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The Digital Decade Ahead

Posted by admin | January 29, 2010 3:01 pm | No Comments

Many pundits are calling the first decade of the 21st century, “The Digital Decade”. What they mean is that in the early 2000s digital media and digital devices penetrated popular culture. Consumers came to understand and use broadband, digital downloads, online shopping, social networking, MP3 players, digital cameras, smartphones and so on. Fair enough, but the last decade was prologue to a greater transformation that will be realized in the coming decade. Here are some of the trends that will drive that transformation.

A computer in Every Pocket. Blazing fast broadband through advanced wireless networks, Wimax and wired ISPs will become the norm. The hardware for displays, processing power, storage capacity and extended battery life that can support the most complex apps, will continue to advance and substantially improve the consumer experience. In an old episode of Star Trek, the starship crew discovered a big glowing device that housed all the knowledge in the world. Soon everyone will have a computer in their pocket with instant access to (almost) all information.

Multifunctional Platforms Rule. Today a typical household has a plethora of devices from telephones and message machines to CD players and stereos. Much of this hardware is the legacy of a transitional period in communications and home entertainment. The notion of a wired telephone that is just for talking seems like a quaint throwback to simpler times. Increasingly electronics will blend together into multifunctional devices with certain common characteristics. They will essentially all be IP connected computers with speakers/headphones and displays for audio-visual output, and some combination of cameras, microphones, touchscreens or keyboards for input. The form factor, specific features, and combination of devices utilized will depend on the particular interests of the user.

All Media Becomes Digital. Music has already shifted but the same will hold true for television shows, movies, books, magazines, newspapers and games. As they make this transition, what it means to be a television show, magazine, book or game will change. A sports fan could select and stream any camera view of a live event, an ad in a fashion magazine could be interactive, and a static illustration in a book could come to life like a story about Hogwarts in the Daily Prophet. Playing “Call of Duty” is a much different experience when you are competing against an army of online users. That is not to say that you won’t be able to buy a physical book or CD but these will increasingly become minority mediums as new consumption patterns proliferate.

Just Click Play.  Media used to be in the form of objects you own and increasingly it has shifted to a digital stream of information you consume. It was natural for entertainment producers and retailers to try to apply an old paradigm to a new medium and as a result we were offered digital downloads to buy and own. But access will ultimately trump ownership as cloud computing becomes mainstream.  A new generation of consumers doesn’t need to see that they have a file saved on a laptop. As long as they can just click play, their needs are served.

People Will Pay for Relevant Access. In the analog world, the packaging of premium media was carefully controlled. Music was sold in albums. Television shows were programmed on channels and channels were bundled by cable operators. In the digital world, people will not pay for something they don’t want.  Media will become untethered, as evidenced by how quickly digital album sales reverted to singles sales. Expect to see similar disaggregation of television shows, for example, from channels and bundles to the individual shows a viewer cares about.  Consumers currently make significant annual expenditures for information and home entertainment. This investment will continue, but will be redirected to pay for convenient and “relevant” access to the media they want.

Bottom Up Will Replace Top Down. Imagine drawing a pyramid to represent digital media distribution. You would almost certainly put iTunes at the top and designate consumers to make up the base. This is basically the same model one would have applied to distribution of household items a hundred years ago. Sears Roebuck would have been at the top of the pyramid with consumers making up the base. iTunes, like Sears Roebuck a century ago, offers the classic centralized retail model – one to many. In an inherently decentralized online environment, it is only natural that this pyramid will eventually flip on its head. At the top will be a myriad of specialized media applications that offer innovative ways to discover and consume media and at the bottom, an individual consumer looking up at the many choices that fit their lifestyle and preferences.

Alan McGlade is CEO of MediaNet which is in the business of inverting the media consumption pyramid.

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