Today’s breaking news: a digital revolution, with impact factor 10, hit the media sector yesterday… Prof. dr. Caroline Pauwels VUB / IBBT-SMIT.

Today’s breaking news: a digital revolution, with impact factor 10, hit the media sector

yesterday…

Prof. dr. Caroline PauwelsVUB / IBBT-SMIT

HEADLINE 1

Historians report a new era,driven by ICT innovation

The infrastructural networks are the platform for change & competitiveness

THE AGE OF INFORMATION TECHNOLOGY

Global digital telecommunicationsand ICT support networks

Electricity, telephone, highways and airways

THE AGE OF OIL, THE AUTOMOBILEPETROCHEMICALS

AND MASS PRODUCTION

THE AGE OF STEEL ELECTRICITY

AND HEAVY ENGINEERING

Transcontinental communications:Steamships, railways and telegraph

THE AGE OF RAILWAYSCOAL AND THE STEAM ENGINE

Railways, penny post and telegraph

THE “INDUSTRIAL REVOLUTION”IN ENGLAND

Canals, turnpike roads and mail coaches

Innovation curves (Carlota Perez)

Source: C. Perez

The infrastructural networks are the platform for change & competitiveness

THE AGE OF INFORMATION TECHNOLOGY

Global digital telecommunicationsand ICT support networks

Electricity, telephone, highways and airways

THE AGE OF OIL, THE AUTOMOBILEPETROCHEMICALS

AND MASS PRODUCTION

THE AGE OF STEEL ELECTRICITY

AND HEAVY ENGINEERING

Transcontinental communications:Steamships, railways and telegraph

THE AGE OF RAILWAYSCOAL AND THE STEAM ENGINE

Railways, penny post and telegraph

THE “INDUSTRIAL REVOLUTION”IN ENGLAND

Canals, turnpike roads and mail coaches

Source: C. Perez

Innovation curves (Carlota Perez)

1. New entrants, new products & services and new organizational principles

2. Search for new business models3. Old actors refuse to adapt disappear!

during this presentation:

A REVOLUTION?show us the figures!

14.000.000status updates

60.000new photos

on Flickr

260.000music streams

on Pandora

26.000.000videos viewed

on YouTube

2.000.000tweets

IT’S ALL ABOUT CONNECTIVITY

HEADLINE 2

• In 2020 6,8 connected devices per person

• By 2020 more than 50 billion connected devices

• The number of mobile devices will exceed world’s population by 2012

• In 2014: 50% of the households will have a smart TV connected to Internet

A connected device revolution

HEADLINE 3

CONVERGING YET CLASHING:NEW ACTORS APPEAR, OLD ONES REFUSING TO ADAPT DISAPPEAR

• Innovation leads to explosion of ever new players at a never seen pace: Google barely 13; Youtube 7; Spotify 6, Facebook 8

• Innovation comes mainly from global, US based and ICT driven firms…

• Who prosper on creating convenience of use rather than on creating original content

Innovation creates shifting power relations between (1) media companies, (2) telcos, and (3) consumer electronic companies

Media industry

Content creation, contribution and production technology

Consumer electronics industry

Consumer platform and application technology

Telecom

Industry

Media delivery technology

Source: Technology Strategy Update, based on Lieven Vermaele, EBU 2011

Battle for the consumer

Struggle for big data

Monetization?

?

Content industry networks: cooperation, consolidation, concentration?

Source:Future Of Media Report,Future Exploration Network, 2006

HEADLINE 4

CONTENT DRIVEN REVOLUTION, YET ABUNDANCE & OVERLOAD

200926hrs/min videoon youtube

201035hrs/min videoon youtube

201148hrs/min videoon youtube

years of contentevery day

> > 8billion videosconsumed daily3

photos/sec60iPhone 4

most popularcamera on Flickr

trillion of videoplaybacks on youtube (in 2011)

1

billion minutes called/day1.3

billion movieslegally consumedthrough streamingIn 2012

3.4

billion photostaken in 2011

380

million hoursspent on onlinegaming in 2012

407+22

million grouponssold in US alone

Service and apps revolution

• Towards an app-economy:– Apple app store: 659.936 total active apps, 532 app

submissions/day– More than 24 billion downloads (in less than four years)– “App economy” has created about 466,000 jobs in the US alone– Apple paid over $4 billion to app developers

• Social media as the new service– More than 900 mio users on Facebook– 1 in 7 minutes online are spent on facebook– 600 tweets a sec – 50 mio / day– Social media (27,8%) equally used as newspapers (28,8%) as news

source

• Abundance vs. attention as a scarce commodity

• Selection made through friends and trusted brands or

• are filtering algorithms the new gatekeepers?

• Is qualitative, long term creative content a scarce commodity in Europe? Who will pay for that?

HEADLINE 5

CONSUMER IN THE DRIVER SEAT: ?

Consumer evolution

• Homo digitalis entered the scene: consumption of traditional media declines– More ebooks than printed books sold on Amazon

• Right here, right now: towards an on-demand consumption– Rise of video-steaming services, VOD and time

shifting– Mobile consumers watches more media on their

mobile devices than on their TV-set• Snack-culture: fast consuming• A multi-device / multi-screen use

– From PC over tablet to smartphone– Simultaneous use (eg. second screen)

• Out of control? Old habits die hard, but some very

disruptive behavior P2P downloading & Piracy In times of abundance -> lower

willingness to pay Ad skipping …

• In control? UGC and pro-ams: the amateur

& the professional meet Techno savvy consumers Trend to legal payment models Personal data about consumer as the

new currency vs privacy considerations Internet anti piracy regulation vs

freedom of expression …

HEADLINE 6

MONEY MAKES THE WORLD GO AROUND: ABOUT ANALOGUE POUNDS & DIGITAL

PENNIES…

• Perception of internet as free• Ads are everywhere: deflationary

pressure on value of the ad product• Subsidies stabilized, but pressure • Legal pay models on rise: 10 Euro limit• Crowd financing… • If economic relapse -> pressures raise

on R&D & ads• Revenues probably will have to be

based on AND, AND & AND scenario: Is revenue diversification worsification?

• Media sector definitely in need of new organisation models: costly, yet also, new opportunities to create, monetize..Annual revenues mobile/internet advertising – IAB (2012)

The good old days are over…. But the best is yet to come!

Thank you!Have a nice conference!

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