Digital Media Web 2.0

Fascinating - 3 Old Media Newspapers are the medium of choice for Afghanistan war wikileaks:

The huge cache of classified papers - described as one of the biggest leaks in US military history - was given to the New York Times, the Guardian and the German news magazine, Der Spiegel.

What is most interesting is why Wikileaks - a Web 2.0 User Generated Content site if there ever was one - chose Mainstream media as its organ of publication and dissemination rather than just getting it out there on the Web. If there is one thing this proves, it is that the role of the Olde Media is far from redundant. The deep throating may now be very 2.0, but the reporting is an interesting combination of Old Hacks drinking from New bottles.

(Update - there is a rather good debate going on in The Atlantic on what this all implies for Journalism)

As to the actual incidents themselves, there will no doubt be a lot of hand wringing from the self-declared sensitive types, but the more prosaic truth about these facts is that this sort of thing was ever thus (Allied exploits in WW2 do not make them out as angels at all, and just ask the average British tankie about US "friendly fire" in the Gulf Wars), its just its all come out in the open this time (A process that started in the Crimea, by the way).

And, no doubt Western generals everywhere will be worrying that they have to fight with one hand tied behind their backs while the enemy have no such limitations. But the more prosaic truth about the leaks is that this sort of leaking will become more common, and that governments and corporates everyhere will now redouble efforts to stop it.

That the best way to prevent corruption is to shine a light into the dark areas is very true, but it is also true that some areas ned to stay dark for the safety of those fighting on "our side". What will be interesting is to see how a "new contract" is formed between States and their people over the next 10 years or so - States will know the stuff wll come out, most of its citizens will realise a State sometimes has to do what it needs to. Ditto with Corporate malfeasance (where the "have to do what we have to do" carries less weight, methinks).

If I were to make a guess, its that most citizens already knew that War is a gory business, that Afghanistan was going far less well than the Governments claimed and the media reported it as going (The mediarati are going into overdrive today, but where were the investigative media before this, one wonders....) and that much of this is news, but not New news. It merely adds detail to already provable hypotheses.

Anyways, the Grauniad's page explaining the data is over here, and here is the Excel spreadsheet (They couldn't put it on Google Docs as it can't handle files that size)

PS - I loved this comment on Slashdot - pretty much sums up my view of the whole sorry episode:

According to the CIA World Fact Book: [cia.gov]

Population: 29,121,286
GDP (Per capita:) $800 (2009 est.)

So now, expenditure over six years (Jan 2004 - Dec 2009) is $300,000,000,000.00 divided by six is around $50,000,000,000.00 per year

Per capita is $1,716.96 or more than double the GDP per capita of the country!

I would think that the US would get better resultsif the money was simply given to each inhabitant, the $800 they already make plus $1,700 from the US, would triple the GDP per capita, no small feat.

Just smile for the camera and show that you have not handled explosives or fired guns in the last week (paraffin test) and you get your weekly expenditure; you don't show up for a week then you lose the privilege, i.e. you knew you couldn't pàss the test.

Who said "You Can Rent an Afghan But Never Buy One"? It would rent the whole lot of them for a long time!

Nick Carr, in pimping his new book (which I clearly should not link to ), argues that Links are Bad Things:

Links are wonderful conveniences, as we all know (from clicking on them compulsively day in and day out). But they're also distractions. Sometimes, they're big distractions - we click on a link, then another, then another, and pretty soon we've forgotten what we'd started out to do or to read. Other times, they're tiny distractions, little textual gnats buzzing around your head. Even if you don't click on a link, your eyes notice it, and your frontal cortex has to fire up a bunch of neurons to decide whether to click or not. You may not notice the little extra cognitive load placed on your brain, but it's there and it matters. People who read hypertext comprehend and learn less, studies show, than those who read the same material in printed form. The more links in a piece of writing, the bigger the hit on comprehension.

Nick argues that he doesn't want to over-egg the cognitive load of linking, and then goes on to do just that....

The link is, in a way, a technologically advanced form of a footnote. It's also, distraction-wise, a more violent form of a footnote. Where a footnote gives your brain a gentle nudge, the link gives it a yank. What's good about a link - its propulsive force - is also what's bad about it.

So is this the death of the Web 2.0 stalwart, the Link Economy? No, that was dead already along with all the other FreeConomic cr*p that was in the same memeset and died when capital funding dried up (unless you link to an in-text Ad of course....). As I point out in the graphic above, your view on linking is a function on how badly you think you need them. To me this is just a maturity/familiarity thing - I don't charge all over the web when I read a piece, just as I don't keep on going to the back of a book to read the footnotes. One suggested approach is actually to group all links and stick them at the end of one's post, simulating the notes at the back of a book:

Collecting all the URLs into a single block of text at the end of the article works very well. It illustrates Carr's point, and it improves the experience of reading the article. It also shows more respect for the reader - it assumes that we've actually thought about what we've read. (Which is not to say that all readers merit that level of respect.)

