simondelliott

The media value chain explained

Modern technology, blogging, digital cameras and the 21st century have had a profound effect on the media industry. However the basic business of media has essentially remained unchanged.
One of the biggest changes we have seen in media is who the content creators are. Shakespeare once said “All the world’s a stage and all the men and women merely players” and at no time is this more meaningful than now. Anyone who has a digital camera, microphone and access to the internet can easily and cheaply create content. This new force is competing with professional content creation facilities and organizations.
A conservative estimate on the number of blog posts and contributions to the Internet per day is 3 million per day, and is growing at an incredible rate. The traditional concept of content owner ship is changing. Content is increasingly becoming owned by individuals rather than companies or corporations.
Professional content producers are changing their habits too they are increasingly forced to collaborate with individual or informal organisations. However the tools and resources that they have access to are becoming very advanced and intelligent. Content aggregation companies are finding that the amount of content to select from is increasing exponentially however quality is dropping.
The distribution link in the media value chain has seen and is experiencing the most change. The technical architecture of the Internet has encouraged a separation of content production and aggregation from the provider of the distribution infrastructure.
New gadgets, better screens and the ubiquitous availability of the internet has seen an overall increase in media consumption. A notable consumption increase was the when the MP3 player allowed media companies to derive revenue from media consumption during travel time, which was previously a stage where print media was the only player.

The Content Creation link in the media value chain is where the content originates. The content creators are the musicians, artists, actors, web designers, games developers, coders, photographers, journalists, authors and critics.

As this group is so vast it is difficult to clearly identify the products and companies that they use however here is some of the key tools and services that are used by the more professional members.

Apple Mac
Apple have traditionally marketed their products at this group, hence the apple focus on highly visual user interface and easy to use design.

Adobe
The recent acquisition of Macromedia by Adobe consolidates their desktop media creation product suite.

Sony
The range of digital cameras has for a long time been the industry standard, however they are facing tough competition from new manufacturers who are providing high quality equipment at a lower cost.

Yamaha
This company provides a vast range of music focused content production equipment that range from beginner to expert.

There are also a number of new on line forum style services that provide tools and support for content creators. These are becoming increasingly more important.

Content ownership has not traditionally been in the hands of the content creator, and has normally been in the hands of a studio or commercial content organization. Modern technology has caused this step be come separated from both the content creator and the content publisher. The success of devices such as the “buffalo terra station” are testament to this

The content owner has a number of different needs, mainly licence and rights management and storage.

These have traditionally been handled by using a physical archive and product catalogue however there are new online products such as getty images and 3d02, that facilitate this.

It must be noted that the content owner and the content creator are increasingly the same person or company. This can be seen in the provision of products that facilitate both content creation and storage (sites such as eblogger).

The distribution and aggregation link in the value chain is the professional production of high quality content and the also the recycling, repackaging and re-branding of either user generated content or stock content.

This link is fulfilled by the studios, the web design and software companies, the TV production companies, games manufacturers, film companies and record labels.

Again on a world wide scale this is a vast group, with large notable organizations providing some exciting and high quality products. There are also millions of other smaller companies who perform the same role.

All of these organizations feed a whole ecosystem of different industries. Some examples of these are the professional production tool hire companies, event venues, filming locations and studios, moderators, event organisers, agencies, vehicle hire and recording studios.

Consumers will be most familiar with the brands that are within the distribution link in the value chain. These are brands such a UPC, Sky, the BBC or iTunes.

The providers of this link in the chain can roughly be divided into four groups

Internet Service Providers – These are the companies such as UPC, KPN and BT who sell bandwidth to consumers. Some of these organizations also have content delivery platforms.

Telecommunications companies – The traditional telephony provider is now behind a device that is capable of delivering high quality audio and normally also has a good screen. This has transformed this type of provider into a content delivery platform.

Broadcasters – These organizations acquire content, reassemble it into a linear stream and distribute it via radio frequency or satellite or cable. They sometimes make content and sometimes are also funded via the government. Some broadcasters provide devices that allow the consumer to view content and allow the broadcaster to derive revenue from the consumer.

Again this is a huge sector, that in turn feeds a whole ecosystem of providers, some of the companies that operate in this sector are so large that they can achieve a cost reduction by owning studios, networks, device manufacturers and infrastructure.

