Friday, December 31, 2010

2010 Review and Key Content Trends for 2011: Changing Channels

As 2010 fades into the past, it is interesting to reflect on a year in which many established content companies that had resisted the pre-eminence of the digital era finally came to terms with their digital futures. In 2010 publishers finally accepted that online-first publishing was their only path to a profitable future and began to staff, edit, format and market their content services accordingly. We heard a lot of rumbling about paywalls in 2010, and there were some reasonably successful debuts for subscription based content, such as television's Hulu Plus portal, but for the most part publishers refrained from throwing up paywalls for their own sake. The notable exception to this new wave of premium consumer news content, The Times of London, has yet to break even on their all-or nothing online content proposition.

Yet premium content is becoming more of an accepted presence in digital markets. The latest Pew Internet research indicates that 65 percent of people in the U.S. using the Internet have paid for some form of content online. When something returns the right type of value, people are willing to pay for that value. The problem for most publishers, though, is that those value points have shifted radically in many instances. A well-designed mobile software application that delivers useful content and services is at least as likely to get an audience's share of wallet for content as pure editorial prowess - usually for far less money individually than traditional publishers have expected for their all-singing, all-dancing major networks, newspapers and magazines. The New Aggregation allows people to paint their own front pages, sometimes with the help of software and sometimes with the help of their social networks and trusted bloggers. Great editorial skills can survive and thrive in this environment, but only when they know how to live with The New Aggregation and not ignore it.

Many publishers saw tablets and ebook readers that bloomed in 2010 as potential saviors for their traditional business models. Certainly Apple's iPad transformed many people's thinking about mobile digital content and triggered some very interesting experiments in new formats for electronic magazines. The explosive growth of ebook sales finally delivered on the promise of digital books, transforming retailers like Barnes & Noble and giving enhanced distribution power to Amazon and emerging channels for distributors and authors such as Sony and Google. Yet in the midst of these successes was the realization by many authors that their success relies less and less on traditional publishing houses and increasingly on digital partners who can help them to market to "The Long Tail" of people interested in their topics with more money sent to their own pockets. Hits-oriented publishers  and producers are finding thinner and slipperier ground on which to tread for success in large-market media as small to medium-sized producers leverage online channels for greater success.

Google was very much in the spotlight in 2010, but not always for reasons that seemed promising. Its Android operating system for mobile devices, largely derided as a klunky also-ran at the beginning of the year, surged to a position of global dominance by the end of the year, powering smart/super phones, tablets, television services and many other devices that integrate Web content into mobile experiences. The "ugly duckling" now looks like an open-source swan, sprouting many advanced features like Near-Field Communications and well-integrated voice-over-IP telephony that promise to broaden Google's mobile market influence. But there were also major pratfalls for Google along the way. Google pulled the plug on its Wave collaborative service, fumbled security and features design in its launch of its Buzz social media service and faced far more sophisticated competition from Microsoft's Bing search portal.

Google's missteps helped to empower an almost unopposed rise of Facebook as the premier destination on the Web, according to some recent measurements, with Twitter continuing to rise as the de facto real-time headline service for both personal and mainstream media communications. Social media's Content Nation is clearly at the center of influence in Web communications, with hardly any piece of content lacking the ability to be shared easily on Facebook or Twitter. These services also expanded their presence as default login capabilities for social media services embedded in online services, making it easier for people to bring their movable feast of contacts to new online venues. Comments and discussion still thrive in online media sites, but increasingly they're managed using third party social networks that bring people's personal influence to the party.

In enterprise content, major subscription services fared reasonably well in 2010, but found themselves adjusting rapidly to an era in which traditional packaging and channels are being exploded by customers expecting content to be delivered in more valuable contexts in a more on-demand fashion. APIs are sprouting up in industry sectors such as health and scientific publishing, enabling content to be repurposed more rapidly for new audiences and to allow experts to share their filters and tools with their peers and colleagues. Semantic processing is at the heart of many of these API-driven approaches to making professional content more valuable, enabling new sources of information to become newly valuable and enabling a broader range of traditional professional content to be more valuable in new contexts.