The big question of course, is do I link to Nick's post - of course, but maybe I should do it a the end of my piece as suggested, so here it is. Here too is Stowe Boyd's argument that its just a case of learning to read online media to maximise flow

The Tory and Labour parties colluded in forcing through a piece of draft legislation today - the Digital Economy Bill - which is one of the most barefaced examples of Olde Media trying to protect it's position via legislative muscle.

No-one (rational) was ever suggesting that there should not be a Digital Economy Bill and a debate - everyone was welcoming it - but most people wanted to debate it fully and get all views sorted, as well as iron out its inconsistencies, errors and incomplete areas.

The fact that these two major UK political parties forced it through (despite its incompleteness, erroneous areas, clear public resistance, and strong arguments by those in the parties who know something about this area) implies both are in effect in thrall to these vested interests - and, one therefore wonders, who else's vested interest are they (jointly and severally) in thrall to?

In general this is an apolitical Tech Strategy blog, but one of the things we predicted in our work on Web TV is that the Olde Media would use legislative means to curb the growth of the New, and that the role of a government is to balance these interests to the greater good of the country's best interest.

They failed, miserably. But they failed in full possession of their faculties. And both failed, ie whoever is in government next time will fail to uphold the interests of the future in deference to the past.

We did this in the past, in 1865 Britain passed laws that meant that New Technology (powered vehicles) had to have a man walk in front of them with a Red Flag:

The Locomotive Acts (including the The Locomotives on Highways Act 1861, The Locomotive Act 1865 or Red Flag Act and the Highways and Locomotives (Amendment) Act 1878) were a series of onerous measures introduced by the British parliament to control the use of mechanically propelled vehicles on British public highways during the latter part of the 19th century.

.....

These new Locomotives, some up to 9 feet (2.7 m) wide and 14 tons, could also allegedly damage the highway while they were being propelled at "high speeds" of up to 10 miles per hour (16 km/h).[1] However, there is evidence that the steam carriages' better brakes (which did not lock and drag), their wide tyres, and the absence of horses' hooves striking the road allowed them to cause less damage to the roads than horse-drawn carriages.

It was a scam then to protect the incumbents, its a scam now, and a pox on both houses that passed it.

Update - I wrote this last night, and already this morning one of the major UK ISPs is publically looking at ignoring the bill. Let the Digital Defiance begin!

Update to my update - it appears they are bravely defying it until the next Parliament comes in after the election to enforce it. Heroic resistance, what!

Techmeme has launched a new vertical, the fascinatingly recursive* Mediagazer:

Today we're launching our first new news vertical in almost four years: Mediagazer, which will focus on the content production and distribution business, organizing topics as wide as journalism, blogging, video production, e-books, and digital distribution technologies.

Meedja types given a mirror to look at themselves with...hmm, I recall a Greek Myth on the subject - ended in tears of course . Anyway, the venture will still have the Human Editing function:

Mediagazer incoporates all these lessons. We've taken great care in its construction, have outfitted the site with the latest iteration of our automation engine, and have launched it from the outset with a dedicated human editor.

That editor will be Megan McCarthy. While Megan's career in media has focused more on the technology space (both at Gawker and at Techmeme), she's long developed an interest in media industry buzz and should feel very much at home at Mediagazer.

It was perhaps inevitable that such a thing aimed at The Meedja would happen, its is an interesting gambit, and I wonder if it will need more human editing than Tech. The sheer number of Media news magazines suggests it will work (I've always seen Techmeme etc as the equivalent of magazines rather than newspapers per se), with this most self-absorbed of sectors. What fascinates me is which other verticals will be launched - and survive.

*look it up

Worrying message for the Future of Web Porn - Apple is pulling the Adult apps out (theough a rumour surfaced that they may let some back in) back in, while Walmart is pulling them out of Vudu:

An email is currently being sent out by Vudu letting its After Dark (the adult portion of its service run with adult publication AVN) partners that the section will be discontinued in the “coming days.” Find the full email at the bottom of this post.

Vudu has the distinction of being the only major streaming service with an adult section which includes hundreds of titles (including many in HD) from the leading porn studios.

What with all the free sites like YouPorn, its hard to see where a moneymaking model for Web Mass - Videoporn is.

In theory - in theory - if there is no money in the market then eventually new content will disappear and the market collapse. Will this happen for Porn - probably not, because this seems to be the one area of user generated content where the cult of the amateur still has a large part (as it were).

Gave a talk last night at the Online News Association session "Who cares about the page views, show me the money!", along with William Higham, writer and trend forecaster, Next Big Thing (@williamhigham) and Katie King, Creative and Development Editor, MSN UK (@ktking).

This post details shows the slides (above) and the commentary (below).