After deriving revenue directly from the consumer the players in this part of the value chain can also derive revenue from advertising sales. This gives rise to a whole raft of advertising companies, consumer behaviour monitoring and retailing companies.

Some of the type of companies that sell into this sector are
Satellite providers – Eutelsat, globcos
Call centre providers – Accenture, StarTek, NuComm
Network providers – UPC, Global crossing, BT, AT&T
Device manufacturers – Thompson, Pace, Apple, Nokia, Seimens, Samsung
Advertising platform providers – Google, Microsoft, Yahoo
Web technology and other high tech providers – Sun, Microsoft, Google
DRM and encryption providers – Microsoft, NDS, Nagra
Government

The media industry is all about you … the consumer. Every TV show, radio channel, book, magazine, computer game and web site has been market to you probably by a professional organization that derives revenue from you or from a provider within this delivery chain. It is also important to note that products you buy are also marketed to you via the same channels.

In addition to charges to the distribution companies that are a number of other companies who derive a revenue directly from the consumer. These are

Device manufacturers such as Nintendo, Apple, Nokia, Phillips, Sony. All of which provide an ever increasing range of products targeted at fulling your media consumption. Products that do this well and have effective DRM will normally hide the cost of the device in the media consumption however products that use open standards tend to be higher cost and place greater emphasis on style and usability.

Device accessories is also another lucrative source of revenue for many companies. As computing becomes ubiquitous and more and more mundane objects become intelligent you will see media consumption devices and fashion merging.

Payment brokerage is an important part of the consumer offering. Small content creators and content aggregators would prefer to derive revenue directly from the consumer without the cost of distribution. The payment brokerage (such as pay pal) offers the consumer protection, and offers the content producer a quick way to monetize their content.

Whats important for a Media buisiness in 2009

In the past 3 years the cost of storage and distribution of media content has nose dived. This change has overturned the traditional approach to media marketing based on the pareto principle where 80% of your sales is from 20% of your catalogue; and has replaced it with the long tail approach.

Content owners that fail to recognize this are in big BIG trouble.

The back catalog is no longer an expensive burden requiring highly trained film archivists and specialists. It is instead a rich mine, full of hidden gems, and precious artifacts. But as the market becomes saturated the window of opportunity for the exploitation of this catalog … is closing, content owners need to digitize, index and sell their content while the price is still high.

The diversity of content is ever increasing. Lectures, animations, talks and TV programs are being distributed on nearly every conceivable subject can be consumed ondemand and online. Subsequently new amateur and semi professional content brands are appearing, often with massive following. Media aggregation based companies are keen to own and exploit these new brands.

Is is a safe prediction that the daily news papers will be dropping their print versions soon, and as this is this is as a reaction to social change rather than a driver it is also very unlikely that we will be seeing a repeat of the Wapping dispute.

The music industry is the pensioner of the media world, its nicely tucked up in its woollen blanket watching the world go by from the bay windows of its retirement home, it occasionally gets out of its chair and shakes its rhythm stick at a metaphorical youngster, for example associating music purchase with another retail purchase, or threatening to sue illegal down loaders or even putting on a big stadium gig. Music exec’s have to face up to the fact they must change their delivery format. Last.fm is an example of where they are going.

Note that apples recent announcement that they are going to remove DRM is a massive leap forward (especially if yo like live music)

There have been many developments to enable media consumption on the cell phone. Nearly all of these initiatives are in failure mode, however the media distribution organizations and hardware manufactures are only increasing their efforts. There is a very high reward for the company that unlocks this potential market.

Just beware … in no other sector is Sturgeon’s revelation more relevant than media .

Technical architecture solution diagram – make it BIG

If your presenting a technical architecure diagram and you want to involve the audience, then

Make it BIG!!!
make it REALLY REALLLLLY BIG.

print it out on A0 – infact print it out on 2 A0′s and stick it to the wall.
When you talk about it give your audience pens and pencils and ask them to draw on the diagram. Stick postit notes onto the diagram to highlight certain points.

Websites about stores – retail

Ive recently been asked to give my thoughts on a web site for a famous girlie shoes store. My thoughts were ..

