All entries for February 2007

February 17, 2007

Lex Column on EMI futures

Follow-up to Steve Jobs and Digital Rights Management Systems from Kinoeye

Lex on EMI 17/02/07: Is there value in a busted flush?

Well its good to be marginally ahead of Lex the 'agenda setting' FT column. Today's was talking about EMI amongst other things.  You'll need a free trial to read the full account which starts off nicely with the comment:

EMI and Warner Music appear locked in a race to the bottom. This year, both listed music groups have seen their shares plunge by about 20 per cent. Since July last year, when merger talks broke down, they have tumbled 30 per cent and 40 per cent, respectively.

The column later notes that having entered into merger talks three times perviously this would be an especially propitious time to merge. However Lex notes that the EU is considering the BMG / Sony musci link up and would probably look unfavourably upon another merger on competition grounds. For Lex the value of EMI is in its publishing activities "relatively sheltered from the violent swings in recorded music." This provides an opportunity for a private equity company to move in and say that EMI is oversold. 

Whislt Lex is clearly putting out tempters it would indeed be a brave organisation who thinks that EMI is oversold at current share levels. What it does raise is the possibility of online music publishing as another add on activity for the new social networking generation. New bands are perfectly capable of publishing this material for themselves via the net although why the Arctic Monkeys didn't do this is a mystery.  Perhaps some straight cash did the trick?

Gene Kelly Singing in the Rain

Singing in The Rain : Part of EMI's Long Tail

Whilst the long-tail may tempt in private equity firms how they would release extra value from this is unclear. Would they also be open to needing to end contracts with leading celebrities from a now vanishing era, because a private equity company would hardly want to be running a business of this nature by themselves. The nature of private equity is to asset strip and or release value which doesn't appear in the sum of the parts. Whilst there is little room for error in terms of supermarket property valuations publishing rights to old pop culture songs is a rather more challenging thing to estimate. EMI is certainly upbeat as the statement from their website repeated below suggests:

EMI Music Publishing is the world's most creative music publisher with more than one million copyrights including some of the best known songs ever written: New York, New York, Over The Rainbow and Singin' In The Rain. Its current hit-making writers and producers include: Arctic Monkeys, Beyoncé Knowles, Natasha Bedingfield, James Blunt, Kelly Clarkson, Daddy Yankee, Jermaine Dupri, Eminem, Enya, Gorillaz, Jay-Z, Alicia Keys, Daniel Powter, Eros Ramazzotti, Scissor Sisters, Kanye West and Pharrell Williams.

Lex obviously picked up on the Brit Awards announcement which was more or less simultaneous with the dire profits warning:

London, February 14, 2007: EMI Music Publishing was celebrating tonight, as the publisher's bands and solo songwriters were victorious in a record six out of twelve categories at the Brit awards show in London. This is an unprecedented number of wins for the music publisher.

The Arctic Monkeys, Amy Winehouse, Take That members Jason Orange and Howard Donald and the Fratellis were all signed out of the publisher's London office, with International artist Nelly Furtado signed from New York.

Brit Awards and EMI Cartoon

For the immediate future 

Anyway what is going down seems likely to be going down for a while yet. EMI shares have a way to drop to ensure good value to a private equity company. Glum whistles will be heard in the comapnie's corridors for a while as they try and figure out a viable strategy and the vultures of private equity houses circle with their calculators as the once giant of music continues to stumble forwards rather aimlessly.  


February 16, 2007

Steve Jobs and Digital Rights Management Systems

Follow-up to Digital Music Downloading and the Long Tail from Kinoeye

The Digital Rights Management of Music Debate Continues

Thoughts on Music

Steve Jobs
February 6, 2007

Steve Jobs' Internet article has raised some controversy however it is worth reading to get an industry insider's overview of the situation. An important part of his argument is that CD sales in conventional shops are not sold with digital Rights Management Systems (DRMs) installed - unlike DVDs for example. As a result a CD can easily be bought and uploaded to a downloading site and quickly spread around the world. What stops the industry doing anything is that there are tens of millions of CD players unable to read CDs which are DRM enabled:

In 2006, under 2 billion DRM-protected songs were sold worldwide by online stores, while over 20 billion songs were sold completely DRM-free  and unprotected on CDs by the music companies themselves. The music companies sell the vast majority of their music DRM-free, and show no signs of changing this behavior, since the overwhelming majority of their revenues depend on selling CDs which must play in CD players that support no DRM system. (Jobs 06/02/07 my emphasis).