The Communication Value Chains of Yesteryear

Castles on the Rhine and Fleet Street office blocks are frequented by tourists today, but in days gone by were the headquarters of powerful barons of communications businesses, made powerful by their control of a par of the distribution system. They remain as witness that in communications and media value chains, things do change.

The Value Chains of Yesterday

TV, Print Media, Radio, Music and Film empires all existed as aggregators because they had control of their supply chains - either licence granted, or owned a very expensive to reproduce distribution network. That these would end was predicted at least in the mid 90's - in excruciating detail, to my personal knowledge - so the only real surprise is that these behemoths have sat on their a*ses for so long.

The Value Chains of Today

Cometh the 'Net, cometh the disintermediation of the distribution networks, and new aggregators interposed themselves on the new distribution channels. The first generation of these were the "Portals" - Yahoo etc - but the winning game at present is Google, a search function serving low rent classified Ads (but maximising their value via auction) at very low cost.

Bear in mind that Yahoo et al ruled the roost for about 7 years, Google is in its year 6, so its quite likely that by 2015 it will be something other than Google in this space - we are already seeing attacks on their aggregation model by competing search engines and new aggregators suc as social networks.

Media Value Chains - Future Scenarios

In our work for the Telco 2.0 Initiative, we identified 3 sets of players going forward:

- Old Media - they will suffer a collapse in their existing revenues, mainly because....

- ...Pirate World is giving away things for free today, by playing fast and loose with other people's IP and being funded by VC's and Other People's capital, and...

- ...some New Media Players (eg Google, Apple) are making money at one point in the value chain and using it to subsidise and disrupt others (eg Google funding YouTube)

The issue the New Media Playesr face is that in the early days they don't make a lot of money, event though they disrupt the Old Media (especially if they indulge in pirate tactics). The risk they face is that after the "Freeconomic giveaway" stage, if there is not a viable cashflow positive business there then they die when VC etc funding stops (or in the case of something like a YouTube, if they grow too large to subsidise).

Media Value Chains - Predicted Actions

The Old Order will use its muscle to maintain control of its stream of value:

- Re-establish content rights
- Maintain control on sources of funding (Ads, Subscription)

The Pirate World will attempt to push its advantages to teh Max

- Argue for No control of rights, Free wins
- Obtain as much Offset-based funding as possible

The New Order will try and reset the game in its favour by lobbtying hard for things like:

- New copyright model allows pricing control by new aggregators / creators
- Migrating control on sources of funding (Ads, Subscription)

FreeConomics must #Fail

"Free" is a great way to grab market share and disrupt incumbents, but its a lousy way to keep a sustainable business going. Those that rely on FreeConomics but are then unable to wean themselves off it must fail when they get too large to support, as noted above

The Apple Play....

Apple, with the iPod and now iPhone, uses control of the customer distribution device to control the upstream players and dictate its terms. Planet Mobile did this but was cr*p at giving its customers what they wanted, allowing Apple to enter. Planet Internet cannot do this as the CPE devices are relatively open by comparison. Not only that, but people are used to paying for Planet Mobile content but not for Planet Internet content.

....and the Bandwagon

Of course, every media and technology company on the planet saw this and now we have devices in profusion, from Kindles to iPads, all praying that they can be the next iPhone and persuade the punter that they are really mobiles and that said punter should pay again for the content and services.

The problem with this is it dilutes value to the customer - if I have to have a Netbook, Kindle, iPhone, iPod, Whatever to get bits of content then that is a lousy value proposition. That is the flaw in teh Planet Mobile argument for example - because there are so many incompatible platforms, content production is costly, ergo there is little delightful content.

Winners will thus be the ones who can aggregate and integrate across a number of these channels (did someone say Apple?)

Endgame, This Game

The Print Media is now attempting to re-establishing control by erecting gateways to its content. Some will success, some will not, depending on the content and what value can be added

So what about Print Media?

This is the standard 2x2 of our view on media future - essentially value is created in media in 2 ways - either content is inherently valuable (read: unique) or the organisation can add value to the data in some other way (archives, speed, metadata etc). So, the 2x2 says that:

- Generic, No value add - the data the only real choice is to grab a large audience (typically by aggregating a smorgasbord of stuff, as Newspapers and Portals do) and try and make money by a combination of Ads, Datamining and attracting offset funding.

- Generic, but value can be added - in this scenario some benefit can be gleaned from the added value and its probably here that Freemium models will work (ie a small % pay a prtemium for teh added value content). Typical of this is a social network giving higer levels of access or permissions to paying users (FriendFinder and other dating sites do this), or a newspaper giving access to archives.