Finally, regulations and governments loomed as "X" factors in 2010, establishing ground rules that are likely to influence content creation and distribution for years to come. The U.S. Federal Communications Commission issued new rules that codify so-called "Net Neutrality" for landline-based Web services, preventing telecommunications carriers from charging a premium for specific types of content access. But the FCC was more open-ended in its approach to today's mobile networks, leaving the door open to both similar enforcement of Net Neutrality while allowing carriers some flexibility in setting tiered access charges. Beyond existing mobile networks, though, lies new slices of the radio spectrum reserved for mobile services that will be made available more in line with the Net Neutrality standards of land lines. Mobile carriers will be allowed to make easy money on mobile services for a while longer, but the Web model of flat access looms large, still.

What does this all mean for 2011? Our major theme for 2011 at Shore is "Changing Channels," underscoring the importance of content producers and content technology companies being able to adapt rapidly to audiences who are not only changing their content consumption and production patterns rapidly but who are also demanding content that can shift from whatever device or context they need in the moment with a minimum of fuss. A signature example of the "Changing Channels" trend can be found in today's new video display technologies that are integrating mobile devices and traditional televisions. Google's YouTube Leanback Remote app, for example, allows people to view and queue up videos found on YouTube on Android-equipped mobile phones, then "fling" them onto the screen of a television equipped with Google TV. When the TV switches to another source of content, the videos revert to playing automatically on the mobile phone.

This type of ease for cross-platform content consumption will pressure content producers to ensure that their content can flow effortlessly onto whatever device their audience is using in the moment. The ability of ebook readers used on multiple devices to synchronize one's progress in reading a book is a simple example of what audiences expect. Be it through pre-formed services, services designed by users or through social media services, the value in content will come in 2011 to those services that manage these channel-changing habits with the greatest ease and power.

Key technologies and trends to watch out for within the "Changing Channels" world of 2011 include:
  • More powerful mobile processors. Many of 2010's breakthrough mobile technologies were powered by CPU processor chips running at 1GHz, offering enough processing power and speed to turn mobile smart phones and tablets into credible Web access tools. 2011's computer processing technologies will be evolutionary by comparison, but still offering important breakthoughs. We will see the debut of multi-core CPU chips and more enhanced graphics processors in mobile devices, making high-quality, high-bandwidth videos, interactive magazines and games more enjoyable. 4G data networks offering increased data bandwidth - often at new premium price points - will take advantage of this improved access to video content.
  • More sophisticated human interfaces. The touch-driven screen interface was the breakthrough command interface for 2010, enabling a wide variety of devices to make access to content more intuitive and simple. But voice and gesture interfaces are making touch screens just one portion of a computing environment in which people think less about technology when accessing content services. Quietly Google has become a leader in voice recognition technologies for accessing both mobile services and Web content and enabling people to turn their spoken words into text accurately and text into spoken words. Some of these services are beginning to break through the language barrier, enabling large bodies of content to be made available to new audiences across those barriers.