Jobs continues by asking:

So if the music companies are selling over 90 percent of their music DRM-free, what benefits do they get from selling the remaining small percentage of their music encumbered with a DRM system? There appear to be none.

Jobs' iPod still dominates the paid for download market but Apple and the music companies need to make more from this market to ensure that they keep ahead of their rivals.

iPod

A Sceptical Take on Jobs by Bill Thompson

Bill Thompson  evinces the specticism of a good journalist and comments that for all Jobs' heartbeating antics about how terrible it is that the 'Big Four' of the music industry (Sony / BMG, Warner, Universal and EMI) don't release their hold on DRM Apple do very nicely out of the deal thank you:

I don't believe him. If Apple switched off Fairplay then they would probably sell a lot more songs, on which they make very little money, and a lot fewer iPods, on which they make a lot. I don't buy songs from Apple's store because I don't like DRM. (See full Thompson article)

Thompson plausibly argues that Jobs is an excellent self-publicist who knows how to distract the crowds. Lets face it Vista seemed to get less attention than the much vaunted and very expensive iPhone. Thompson points out that the industry model of digital music is likely to change again. Perhaps with the music companies allowing fans far more freedom with the tracks than previously. Certainly they will need to work out something plausible soon because otherwise there will less and less reason for bands to sign up to them with social networking and alternative revenue models developing all the time: 

They are actively exploring alternatives to rigid control of sharing, like flat-rate permissive licensing that would track usage and reimburse artists without limiting what fans can do.

And they are - like EMI - looking to set up their own music stores selling unencumbered tracks direct to fans.

A BBC report produced on 15 / 02 / 07 acouple of days after Thompson's comments notes that:

Almost two-thirds of music industry executives think removing digital locks from downloadable music would make more people buy the tracks, finds a survey.

The Jupiter Research study looked at attitudes to Digital Rights Management (DRM) systems in Europe music firms.

Analyst Mark Mulligan, one of the authors of this report doesn't think that there will be any serious moves away from the DRM model in the near future at least:

"Despite everything that has been happening the record labels are not about to drop DRM," said Mr Mulligan. "Even though all they are doing is making themselves look even less compelling by using it."

Other Business Models?

At times it seems as though the Music industry and the hi-fi industry are ending up shooting themselves in the foot and we can see CD sales from the high street dropping through the floor as EMI gave a shock announcement on the 12th of February:

Blaming weak CD and DVD sales in the US, it said it now expects its profits for the year to 31 March 2007 to be 15% lower than 12 months previously.

This was the second profits warning in recent weeks. Old time invesment experts often say that the first profit warning is usually the prelude to a second one and EMI has not proved to be an exception to this adage. As I indicated in the previous article a week the music industry is being turned upside down. Don't put your pension into EMI whatever you do. If you want to throw money away at least do it for the 'good causes' on the National Lottery. Don't believe me? Just take a look at the share price chart below. This is at a time when the FTSE and the Dow Jones are on highs. Just imagine what it will look like when the markets soften!

EMI share price after second profits warning

February  2007 Share Price EMI

What the music industry needs to do is to consolidate fast in agreement with the manufacturers of music replay hardware. This is important because serious music lovers of classical, jazz etc tend to try and spend money on good hi-fi / AV-systems. The SACD / DVD Audio format war has been ridiculous. Nobody is prepared to accept the Betamax / VHS situation again. Now there is a replay with Blu-Ray & DVD-HD. Older people who would like the quality and the surround sound capabilities if music is being designed for this are unlikely to buy in until more all-purpose players are available.  The youth market who were once likely to buy CD singles and CDs just aren't. 

Can the popularity of artists like Kylie Minogue really save EMI? 

Kylie Minogue

Perhap one answer for the music industry to consider is that music targeted at teenagers only comes out through iTunes. If there are album length contributions in shops these should be in the latest high definition format with DRM. This however risks leaving the market wide open to savvy teenagers who are perfectly capable of marketing themselves over the web. Making an alternative downloads service with very cheap downloads is perfectly feasible entirely bypassing iTunes. 