- Unique, but No Value Ad - I would class teh WSJ and Financial Times basic reporting here - it is unique, its worth something, so some sort of paywall for some of the content will exist but it can't be too high as the stuff is not that valuable. One could argue its the same as a Freemium model but I think in this case the proportion of free-payers is much smaller (eg FT only gives 10 articles a month for free)

- Unique, with Value Add - this is the world of subscription economics. The Lancet is in here, as is Bloomberg etc - but these are few and far between.

The real skill going forward will be to create valuable services from less rareified data. Thanks also to Skillset for hostiing it.

eBooks should cost the same as paper books, says MacMillan CEO John Sargent - SAI:

John Sargent, CEO of publisher Macmillan, has taken out a full-page ad to explain why he is insisting that Amazon raise prices on its ebooks to $15 in some cases.

.....................................

First, to clarify what is happening here, you are already getting your money: You are selling ebooks to Amazon at whatever price you set ($10-$15), and Amazon is turning around and selling them at a loss, sometimes for $9.99. We're not against your charging what you want to for your books. We're against your telling Amazon what it has to charge for them.

Also, we don't want to pay $15 for ebooks, and we don't think we should have to. The marginal cost of an incremental ebook is pretty much zero. So why on earth should we pay $15 for it?

Its not quite so one sided as portrayed here - Amazon threatened at one stage to remove all MacMillan books, electronic and paper, from its listings. Amazon will now acquiesce, however - as the NYT notes. One wonders what it will do to the volumes sold?

Sigh - The Blodgett's views on economics always have to be handled with care (as many found out in dotcom days to their cost), but one does expect better of a physical media CEO who has observed this argument fail in music, journalism and now video. A little lesson in production microeconomics then. Consider the diagram above - a simplifies media value chain. There are 4 main cost buckets in producing a book:

(1) Content Creation - thats what it costs the creator (the author etc) to create he work
(2) Aggregation - the costs of agents, editors, advertising. legal fees etc etc
(3) Production - the cost of making the product, whether its digital or physical. However, physical production costs are significantly higher than
(4) Distribution - the costs of moving the product from producer to consumer - again, digits over the internet cost a fraction of the trucks, sheds and shops needed for books

Now, on to the cost of production.

(1) Cost of creation is the same, irrespective of the media
(2) Cost of aggregation is similar

So, assuming the market volume is the same. The costs are roughly the same, so the cost per unit will be similar. These are the costs in blue, above.

(3) Cost of Production - orders of magnitude lower
(4) Cost of Distribution - ditto

These are the red sections, and represent the difference in cost of production between a book and e-Book. I've drawn the 4 elements as roughly equal in size - in fact the cost of creation is fairly small, aggregation fairly large - but production and distribution are very material - at least 30% in nearly every case. That is a non trivial saving.

Now just to deal with Mr Blodgett quickly - the "marginal cost" is indeed near-zero once the full costs of the creation and aggregation have been met - but only when they have been met. That is true of both paper and e-books. Until then, they cost!

There is actually another cost, that of the consumer equipment required to read the media, but that comes after the cost to produce it and is not directly germane to the price. However, it is germane to the total cost of ownership. And shelling out several hundred dollars for an e-Reader is another factor arguing against equal pricing of book and e-book.

(Update - just reading some of the other articles, I think they are missing the fundamental point this shows - in other words there is a disruptive economic arbitrage between books and ebooks that will restructure the industry, whether it is wanted, fair, right etc etc is moot)

One thing does concern me though, and that is the potential lock in and DRM lock out that all these various proprietary eBook readers get.

You know you always suspected this, but now you know (from Psychology Today0:

Last week, the Sunday Times published an article with the headline “Blonde women born to be warrior princesses.” The article reported that “Researchers claim that blondes are more likely to display a “warlike” streak because they attract more attention than other women and are used to getting their own way – the so-called “princess effect.”” The Times article quotes the evolutionary psychologist at the University of California – Santa Barbara, Aaron Sell, and his findings are purportedly published in his article in the Proceedings of the National Academy of Sciences, written with the two Deans of Modern Evolutionary Psychology, Leda Cosmides and John Tooby.

Except that....

As it turns out, however, none of this is true, as Sell explains in his angry letter to the Times. He and his coauthors do not mention blondes at all in their paper and they don’t even have hair color in their data. The supplementary analyses that Sell performed after the publication of the paper, as a personal favor to the Times reporter, show the exact opposite of what the Times article claims. After he presumably listened to Sell explain all of this on the phone, the Times reporter nonetheless made up the whole thing, and attributed it to Sell.

I remember reading this and thinking it was total bollocks, and that was from my reading of evolutionary biology and psychology, which is "intelligent layman" at best.

But this is part of the Meedja's problem - by going for the quick hit of lightweight fame (the lure of the link economy is similar in the online world) I think they give away long term trust, and thus value. Little by little it seeps away.