    Microsoft's Kinect gaming interface, which translates the motion of the human body into computer commands without any handheld device, has been adopted by a legion of inventive minds who are applying Natural Interaction (NI) interfaces like Kinect to a wide array of consumer and professional content services. The long-heralded debut of Near-Field Communications (NFC), which enable secure transmission of RFID-style data at ranges of just a few centimeters, will also surface in 2011, enabling new styles of payment and information communication that will change both ecommerce and content services. Combined with pervasive GPS-enabled information services that know where we are with our mobile devices and there will be a wealth of new ways to communicate in valuable ways in 2011.
  • Integrated media via Web-based apps. There have been many interesting examples in 2010 of media that integrates text, video, audio, graphics and interactive features, but most of these have been prototypical stabs at how existing editorial resources can be repurposed. In 2011 we'll see the power of Web-based applications beginning to rise, not entirely overshadowing the importance of mobile apps native to specific devices but underscoring the need to service audiences who are shifting from one sophisticated Web-enabled device to another rapidly and seamlessly. We'll see less reliance on the storefronts of specific vendors for delivering apps and rights-protected content and more reliance on contextualizing them for direct delivery via social media via ratings and recommendations and context-specific encoding in print and locations such as QR codes.
  • Social media embedded everywhere. While Google dropped the social media ball big-time in 2010, expect that they will offer the Web a new way to look at integrating social media in 2011. Their new initiatives promise to make every page of Web content social media-enabled, flipping the Facebook model on its head and potentially offering more sophisticated ways to manage personal networks within this distributed framework. This will not diminish the power of Facebook any time soon, though; it remains the most powerful venue for reaching audiences via conversational marketing. In 2011 we'll see that the "where" of social media is far less important than the "how" of social media. Expect new competitors focused on open Web access, consolidation of services that are better as integrated features and more sophisticated management of personal networks and groups that help people to tailor their social media messages to specific audiences.
  • The twilight of the PC. No, PCs will not disappear overnight, especially in professional settings where change comes slowly and in millions of homes where gamers, personal businesses and content creators expect to wring the most out of existing technologies. But whether it's through mobile phones, tablets or Google's nascent Chrome OS, there are fewer reasons than ever to avoid Web-based cloud computing services that focus most local or handheld technologies on making the most out of network-delivered content services. If you have a PC, it may be the last one you'll ever buy. After nearly thirty years of these little gizmos, that's a startling thought.
  • More natural semantic content organization. The long-heralded "Semantic Web" that promised machine-based organization of all content based on sophisticated human concepts never quite seemed to arrive in the eyes of many people, but in fact semantic content processing is everywhere today. It's so natural in may ways that we don't notice it. Our search queries are longer and being interpreted more accurately. Automated news collection services such as Google News, Daylife and Instapaper do a very credible job of surfacing relevant content organized around truly relevant topics. And anaytics software is able to transform almost any stream of digital information in text, audio or video format into meaningful human patterns for interpretation and monetization. Cross-language semantics will be one key area of advance in this arena in 2011, but expect semantic processing to become far more pervasive in organizing and shaping the creation of content more automatically through well-managed digital assets.
  • The rebirth of print. No, I am not saying that traditional print publications are going to regain lost audiences any time soon. But in from the ashes of the old print industry we'll start to see in 2011 the rise of powerful new and reinvigorated models for delivering value in physical media. Print-on-demand publications, limited largely to books today, will begin to broaden into more magazines and news-oriented media. Will this mean that we'll see Instapaper or Google News printed out on our doorsteps? Probably not. It's more likely that delivered print media will be focused on more immersive and focused topics and include quick links to Web-based content via QR codes and, eventually, paper-embedded NFC devices.
  • Cracks in the empires. From one perspective, the control of media production and distribution is more centralized than ever. Yet the cost-efficiency and flexibility of standards-based Web content distribution is enabling sophisticated and engaging content to be produced increasingly by small and medium businesses and by individual creators who are able to monetize it more easily than ever before. While mainstream media outlets tend to focus on themselves incessantly, the truth is that the world focuses on them less and less. As services like Google TV and Netflix begin to mature in 2011 and provide more quality content, more people will be signing off of cable and satellite subscription services and living with Web-delivered video content full-time. The one key exception to this tend will be live data and events, which will offer the immediacy of value that alternative services will be hard-pressed to replace. Book publishers will thrive through enhanced ebook sales, but struggle with authors and new distribution channels that make it harder for them to profit from new generations of content creators. Sometimes bigger is better in media, but the definition of what constitutes value in "bigness" is likely to be questioned more than ever in 2011. Ad agencies will struggle to transform themselves into contextual marketing services in 2011, catching up with many of the changes in their core of clients who are succeeding increasingly via their own direct publishing capabilities.
  • Enterprises get mobile. Mobile information services are already a part of the picture for many enterprise information services, but as the security and value of mobile platform begin to accelerate mobile and cloud-based content platforms as their default, cost-effective communications media. Enterprise I.T. will not disappear overnight, but as cross-platform communications services become more essential to the productivity of enterprises, expect that subscription enterprise services will have to follow these migrations rapidly and cost-effectively. This will mean the acceleration of API-based content service development, enabling third party partners to service customers via many niche applications, the best of which may be acquired by enterprise information services. Security issues for mobile services will be highlighted in 2011, but the value of these services will place investment not in avoiding these risks via other platforms but in solving them, often on new platforms that have not been a traditional part of the enterprise I.T. mix.
There are certain to be more things emerging in 2011 that we're not covering in this very brief overview, but I think that this is a good broad canvas that depicts the major trends faithfully. How will your operations survive and thrive in a world of changing channels? We at Shore are always glad to help you answer that question, of course. Have a great 2011, no matter what channel you find yourself on.
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