One thing is for certain, if the US is currently the cause of EMI's profits problem where DVDs and CDs are so much cheaper than in the UK because people are turning to downloading, there is just enough time to get your pension out of Virgin Music and HMV because they are going to run into real big trouble soon. A danger I predicted for Viacom shareholders a couple of weeks ago. Only the most adaptable and clever of these older media organisations are going to survive. Some forced consolidation in several areas seems to be on the cards. This has been forced upon the EMI-Toshiba joint venture (see below) in Japan last December for example.

EMI_Toshiba Deal 2006

Conclusion 

There isn't one! Keep watching thing space there are planty of twists and turns to come but if they don't sort it out soon then that most enterprising of companies Google with very deep pockets may well come up with the new killer model. Just think of all the different kinds of music you could access whilst going round Google Earth for example :-).  


February 11, 2007

The Thirty Nine Steps:Alfred Hitchcock version 1935

Introduction

Donat and Carroll Handcuffed in 39 Steps 1935

The so called 'long tail' which has recently been discussed has of course been around for quite some time in one form or another and Carlton brand has always manged to maintain a good level of stock-market value through its large back catalogue of films. Alfred Hitchcock's 1935 version of the John Buchan spy thriller The 39 Steps is part of its 'long tail'. Having picked it up in the HMV sale recently for £3-00 a couple of weeks ago instead of the 'Normally' £15-99 I got around to watching it last night as there was certainly no opposition from the TV Channels on a Saturday evening. It was exactly one of those films which have been overpriced for a long time. Now DVDs have been around a long time finally Hitchock films are beginning to be sold at something like a fair price for a film which was clearly of its time, being of historical interest but clearly a minor one in Hitchcock's oeuvre.

Plot Spoiler Warning

The commentary below  will reveal the outcomes of the plot and readers are advised to view the film prior to reading on if this is important to them.

The Adaptation

One must never expect anything like the book in an adaptation and this version of The 39 Steps was no exception. I confess as a teenager I enjoyed the books of John Buchan, Huntingtower, Greenmantle and of course The 39 Steps being obvious examples. This version of The 39 Steps is removed in time from the original book which was set during the lead up to the First World War. The key secret around which the plot is based was very different as well and the settings and denoument were entirely different.  The sentiment of the original book was strongly adhered to. It is a tale of  bumbling amateurs saving a core British secret because the authorities are too complacent, with Germany being the enemy in the background. In Hitchcock's version we never get to find out what relevance The 39 Steps have. The 'icy' blonde leading woman is never contextualised. The audience never know how she fits into the overall scheme of things. She was not only a stranger on a train -dare I say - but she is only ever contingent to the plot whilst in the book her recognition of Hannay's honesty, was a core element in getting the authorities alerted to the problem. She could only do this because of her class connections which are severed in this film. Hannay incidently was a South African mining engineer appearing in more than one of Buchan's books not a Canadian lieutenant as portrayed by Hitchcock.

The Context of the Film

donat confronts the Spy in 39 Stepss 1935

What surprised me was how politically savvy this film was at the time. Released in 1936 (the Carlton date whilst the BFI site says 1935) and presumably being planned and shot possibly in the previous year this was primarily a thinly veiled attack on the rise of Nazi Germany and a clear warning to the state and the nation through popular cinema of the extreme danger which was growing. It is also worth remembering that in June 1935 the Anglo-German Naval Agreement had been signed which many considered was a sign of appeasement towards Hitler.

Hitchcock's early film career had started with Ufa the largest film company in the World outside the USA which was based in Weimar and then Nazi Germany. Many of Hitchock's former colleagues in the film industry had fled from Nazi Germany. A few had come to Britain by that time although many initially went to France and from there to the USA.  

1936 saw the Berlin Olympics and the Nazis were for a time on their best behaviour when it came to the treatment of German Jews. Although quite a lot of anti-Jewish laws had already been instituted - to say 'passed' would give a notion that there was some sort of democratic choice-  these were preludes of things to come and at that point it appeared as though these laws were there to encourage Jewish emmigration, which of course was going on.

That the film concentrates on an air ministry secret based upon information about engine design is especially interesting. Churchill had recently already argued vehemently that 'the bomber always gets through' and there was a growing recognition that air defences were crucial in any future war. It was in 1936 that the Air ministry first ordered the Spitfire aircraft that was to prove so successful in the defence of Britain only a few years later.  The film's secret focuses upon the secrets of an engine and it can be no coincidence that the Spitfire was powered by wht became the famous Merlin engine. It was the forerunners of these two which had successfully won the Schneider prizes a few years earlier. It was an obvious reference to British supremacy in this area at a time when German rearmament had really begun to accelerate rapidly. We can see from these circumstances that it is legitimate to read the film as an early warning to beware of presumed future enemy. 