1. Have a good favicon
2. News as an RSS feed (will help make the site stick for enthusiasts)
3. Add a picture of the designer to the wikipedia article
4. Add a delicious/dig tag to the bottom of all new articles
5. Get the designer to expose her delicious feed
6. Get the people who
   make the shoes,
   sell them,
   sales team etc … to start blogs and link back to her site
7. Set up a you tube page and channel
8. Do a head to head interview with the designer
9. Add picture of the products onto google map
10. Add some comments and video responses to the existing you tube posts,
    it better to have customers posting than a sales pitch from store manager

the important thing about girls buying shoes, is that they buy them so that other girls scan see them wearing them, the shop, and the shoe buying experience is an important context but not as important as the bar or outside context,  the site needs more  shoes in their natural habitat, on feet, causing envy.

the web site is about the dream of what the product does for you.
The store is about actually living that dream through physical product experience.

dont make a website about a store

I want to Chrome, I want to go Chrome

We have lived with Google chrome for nearly two weeks and everyone is talking about it.
Half of us think it’s great, the rest are wondering what Google are doing with their data.

I’ve been looking at it and I have to say that it’s a great product, the design is sublime, it installs perfectly and it works on all my personal and work systems. To be impartial I tried to install IE8 but it never even got past the company firewall.

The release of chrome is shows that we have not only left the old world behind but that we have arrived somewhere new. Innovation lead companies like Google are taking on the old process lead companies like Microsoft, as Dorothy would say “Were not in Kansas now Toto!”.

One last question … What If Google really is evil?

Olympic media consumption

The BBC iPlayer is currently serving 5,000,000 streams per day to just UK residents and the uptake is increasing 3 times faster expected.  

The Olympic marketing fact file for 2008 shows that the 2004 Athens Olympics had a “cumulative viewing” (analogous to number of streams) of 34.4 billion.

A rough estimate; less that than 1% of total 2008 Olympic media consumption was online.

It would not be outlandish to suggest that a significant proportion media consumption during the 2012 Olympics will be online. If its 10% or even 20% then there will need to be massive changes in the media delivery platforms.

This is a good opportunity for high tech companies and network vendors,

How to generate ideas

All you need is one piece of paper, your favorite cafe, a pencil and a lack of inhibitions

Often I am asked to think up a few ides on a specific topic, or to come up with a new architecture for a product.

This can be really difficult, especially when you have to get somthing quick. Here is one of the methods that I use to do this I call it an Ideas sheet.

The process is straight forward,

1. get out of the office … find a cafe, park, street corner any where that is comfortable that you are in control of any interuptions.
2. get a blank piece of paper,
3. Clear your mind for a while
4. Think about the essence of what is being asked for,
   who is it for?
   why is it fun?
   what is so great about it?
5. When you get an idea write it down on the paper, if words are too restrictive … then draw a picture.
6. Now try to completely forget the last idea, turn the page up side down so that you cant read it. or place another piece of paper on to of it.
7. Go back to thinking of the essence of the issue or what you want to make, when you get an idea .. repeat.
8. Now just keep going till the paper is full
9. If you spend more than an hour on this then give up, try again another day.

As you can see this often makes some funny ideas. Which are all good. When you come to discuss the ideas with your collegues they can all have a good laugh, which really helps with making the job fun.

If you cant afford a graphic designer

Are you too broke to afford a proper designer? or are you just sick of taking stick from your fluffies?

read this http://sethgodin.typepad.com/seths_blog/2008/06/7-tips-for-amat.html
subscribe to this http://typeforyou.blogspot.com
look at how typeface is used
> http://www.apple.com/
> http://www.goodreads.com/
> http://tutorialblog.org/top-10-sites-about-typography/
> http://www.bbc.co.uk

subscribe to this also http://sethgodin.typepad.com/

Add these to your favorites
> http://www.urbanfonts.com
> http://www.dafont.com

find out more (a good place to start) http://en.wikipedia.org/wiki/Helvetica

Most of all read your companies Brand design guidelines

Humans need a passive group experience

I have been thinking about the Clay Shirky lecture  on the cognitive surplus, and how its the end of TV as we know it. Funnily enough, my 4 year old son did the same thing with looking for the mouse.

The thing that I cannot reconcile with Clay’s line of thought is that people like a passive experience, if you look at behavioural data,  my guess is that they people to be fed and that the TV helps them remove the need to think, sure the kids like to play the interactive games (they also constantly change channels) but as they get older they chill out and slow down.

In terms of technology clearly the internet will replace TV, but I guess there is a hole in the market for a passive group experience.

Any Ideas?