And the problem is, just digitizing this sort of ersatz journalism doesn't help - the Huffington Post and the Onion have the market covered

I read this earlier today

Five journalists plan to lock themselves away in a French farmhouse with access only to Facebook and Twitter to test the quality of news from the social networking and micro-blogging sites.

......

...how would the world look if viewed only through the prism of these sites, whose phenomenal growth has been fuelled by smartphones and, for Twitter, online bursts of 140 characters?

Are these social media -- which between them have nearly 400 million users -- really the serious threat to established media they are often said to be?

Those are the questions the five reporters hope to answer when they retire for five days from February 1 to a farmhouse in France's southern Perigord region.

Journalists playing Big Brother style entertainment to test Social Media?. This is MSM meta-entertainment methinks. The daft thing is that they will only use Twitter and Facebook, thus they won't be allowed to follow the links that people put up on Twitter or Facebook through to the Web pages they are pointing to (no other media exposure allowed), which shows that they totally miss the point - certainly of Twitter style news.

Matthew Ingram thinks it won't help for another reason, in that its an experiment designed more to "prove" that they are no substitute for old media (thank heavens) - which is true as:

The reality is that no single source is ever enough, whether it’s Twitter or a phone call from a source at City Hall. Social media hasn’t changed that. And the most important aspect of new media is that it is (to use an overused word) an ecosystem. News can begin on Twitter, make its way through Facebook and other networks to blogs and then meet up and merge with reports from the traditional media.

For this to be work they need to be able to see the story where the links go (or maybe their real role is to prove that Twitter won't work if Paywalls go up )

The other thought I had - untested - is that if you had good enough filtering systems Twitter just may give you all the news. Now that would be a scary thing for journalists trying to confirm Big Brother style media in a Big Brother House

On Friday we looked at the 8 big trends in the networked technology space over the last 10 years (1999 - 2009). Today, as promised, we look at the trends over the next 10. In some ways its easier to think about 10 years rather than 2-3 years out as (i) you can see the big trends more easily and (ii) no one will remember this in 2019 unless we're very right .

A little digression, if I may. Bill Gates once said that things change more slowly in 2 years than people (and their business cases) want, but far faster in 10. My observation is that this is very true in consumer technology, less true in business technology, less again in the public sector, and public behaviour and structures change but slowly. We also have a model that says technology merely provides opportunity, its the economics, user behaviour and legal restrictions that drive uptake,

For example, VOIP was technically feasible in 2000, but it was only in 2003/4 that enough people had good enough bandwidth, and PCs were cheap enough, for it to "piggy back" on top of pre-paid for assets (your broadband connection, PC with microphone and speakers etc).

Anyway, enough of that - what what happens to the 8 trends we saw in the previous decade rolling forward? They were:


1. Bandwidth will carry on expanding

Given we have had a c 30x increase in the last 10 years, projecting that forward implies a mean of c 60 Mbps by 2019 in the UK. From about 20 Mbps per home upwards, you are talking multiple streams of HD video into a household so that allows the exciting prospect of everyone indoors watching their own HDTV channel, instead of TV channel as they do today. Plus ca change.

More to the point is that expanding bandwidth will drive richer applications, which we comment on below in points 2-4.

Critical to this will be whether the "frontbones" - the networks to the home - can take it. In countries where Government diktat has ruled rollout, this will happen. In those using "the market" it will (probably) happen - but later. The Digital Britain hoo-ha pretty much showed that the market will want to sell to the (urbanised, wealthy) 1/3rd of the population off its own bat, may then expand to the next 1/3rd but won't want to touch the last (poorer, rural, older) 1/3rd. Towards the mid 20-teens ("Twenteens"?) even the most market oriented of Governments will realise that to be competitive they need universal high bandwidth access and will force the issue.


2. Talking to each other will remain the Killer App

We don't know with certainty what New New Platforms will come after Twitter or Facebook, or what the successor of Web 2.0 - sorry, Web-squared - will be (though we have some ideas - see below). But what we do know is that it will revolve around P2P - person to person - communication. Always has, always will.

So, we will predict that whatever new platforms, technologies, etc etc emerge - and despite the resurrection of the standard old advertising and e-commerce use cases (see "you can find a great restaurant with your friends" below) - the killer application will remain enabling small world social networks of people to communicate.

This of course does not mean it will make the most money directly, as we saw in the 'Noughties that game went to being able to place low cost Ads against weak buying intention signals. But comms will still be the killer app driving people onto end to end platforms.


3. Our "Social Networks" evolve onto whatever the best platform of the moment is

An inevitable corollary of 2 above - given talking to each other is the killer application - the next need is to enable a "clearing system" to find people you want to talk to. The rate of change of Social Networks in the last 10 years - from email groupware to near real time video chatrooms - has been fairly predictable big picture (same function, different bandwidth), but - as always - it's hard to define at a detailed UI level just which design will succeed. The mayfly like existence of each new social network (2 year half life) means that (i) there is still massive innovation going on and (ii) the ones we have now will pass too.