Ivor Montagu Associate Producer 39 Steps 1935

It is perhaps no coincidence either that Ivor Montagu was the film's producer. Montagu worked on a number of  Hitchcock thrillers of the 1930s  as an associate producer with Gaumont under Michael Balcon having first worked on Hitchock's 1927 The Lodger in a post production capacity. As a strongly committed member of the communist party Montagu would have certainly seen this film as an opportunity to raise political concerns about Nazism through popular culture. Robert Donat's adress at a political meeting essentially reflected the position of the French Popular Front which was a call for unity in the face of growing European extreme right-wing movements. The address would also be likely to have had the British Union of Fascists who by 1934-1935 were becoming increasingly anti-Semitic.

The Film Itself

I felt the film itself was a little uneven. It opened well with an out of kilter shot of a box and then followed the feet of a man who turned out to be Hannay played by Robert Donat. A typical Hitchockian device of holding back information from the audience. At times the film managed to build the tension very effectively whilst at other times the tacit agreement to suspend disbelief by the audience was stretched to its maximum.

The BFI Screenonline article on the film notes that the Robert Donat character Richard Hannay was being played for laughs and looking like a forerunner of Hitchcock's use of Cary Grant. Certainly this film at itmes reminded me of watching a Fritz Lang film such as 'M' with hints of expressionism but at times it seemed very clear that North by Northwest was at its heart a cold war remake of The 39 Steps.

It was difficult to dispute the back of the DVD cover which noted the 'icy blond' Pamela played by Madelaine Carroll. Certainly the Hitchockian fantasy was there and the bedroom scene where Donat and Carroll were handcuffed together was being heavily milked for some some fairly puerile sexual innuendo which foregrounded issues of the construction of the male gaze.

Hitchcock was clearly having fun parodying the Calvinist Scottish tradition when Hannay was on the run in Scotland. As a Catholic he was making the most of the plot's opportunity as scenes which were reminiscent of Visconti's rather later Ossessione developed in the kitchen. The repressed desire of the Calvinist farmer's wife played by a young Peggy Ashcroft was palpable.  

Parts of the film stretched the audiences forebearance at times. The cut to offices of the Aircraft Ministry's top people talking to the Pamela character who had not been socially contextualised was on the silly side for example.

Audience Response

Mark Duguid's Screenonline article notes that:

The 39 Steps was a huge success on its release, and crowned Hitchcock as the undisputed king of British cinema. Campbell Dixon in The Daily Telegraph thought it "immensely cinematic", while the British Film Institute's usually reserved Monthly Film Bulletin described it as "first class entertainment". Sydney W. Carroll in The Sunday Times pronounced the director "a genius".

It would be churlish to deny that there were lots of excellent elements to the film and the clever way Hitchcock turns the original into a comedy spy-thriller undoubtedly helped to ensure a good reception. It would be interesting to find out whether any commentators of the time noted the distinctly anti-fascist flavour to the film. Balcon to his credit had certainly been concerned with the rise of Nazism and at a time when elements of the British establishment such as Lord Londonderry (see for example Ian Kershaw's book on Londonderry Making Friends With Hitler) were  impressed with Hitler and wanted to make alliances this film has a clear contextual political edge.

Conclusion

Well worth seeing and historically important in Hitchcock's development as well as thinking about the context of the times, but don't be tempted to overpay for it.   


February 09, 2007

Digital Music Downloading and the Long Tail

Downloading is Promoting the Long Tail

The concept of the Long Tail has been discussed elswhere on this blog ( link to the original article in Wired ). 'Click' Presenter Kelly Spencer has noted that:

With music downloads outselling CD singles by four to one in the UK and the music charts revamped to include download sales, the digital revolution is having a big impact on the music industry.

But with music download sites now the UK's favourite place to buy singles, each with massive back catalogues of songs, it was decided that just listing the singles currently on release may not reflect the way people were actually buying songs.

So from 1 January 2007, every song that is available to download is now allowed to chart. (Kelly Spence article).

