sized channels or pipes, increasing choice

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Principal Drivers of Change

• conversion from analog to digital cable results
  in 8-fold increase in channel choices in same
  cable bandwidth
• conversion from analog to digital broadcast TV
  results in 4-fold increase in number of standard
  definition program streams
• Satellite distribution of audio, video and data
  provides increasing number of channel choices
  (e.g. DirecTV, DishTV, Sirius Radio, XM Radio)

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Principal Drivers of Change

• Digital file formats facilitate cross-platform
  exchanges
• manipulation of content for reception, storage,
  display, playout on various devices from cell
  phones to large-screen HDTV displays
• convergence of functions e.g. cell phones and
  handheld devices which do everything
• Shift to Internet Protocol provides
  interoperable language for voice, audio and
  video

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Principal Drivers of Change

• Bandwidth to homes, schools, businesses continues
  to increase
• high speed broadband now in more than 40 of US
  homes, emerging as audio and video distribution
  platform side-by-side with broadcast, satellite
  and cable
• fiber to the home supplementing hybrid fiber/coax
  and copper for video, telephone, broadband service

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Principal Drivers of Change

• Verizons (and other Baby Bells) fiber to the
  premises now being deployed in Verizon and
  ATT/SBC territories
• nominal capacities
• fiber-optic cable 400,000 mbps
• hybrid fiber/coax 850 mbps
• copper twisted pair 10 mpbs

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Principal Drivers of Change

• Shift from wired to wireless technology
• omnipresent wireless connectivity with cell
  phones, WiFi, WiMax, PDAs as universal handheld
  multimedia devices for data, audio, video,
  telephony
• cities deploying universally-available wireless
• high-speed Internet access now being seen as a
  principal driver of economic development,
  educational access

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Principal Drivers of Change

• proliferation of GPS-equipped receivers/display
  devices facilitates delivery of location-specific
  content and services

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Principal Drivers of Change

• increasingly sophisticated database management
  and data mining capabilities enable
  personalization/ customization to match
  consumers, users with content in which they are
  interested
• assisted by collaborative filtering, recommender
  systems, relationships engines (others who
  ordered this book also ordered . .)

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Principal Drivers of Change

• increasingly sophisticated search tools
• applying category schemes and sampling to narrow
  search results
• Google and Yahoo audio/video search services,
  soon Microsoft
• check out (in beta)

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Principal Drivers of Change

• miniaturization, wearables, incorporate
  ever-smaller computer devices into everyday
  objects, including clothing
• likely emerging use of nanotechnology, RFIDs in
  retail, media applications

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Consequences
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Consequences

• Consumers becoming used to accessing whatever
  content they want, when they want it, and
  whatever display device is most convenient
• Shift from real-time to non-real time use of
  content using DVRs/PVRs, video on demand
• Broadband facilitates on-demand distribution,
  emerges as real time/non-real time
  audio/video/interactive distribution platform

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Consequences

• Increasing capacity of packaged media (e.g.
  HD-DVDs)
• Proliferation of iPods, MP3 players, podcasting,
  video iPods
• Videogames emerging as content platforms for
  education and training, as well as for
  entertainment, storytelling, on-line connectivity

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Consequences

• evolution of home media servers for storing,
  serving digital assets (movies, music, family
  photos, etc.)
• TiVo, DVRs, cable and satellite set-top boxes
  battling for position

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Consequences

• Technologies which ignore geography (e.g.
  Internet, satellite, wireless) erode geographic
  market boundaries
• exacerbate battles between wholesalers and
  retailers over who delivers services directly to
  consumers
• local becomes global, e.g. audio/video streaming
  on line

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Consequences

• Once content is in digital form, there is no
  technical reason why any content ever needs to go
  out of print
• (The Long Tail phenomenon)

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Consequences

• Slingbox (199) relays any TV programs you can
  receive in your home (from broadcast, cable, or
  satellite) to an Internet-connected PC anywhere
  in the world
• provides full control of your home TV or DVR from
  any distant location (even if someone else is
  watching at home) extending the battle for
  control of the remote well beyond the family room
  couch

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Consequences

• for media producers and distributors,
  accelerating audience segmentation/ fragmentation
• erosion of effectiveness of interruption
  marketing, e.g. commercial advertising,
  traditional on-air fundraising ubiquitous use of
  product placement in commercial media

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Consequences

• Google advertising model uses consumers search
  preferences to identify areas of interest,
  provides sponsored links to content and service
  providers who may have related products
• facilitates self-selection of communities of
  interest organized around specific interests

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Consequences

• Google Advertising Model turns the traditional
  advertising model on its head
• John Wanamaker (founded first US department store
  in mid-1800s)
• "I know half the money I spend on advertising is
  wasted, but I can never find out which half.
• If he were alive today, he would be closer to
  knowing.

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Consequences

• Lowered threshold to entry for content creators,
  distributors
• e.g. cell phone camera video in news programs
• Equipment cost to achieve high technical quality
  also declining
• High Def pro-sumer cameras available for less
  than 5,000 desktop HD editing for 300.

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Consequences

• technology facilitates interaction between
  content/service providers and their audiences
• audiences no longer necessarily anonymous to
  communicators or to each other
• facilitates interactivity, not just two-way but
  peer-to-peer
• Markets are conversations -

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Consequences

• critical need for content and service providers
  to understand viewers and listeners
  increasingly-complex media use behaviors

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Consequences

• decreasing ability of legacy audience measurement
  tools to track increasingly-complex media use
  behaviors
• Nielsen having difficulty tracking use of DVRs,
  VoD, broadband, let alone tracking viewing of
  hundreds of conventional video choices,
  multi-tasking with Internet use
• sample-based measurement being replaced with
  proprietary direct measurement technologies
  enabled by two-way connections between
  distributors and consumers (e.g. cable set-top
  boxes, TiVo)

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• THE audience research question
• Whats the job theyre hiring us to do?

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NPS RESEARCH

• PTV shows the types of programs that I cant
  find anywhere else
• The diversity of PBS programs is personally
  appealing to me
• PBS programs allow me to see the topics they
  cover from many different points of view

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NPS RESEARCH

• Compared w/ programs on other types of stations,
  I really pay attention to PBS programs
• PBS provides programs that appeal to a wide range
  of interests
• Watching PBS programs makes me feel better about
  myself.

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Technological Drivers of Change in the Media
Environment
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