The next 10 years will see more bandwidth, and more flexible social market-making. Twitter is the current design leader as it is asynchronous, asymmetric and ad-free (for now). Superimposing this on current platform trends we imagine more fixed/mobile convergence, more attempts to link metadata, more attempts to compromise privacy for searchability. Also, there will not be a "Paradigm Shift" - The users will migrate onto the "New" new platforms while maintaining use of the old (we still use email and SMS) - in fact we predict the ability to run "Unified Comms" systems will be increasingly critical.

In addition, as social networks get bigger and marketing zombies invade them, and signal to noise ratio falls, the ability to filter in the stream will be increasingly critical to its uptake - it is our view for example that Twitter clients will increasingly look like email clients (and vice versa - look at the new Mozilla Raindrop ) as the required functionality is proven over time. Another approach to filtering will be to increase the niche-ness of individual networks (this is what happens to the AltNet and GroupWare) - this story today about BeautifulPeople.com firing 5,000 userswho had got too fat over the holidays illustrates this quite well


4. All useful technology and applications commoditise over a 3-5 year cycle.....

Its worth looking at what is commoditising now to get a view of the main trends in the first half of the 20-teens. Low resolution video, fixed-mobile comms and devices, social media (or at least some aspects of it - group comms and basic profiling), the underlying protocols that Web 2.0 kicked off, text search, and even (near) real time services are busy commoditising. Its also easier to make simple payments now than ever before. The most powerful emerging services of the early decade will be built on combinations of these, as its going with the flow. We will be getting more interconnection of commoditising layers (ie the "walled gardens" will forever be climbing up the added value stack)

This is going to really hurt (ie bankrupt) some industries that have existed because parts of the value chain have not commoditised in the past. Those based on expensive physical delivery of data that can be delivered digitally will be under terrific pressure in the next 5 years, there will be major creative destruction there. Think newspapers now, and TV/Films etc as bandwidth increases. Ditto knowledge industries that have avoided global labour cost arbitrage owing to degrees of difficulty of moving the information to and from the markets. Say goodbye to Hollywood, say hello to Bollywood - and will Silicon Valley still have a hegemony in 2020?

The Cloud will be renamed at least twice in the next 10 years, it is coming, but at present the combination of relatively low system reliability, lack of decent SLA protection and too many competing platforms without sufficient plug and play and interoperability will keep it as a niche sport, and users in the 20-teens will mainly opt for hybrid models of Cloud + Own Equipment - though the niches will grow steadily. As with Electricity, the Cloud will have to be "tried and tested" at each layer before widespread adoption. Services on it - the ASP/SOA/SaaS/Whatever the next Acronym is layer - will continue to develop with bandwidth, penetration and sheer cycles of code-writing. Friction will be provided ny attempts to run wllaed gardens (it was ever thus)

Another part of the commoditisation story is the march of Moore's Law (or similar). By and large in this space you get twice the power at half the cost and size every 2 years. This won't change anytime in the next 10 years, and a 2**5 = 30x reduction is a useful tool to think about 2019 with - imagine iPhone and basic PC like functionality for $10, in devices the size of an iPod Nano for example! This is going to drive two other trends onwards:

- ubiquitous multimedia, at least in the OECD (this TED talk by Patti Maes is a sign of things to come)

- the Internet of Things - never mind a billion new mobile users, think a trillion new dumb devices. Say hello to Mrs Fridge!

5. .....but People are Still People. The more things change, the more they stay the same

The technology changes, we talk and interact with each other in new ways, but what we do remains the same. The human condition will remain to hatch, match and despatch, some will always want to seek power and money, and while running this never-ending circle of life we will still try and scrabble onto higher planes of Maslowian existence, and try and keep ourselves entertained in our downtimes. And being human we will still try and get something for nothing so the dreaded parasite that is advertising will, like death and taxes, remain with us for a while yet. So here are some things that this implies:

- We have a hypothesis (based on our reading of behavioural economics as it stands today) that genetic imperatives drive time value of attention, so people will pay real money for things that help them match and hatch. Anything that increases privileged access to mates, money, status, nest building etc will be seen as valuable. Entertainment media is by and large lowest value time (if you had better things to do with your time, you'd do it) so will continue to struggle to fight free models. Its a volume game with low prices.

- Advertising will move over to online media as attention shifts, but owing to the lower audience sizes and almost infinite inventory, the mean (and I mean "mean") rates will stay lower. Over the decade the best empirical metrics will emerge and establish a better economic basis, so by end 20-teens we expect Online Advertising to overtake "trad" advertising in revenue, if not in profitability (Yes, that means hitting c 50% of value by c 2017 or so). Some of this will be from growth, some will be from decline in the overall market as Advertising is just less relevant in a networked, interactive digital world.