The Music industry is being turned upside-down

The onset of the 'long tail' menas that many analysts are now predicting that the new industry model of distribution and sales is likely to moving to small numbers of a large number of titles. This notion fits in well with William Mitchell's arguments about mass customisation which the presence of the
Nike executive on the Davos forum effectively confirmed. (Check out his contribution about on-line customised Nike trainers here).

Koopa the first successful unsigned online band

In January 2007 in the second week after downloads were officially recorded in the make up of the charts, Koopa became the first successful band who did not even wait to be signed up by a record company or have a record in the shops to make the charts:

We built our own website. Then we started advertising that on Google, places like that. From there it was just getting on MySpace and our website, and making sure you're keeping people up to date with regular newsletters, messages and blogs on MySpace.

Dinosaurs or adaptors: Where will the music industry go?

It remains to be seen exactly how the music industry will react. Many of the suits are saying that a band will always need the power of a big company to do the marketing. Possibly this will be true to create a number of supergroups doing spectacular world tours. On the other hand maybe the market will fragment further with young people increasingly sceptacle about paying ludicrous prices to go and see an overhyped  band when there is plenty of variety. With a bit of luck the download era may help spawn a much larger number of live acts and remove the overpaid parasites at the top of the pile. The sooner aspects of 'celebrity' (i.e. industry sponsored hype) are excluded by customers the better for music, musicians and audiences. Watch this space for more news on this.


February 06, 2007

A YouTube Video on Text in the Digital Era

A nice link to an interesting cinematic rumination on the power of text in the digital era.

(Thanks to a course colleague for the link)

Text in digital era Video

http://www.youtube.com/watch?v=6gmP4nk0EOE


February 04, 2007

Web Designing for Disability Accessibility

Introduction to Designing Web Sites for Accessibility with Dreamweaver

When approaching the design for a website one of the most common errors is considering the issue of accessibility right at the end of the process. Making revisions can be very time consuming and if you are in a commercial setting it can be a very costly process.

In reality designing for disability access should only be an extension of good design parameters in any case. Filling a site with stunning graphics tends to ignore the fundamental issues of usability and ease of navigation. Remember you are creating a communication tool not an artwork in itself. Matt hogwood of Sapient UK a web design company summarises the situation very effectively:

Designers need to think back to basics. If you strip out the colour, styling,layout the visual representation of images and Javascript, is your site still usable. If it's not your site is not usable to all groups. (Cited Dreamweaver the Essential Manual p 38).

What is 'good' web design?

The best designers are those who test their work and who are receptive to changing the design based on what they see users doing. Some designers focus on pizzazz only. they will get away with this until customers complain  or stop visiting the site.  (Kara Coyne, Research Director Nielsen Norman Group, cited Dreamweaver the Essential Manual p 40)).

Using the Dreamweaver Accessibility Features

Dreamweaver already has built in a range of features to ensure accessibility. To find out how to switch these on go to the Macromedia site at http://tinyurl.com/67378. alternatively when you open Dreamweaver open the Edit drop down menu. Then select Preferences and then select Accessibility. Tick all the boxes and then tick OK. This will activate the accessibility help system.  

Once you have switched these on you will be given prompts as you design to add elements such as Alt tags to ensure that reading devices for visually impaired people work effectively.

A good example of a site which has taken accessibility very seriously is Tesco's. Julie

Howell the policy officer at the Royal National Institute for the Blind (RNIB) has commented:

Work by Tesco.com to make its home grocery service more accessible to blind customers resulted in revenue in excess of £13 million per annum... (Cited Dreamweaver the Essential Manual p 38).

Useful  Websites and Articles

Guardian 2003 commentary

The RNIB free rescource centre for Web design 

Out-law.com This site is from an international law firm who specialise in ensuring that a site is compliant with UK laws.

A useful site with design tips is  Accessibility 101


February 03, 2007

Web 2.0 to the fore: The Davos Web 2.0 Webcast

Web 2.0 to the fore

Well I didn't know it at the time but my selling of Web 2.0 to parents and prospective media students was bang on target for 2007. It has been obvious for some months that MySpace and YouTube are the public face of significant changes in the way that the internet and ultimately the future models of the media industry for some time will start to work. The fact that there was a special section of the Davos economic forum devoted to Web 2.0 is highly significant. The webcast which can also be downloaded as a Realplayer file has some very interesting comments not least from Bill Gates. 

Second Life Intervention 

Before you click onto the Davos webcast I thought I'd just draw your attention to some serious social protest from the virtual world with a link to the real world as reported by Adam Reuters:

Pictured below: luemmel Lemmon of the WEF protest group DaDavos. (The group has a beautifully designed logo, which is displayed on his placard and can also be seen on the website.) Luemmel is talking to a guy whose name I missed, but who is perfectly dressed to fit in here among the suits.

Davos Protest Seconf Life

The Davos Webcast page on Web 2.0. There are several language version here. This is a copy of the line up:

The rapid rise of online social networks is both a social and business phenomenon, the impact of which is only beginning to be understood. The consumer-powered Web 2.0 creates innovative ways for businesses to operate and people to communicate.

  1. What is driving the emergence of virtual communities? Is the rapid rise in their valuations justified?
  2. How are companies beginning to use social networking strategies for product and market development, as well as for communication?
  • Caterina Fake, Founder, Flickr, USA
  • William H. Gates III, Chairman, Microsoft Corporation, USA
  • Chad Hurley, Co-Founder and Chief Executive Officer, YouTube, USA
  • Mark G. Parker, President and Chief Executive Officer, Nike, USA
  • Viviane Reding, Commissioner, Information Society and Media, European Commission, Brussels

Challenger

  • Dennis Kneale, Managing Editor, Forbes Magazine, USA


Viacom Versus YouTube

Relatively Old Media versus New Media: Viacom versus YouTube

YouTube

Introduction 

Well one of the most interesting New Media stories to break at the beginning of February is the spat developing between Viacom who control MTV and Google's recently bought YouTube. Its fornt page stuff  for the Weekend Financial Times (non-virtual) and it also appears in their important Lex column and it's an important story for the BBC online business / technology columns. 

Viacom too greedy for its own good? 

Its interesting because it raises the question of whether Viacom in the longer term is shooting itself in the foot.  Viacom has demanded that YouTube remove approximately 100,000 videos which contain some of its copyrighted material from MTV videos and other easy to use clips. this is likely to intensely irritate an exponentially increasing youth community who have already rocked the mainstream music industry to the core. The youth market is primarily who music videos aim at and those are the same people who are increasingly turning to user generated content, perhaps in a post-modern style of hybridised mish-mash of images which partially use 'found objects' such as bits of music video. 

The fact of the matter is that the dramtically falling prices of technology and the rapidly growing base of people who can use these technologies represents the youth 'barbarians' battering at the gates of civilisation as Viacom shareholders know it.

The attitude which Viacom are taking is merely likely to help create a sort of repetition of Punk where the behmoths and dinosaurs of mid-seventies rock spending onanistic months producing some 'concept' album or another. The young don't mind it raw and 'in yer face' the key thing about the content is that it needs to be up to date and dynamic. The era of 'high added value' otherwise known as ripping off the consumer is rqapidly coming to an end in the pop/rock video era.  

Warners see the light 

Well if I was a pension fund manager or similar I would be reconsidering any long-term holdings in Viacom. Previously they were gatekeepers just as EMI was, now look at the latter.  Whilst the Lex column a little pompously notes that:

Among the ragbag of user-generated content uploaded to YouTube, many of the more popular video clips are from mainstream content providers. Those media groups understandably want to be paid. (Lex 03 / 02 / 07)

Lex then notes  that Warner Music, for example quickly came to a deal by arranging revenue sharing with YouTube for advertising that appeared alongside its content. Lex notes that Viacom's MTV and comedy Central both have content which is easily cut and pasteable by choosing highlights. Viacom didn't get offered the deal it wanted and has 'turned up the heat'. 

Lex notes that Viacom probably doesn't want a head to head with Google which is now exceedingly wealthy and any lawsuit is inherently unstable. Lex might have added that Google appear to be more in tune with the spirit of youth which is pervading the social networking sites. The reality is that market fragmentation means that there will be more people producing content and getting paid less. For the forseeable future it probably means that trends will come and go more quickly.

The BBC story on this quotes Google as saying:

But it added that it was "unfortunate" that Viacom would no longer be able to "benefit from YouTube's passionate audience which had helped promote many of Viacom's shows".

This is rather in accord with my point and could be interpreted as a velvet glove covering the digital fist.Viacom would be better off taking a sensible deal rather than risk having its acts being sidelined. 