6. Hype (and dodgy economic theories) spring eternal in the human breast
In 1999 there were high priests of the New Tech Age then as now. Anyone churlish enough to be a "New Age Economics Denier" was castigated, lambasted and told they "didn't get it". By 2002 the sceptics had been proved largely right as the dotcom bubble deflated to complete limpness. But by 2004 the New "New Economics" of the Internet was on the rise again with Wikinomics (allowing me to calculate that New Economic memes have a c 2 year refraction time) and by 2009 in full swing with various flavours "Free" etc etc which. We predict most of this will be largely discredited by 2011 and a 2 - 3 year period of a Return to Rational Economics will ensue (it has already to an extent).

Companies built in this period have historically been strong, simple because they are built on solid fundamentals.

Ecclesiastes Law however states that, by c 2014 there will be a new inflationary bubble in something, and cometh the hour, cometh the man (or woman). A new generation of Tech Wonderfulness will thus be declared, that is of course quite unlike anything before, and it will of course herald in a New Economic Paradigm which (oddly enough) will promise to allow you to get richer with less effort, and that people who don't "get it" will of course be labelled as crusty old farts.


7. There is a Google or two in every Decade

In every decade a dominant New Media New Entrant emerges at a new layer that they make their own. In the past they have tended to be West Coast US companies (access to the worlds largest ubiquitous markets for risk capital and customers has pretty much guaranteed that). In the 80's it was Microsoft, in the 90's it was arguably AOL (and maybe Yahoo), in the Noughties it was Google.

Ten years later the last decades Cool Kids are nearly always still around, but now as large corporate entities rather than cool young companies. They are no longer the Innovators of the emerging "new" New Media and typically strategically buy innovation, and try and spoil it elsewhere. The ones for the 20-teens all exist already, the issue is spotting which has 10 year legs. In Social Networking I'm betting that Facebook is the New Yahoo, and something else will be the New Google. Maybe Twitter, maybe something in left field still.

Re Google in particular, we think that their search algorithms are going to be increasingly less useful over the decade - in a way a self inflicted goal, as by adding value to links means an entire parasitic SEO ecosystem has emerged. Given that Google funds itself entirely on its link economics, but subsidises many other ambitions, this is going to make its activities in other arenas harder over time. (I see John Battelle of all people, has come to similar conclusions)

In the next 10 years it will probably still be West Coast US companies that rule, but it will be less certain. China represents another huge, fairly homogenous market with its own barriers to entry, and Baidu seem to be able to hold off Google.

Others that are interesting are around the disruption of very big industries today - the growth of online video (Hulu), the disruption of Olde Print Media (Huffington Post, Techmeme) and the emerging Non-bank Banks (unless they get regulated sooner). Also the change to digital in the basic Telco layers implies the emergence of "Soft" Telcos (Telecoms companies that own no direct assets) - Skype is the first wave.


8. Planet Mobile will always overestimate benefits and underestimate time to get them

Planet Mobile runs on the perennial "You can use your mobile to select a great restaurant nearby for you and your friends" business case. It's been used to flog everything from m-commerce to location and augmented reality based services over the last 10 years. Three things have changed for the 20-teens though:

- The rogue entrant that re-sets the game for the next round has emerged (Apple and the iPhone). (Rogue Entrants use the technology available to build the "obvious gaping hole" system that the incumbents for various commercial reasons refuse to build). Going back in history, Apple always enters a poorly structured game with a well defined complete - and closed - solution, capturing about 15 - 20% of the more profitable market while the rest is then duked over by the guiants, and the lower economics usually means 1 dominant player emerges (Microsoft). Google Android is the early pretender for the Microsoft role in this industry, but its still early days and the shoe (and penny) still have to drop for the incumbents

- Pricing and network mean that the other billion or so of mobile users will come online this decade (Mobile penetration in Africa is now similar to the UK in 2000), but they do not have the economic value. Their entrance, however, will transform the market for follow on services (and quite a number of other Olde Industries in these locations)

- Smartphones do more stuff - which means that (i) a bunch of things PCs and other single purpose devices did will be taken on board, and thus (ii) a whole raft of new fixed/mobile applications will emerge. But "Mobile" will stop meaning "Phone" and mean anything from Handy via Tablet through Netbook to Laptop and whatever else comes along that can connect to the mobile nets (Mobile TV sets anyone?)

So, does this mean that Planet Mobile is now about to enter its (much heralded) decade of hegemony? Yes, it will be a lot better than in the Noughties, but... the rule of thumb of dividing all Planet Mobile projected benefits by 2 and multiply time to get them by 2 is probably as useful now as 10 years ago. apply.

Well, that is the projection of the Noughties going forward, but there are a bunch of "Intersection" technologies (those at the intersection of some of these" and some newly emerging trends which will help reshape things too. In the spirit of keeping things Prime, here are 5 we see emerging


9. Privacy (and a related issue, Trust) will become a bigger and bigger factors.

We thought Privacy would hit the headlines after Beacon, but it didn't - however, right now the buzz about Privacy is higher than its ever been. We expect nuanced Privacy to become a major issue in the design of next generation Social Nets, Web Services and eCommerce systems. Online Trust will see huge leaps forward in quantification, simply because without it a lot of the transactions (social, financial, political, etc) that we take for granted in the real world won't happen online very easily above a very basic level. It will require solving a wide combination of Social Capital, Behavioural Psych/Economic and good old Ownership issues. Plus Privacy, of course.

For this reason, by the way, I am less bullish on Location Based services - they are a privacy timebomb waiting to happen, and you just know some overenthusiastic and under-ethiced entrepreneur is going to build the short-cut system that gets accused of facilitating robbery, rape and worse.

(I rather liked Greg Battle's post and his comment that "there will be a sea of people paying for a decade of crimes of youthful oversharing. Credit services will ingest social profiles/footprints as a behavioral overlay to your FICA score and a new industry of removing those indiscretions will be born."


10. How Green was my Valley again?

The sheer amount of money being thrown at Eco-Science todasy - whether you believe in it or not - will ensure that all the networking technologies we know and love will be thrown at trying to make us, our goods and chattels, and by extension the planet, Greener. Some innovations will be very valuable, some will be total Greenwash. Most will come and go and be superseded by newer, better stuff as its very early days for most ICT based Greentech.

If I were to make a guess, its that the Greenwave will be more prevalent in the next few years and recede towards the end of the decade. This is because I (personally) believe much of the current climate change/AGW hoo-ha will be seen to be over-egged and the massive rampups in funding its had over the last 10 years will recede. Bt 2015 the colour of Green will be more "classic"

Anything that makes more efficient use of existing energy assets (renewable or un) is probably a real win. There is also so much money and interested vested in the whole Carbon Trading arena that no doubt many maths PhDs' time will be spent adapting systems from the financial industries to game this one.


11. Enterprise 2.0 will be rebadged with a Three Letter Acronym by 2011.

No one implements big new systems in corporates without a TLA Besides, Enterprise 2.0 as it stands is too limited. It reminds me of Office Automation in the 1980's - a great set of new technologies that aren't yet quite hitting the really big economic levers of the business. By the time Enterprise 2.0 is attacking the big levers - sales effectiveness (CRM), business operations efficiency (TOC, JIT), Churn reduction and Customer Satisfaction (TQC, 6Sigma), reducing CAPEX bills (BPR) and massively improving information flow (MRP2, ERP, OODA) then it will need a new name.

This is not to say that Enterprise 2.0 is not relevant, just that its still a very early day story with immature technology. What comes after is (literally) a 64-billion dollar question.

The Enterprise 2.0 movement will stand or fall on its ability to do 3 major things

- gain new customers/users/donors/whatever,
- keep them
- service tham at lower costs than current and "Good Enough" new systems will.

12. Government 2.0 will be a slow train coming

There are no doubt efficiencies to be gained by moving Governments services onto teh Web, however we believe it will be slower than many anticipate as:

(i) Those with power hate giving power away.

(ii) Governments, by and large, do not have stellar records in adopting new IT systems early, nor in rollling them out fast and successfully. Potential cost savings will be counterbalanced by the costs of purchase and implementation in cash-strapped public services. There will no doubt be Digital Inclusion lobbies arguing for 100% access to new services - a worthy aim, but it will serve to further slow things down. But full inclusion is expensive - however, so long as there is not Digital Inclusion, you can't take the savings. This is the Catch 22.0

(iii) Privacy is a major headache with public data, and current 2.0 systems are far from secure

(iii) Also, current networked systems are too simplistic to deal with the 5% of unpleasant people who will lie, cheat and scam. We can easily design Government 2.0 systems for the 95% of (usually) honest citizens (95% of the 2/3rds of the population who will have Broadband access) , but to do so will be to accept higher risk, and probably more collateral damage from the bad guys. And given how risk averse and lawsuit-keen We The People are en Mobbe, it will be hard for governments to do this. Even if they wanted to, which they don't

13. The Internet of (Moving) Things

Aka Robots. The combination of Moore's, Metcalfe's and .... Law means a lot of ICT power can be put on a fairly sophisticated yet inexpensive moving frame today. The Internet of Things is not the endgame, some of these things will be quite smart, some will move, some will do other fairly complex, unpleasant tasks (like fighting foreign wars, cleaning houses and dealing with low price service needs).

Anyway, that concludes a heroic set of guesses. I should add of course that our methodology is to write scenarios, calculate critical paths, milestones and "points of no return", attempt to understand the game theory of the scenario - and revise it every so many cycles with new evidence - so we will have changed our minds in a years time