Conclusion

These are the sort of fascinating case studies which my AS media students have to look at. (For anybody who doubts for a moment the importance of web 2.0 and social networking look at this years Davos lineup). Usually there is a question along the lines of 'Do media companies always welcome New Technologies'. Well the answer is that buying up the owners of the technology if it looks as if there is a potential market  is a good idea otherwise you risk being sidelined. Google has entered the fray of the media world making the transition from being primarily a very effective search engine into a global player. Viacom appears to be doing a Waltz whilst Google is break-dancing. In the long term they may be heading for a fall. If I had the money I'd be buying Google shares not Viacom ones!

Postscript: for more on the Google buy up of YouTube

Postscript 2:  Interview with Chad Hurley who was a founder of YouTube at the Davos World Economic Forum. Viacom shareholders please take special note :-). Here is another interview with Chad Hurley in relation to  copyrighting concerns.


February 02, 2007

A Level Media. New Media: Will the Web Replace Newspapers?

Will the Web Replace Newspapers?

Introduction: The Changing Mediascape 

The seemingly exponential increase in the influence of the internet especially since the onset of Web 2.0 with its emphasis on collaborative approaches, social networking and filesharing has dramatically changed the global mediascape. The emphasis of new media is currently towards 'User Generated Content' even for news where many Americans are using 'Digg'. The music industry is in immense turmoil as the market has opened up dramatically and the industry gatekeepers have, for the moment at least, been circumvented. Commercial TV is under serious threat in the UK as advertising budgets continue to migrate to the web. The recent Ofcom report in the UK on radio (2006) specifically notes that there is a shift away to the internet and to iPods. It must be remembered as well that the target audience for an advertiser instantly becomes global once it is on a website instead of merely national. What then is the future of the newspaper in this rapidly changing global media  environment? Below David Bowen a web effectiveness consultant has contributed an interesting article to the Financial Times on this issue.

"The relationship is not symbiotic, it is parasitic. And the parasite could be killing the host".

David Bowen Financial Times January 18 2007 (a website effectiveness consultant for Bowen Craggs & Co) puts forward the case that both newspapers and the web need to be concerned. A parasite which ultimately kills its host is a 'Necrotroph' and Bowen seems to think that this summarises the relationship between the web and newspapers. 

The web is a secondary medium. Mr Obama’s site may be a pleasing way of getting his message across – but only if people find it via a primary medium.

What do I mean by primary medium? Simply, one that people will turn to themselves, or be exposed to without effort – a high visibility medium, you might call it. Newspaper articles or advertisements, television reports or commercials, radio ditto, hoardings by the side of the road. Indeed the billboard on a busy road probably wins the visibility prize: it is difficult not to see.

The vast majority of websites are low visibility, and I include those with massive traffic such as YouTube and MySpace, as well as every blog. Mr Obama’s video is on YouTube, the video sharing network, but it is not high visibility. You will find it only by seeking it out, or by being told about it by a friend. You will not trip over it as you might while watching television, reading a paper or driving along.

The big problem for newspapers is that advertising is shifting to the web, but what will happen to the web if newspapers start closing down? It will lose important signposts, and will itself become less valuable. The relationship is not symbiotic, it is parasitic. And the parasite could be killing the host.

David Bowen's point comes down to a key issue that it is hard for people to find things on the web and as such they need signposting. Bowen draws on the example of the Directgov site which had an advertising campaign in 2006:

A four week advertising campaign is not going to change the way people behave. It’s a start, but I think we need to be told over and over and over again that there is this very useful thing called the web, and we will be very pleased with what it can offer us. (My emphasis).

Bowen's point is a fair one and in the short term he may be right, but changing habits of quite literally a lifetime for older people is one which is a cultural thing. What about today's 16 year old? The first place they go to is the web for anything they do. They might well read Metro on the train but they certainly don't buy newspapers. As Web 2.0 proliferates more and more services will develop and the ill used 'Directgov' of today will be hosting forums about the effectiveness of the recycling services offered by various councils before long.

There seems little doubt that as mobile broadband wireless services and the gadgets to access this develop and become more effective it will become increasingly easy to access specialist sites. Currently there are generational issues and technological issues which are reducing 'affordance' but both of these are changing quite fast. There are now far more 70 year olds in PC World than there used to be.

I have found many A level students are using forums to try and get peer advice on their media and film studies research projects and we can certainly expect forums, Wikis, blogs etc to increasingly provide peer experience of everything from cars to councils. If you have an area of special concern accruing RSS feeds and Podcast feeds will be something which everybody does. I would be expecting local councils websites to be delivering podcasts / vodcasts / RSS updates about changes in goods and services. These will take the place of the signposts which David Bowen talks of.

Are their still digital divides?

Naturally all this will take time to develop but the internet as we now know it is only about 15 years old. Broadband has only recently become commonly available at a reasonable price. To me the issue is still one about digital divides. Communications experts such as Murdoch and Golding have for a long time been commenting on the communications gap between classes and the relative cost of information to incomes. Currently having or not having broadband access in the domestic environment is now the fundamental issue here. As William Mitchell has noted it is the number of bits which you can access and the speed which you can access them which will increasingly become the marker of inequalities in the information age.

Changing Media Models 

Currently I don't see an end to newspapers and I'm not really convinced by developments like Digg in which people vote on the top stories. Newspapers have already shifted into becoming multimedia organisations which seems to be the expected outcomes of the processes of convergence. This is great. Now I've become a train commuter for a few weeks this gives me a chance to go through the newspapers. If I see something I'm interested in then rather than cutting it out I can 'signpost' it to students and assume it will be available on the web.

This fits in with Bowen's model, but prior to this I just used to buy a couple of papers a week. Usually both on a Saturday. The Financial Times and the Independent. I gave up on the Guardian because I hated Julie Birchall and you needed a fork-lift truck to take it away, whereupon most of it went straight in the bin. Talking with colleagues most people would rather buy the separate bits from these weekend behemoths.That would need a change in advertising models and perhaps distribution models. 

Looking at the habits of many commuters the lap-tops are out with people polishing thier Powerpoints and spreadsheets in the morning, not accessing the news media whilst others flick through 'Metro'. There is now increasing resistance to the 'free newspaper' phenomenon on ecological grounds and I can't believe that many people take any notice of the adverts at that time of day. The return journey is different. Perhaps that is the time for accessing the media. The local evening paper in a station is unlikely to be of much interest to a commuter living 50 or 100 miles away. Perhaps Virgin will soon be putting screens into the back of the seats then you can just log onto your favourite sites which you may subscribe to.

The fact is that there are now a multiplicity of ways in which to enjoy the media and increasingly fragmented markets. Those companies based upon newspapers will change their business model or die. This appears to be the issue with the American Tribune Group. It is suddenly very hard to value a Newspaper organisation at a time of radical transition in media distribution models. If there is an unconvincing web strategy perhaps that is the underlying explanation for a lack of bidders. (I can't tell you the rest of the story as I haven't subscibed to the FT site!):

So far, on the eve of the extended deadline set last year, no bidder has stepped forward to signal they are keen buyers of Tribune, the second-biggest US newspaper group, which owns titles including the Los Angeles Times and Chicago Tribune. (My emphasis).

Given that there is a comforting physicality about a newspaper which has a throwaway aspect to it I suspect that we will increasingly get thinner newspapers physically and richer websites in terms of content. It may be that the the real newspaper acts as a signpost in the way in which Bowen suggests is needed but the web model of what is accessible and to whom is what is still being worked upon.

The Financial Times approach is making the most of 'the Long Tail' where full articles and archived articles are available to subscribers which seems a very sensible way to go. The proliferation of adverts next to the web pages of newspapers will continue to get more sophisticated and more targeted.

Perhaps some newspapers will experiment with 'lite' versions which are specifically designed as websignposts. Full versions at weekends. Given that the audiences are increasingly global this should mean that newspapers will probably be with us for a long time but it does seem likely that there will be fewer of them and that they are likely to function differently with the main content and income generation streams increasingly focused upon the web.

If you are a football fan in the Phillipines then getting the current stories about Man United by a commnetator you like, which would previously been impossible is now pretty easy. The fact that English is the lingua franca of the web of course favours English speaking commentators and clubs however we could easily see 'papers' employing more translators. There are lots of possibilities but I don't see the pessimistic necrotroph option which Bowen is worried about as one of the likely outcomes of advertising migrating to the web.

I for one wouldn't lament the passing of 'The Sun' but Murdoch has perceptively already brought up 'My Space' with commentators rapidly being forced to swallow their initial criticisms that he had overpaid. News International has clearly got its revenue streams worked out. 


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