Music Futures #2

Last night was the second in a series of 4 seminars hosted by Generator exploring the future of the music industry.  The session featured a number of established and relative new (but influential) players in the digital music market place.

Image: Peter Kirn, 2007, Flickr, CC

The guest panelists include Dave Haynes (Soundcloud), Atan Burrows (mFlow), Ian Greaves (Napster) and Colin Rice (We7).  The general theme of the session was similar to the previous night: digital downloads versus streaming services, looking to address the opportunities presented by services driven by retail and those that work on an access-basis (and whether or not the two models are mutually exclusive).

In a slight departure from my last post in this series, I've attempted to precis the discussion that took place last night in a rather linear structure, adding a few observations and comments where appropriate.

Killer/filler tracks?

The first issue to be raised revolved around the decline of the album sale and the emergence of a la carte download services which permit music consumers to cherry pick individual tracks (eg iTunes).  The panel was asked to consider whether or not this has led to a position in which people now have more control over the quality of content they access rather than paying for an artist's entire catalogue (underpinning this assumption is the notion that albums contain 'filler' tracks that casual listeners may not want or need).

Atan (mFlow) responded by suggesting that shopping for music online today has become boring and sterile. The shopping experience lacks innovation - it's like shopping for groceries. Indeed, many supermarkets (like Tesco and Asda) have taken this logic and applied it to CD sales.  Shopping for music needs to be more integrated into the social life world of music fans - something mFlow aims to capitalise on.  Users can 'flow' (share) tracks they like on the service with their followers (it's also integrated into social networks like Twitter and Facebook) who can then listen to each track in full.  If they go on to buy the track the person who 'flowed' the track gets 20% of the cost of the tune - quite a unique proposition.

Colin (We7) suggested that many companies are looking at 360 degree deals as a way of taking a slice out of merchandise and live performance opportunities in the face of declining physical sales. There are now a variety of different sources from which artists can generate revenue - record labels still have a role to play (eg skilled at marketing large acts like Madonna etc) but that role has changed in lieu of the DIY ethic. They aren't dead just yet despite it being frequently predicted. Going down the major label route is useful for certain kinds of artists but there are more tools available to help empower musicians today, enabling them to have greater control over licensing their content.

Ian (Napster) also added that major record labels are good for developing artists through their career but the labels do need to see some return on their investment early on (usually by the second album).

Free or pay?

The question of whether or not people were still willing to pay for music reared it's head.

Dave (Soundcloud) made the point that the growth in digital is not replacing or making up for the decline in physical sales directly. The reason for this is largely due to the industry itself as having been the barrier to the growth of digital. Digital Rights Management (DRM) software in the case of Napster and iTunes are cases in point. Fearful of piracy the major labels insisted that digital files be encumbered with software which monitored users and limited how they used the music they had legitimately purchased often in multiple competing file formats that were not always cross-platform compatibile.  This was a headache for the typical casual music consumer.  The industry effectivly applied the brakes that prevented mass migration to digital.  In recent years a relaxation of the rules governing DRM and the growth in streaming services has acted to redress this - convenience of access should bring more people in and therefore bring in more money from smaller payments in greater volume (eg Spotify's ad-supported streams). We are seeing a shift from  a period of music ownership towards music access.

Atan emphasised that ownership is still important to many music fans, if not all of them, and catering to a diverse set of interests in a flexible manner is what is needed. People will buy content but they are becoming more discerning about what they are willing to pay for.

Radio

The chair raised the point that most music listening (80%) is done via the radio and most of that is done in cars. How do companies monetize this?

None of the panelists were able to tackle this mobile issue directly.  Colin was keen to highlight that We7 is adding more social functionality to their newly upgraded radio service which allows people to share their musical taste with friends via Last.FM recommendations, etc.  It also allows people the chance to discover and hear music related to their intersts.  One of the problems many music fans face when confronted with huge catalogues of millions of tunes is the scope of such access results in them freezing up due to the limitless possibilities - this is where profiling and recommendation radio services come in.

Ian claimed that when Napster started (as a legal service!) people didn't really 'get' what a monthly music subscription service meant. Clearly we've moved on since then. Historically people used to trust formats (radio, CD, etc) as you knew where you were - a CD played in a CD player - the proposition was simple. A subscription service didn't always make sense to people and took a while to become simple enough for casual users.  Formats have largely been static. Going forward you'll want to access your music that you've selected wherever you want, whenever you want - that will be where digital will innovate.

Dave returned to the point that early services crippled by DRM that involved platform specific third-party clients installed to Windows partition drives on Apple Macs, where users regularly had to make the effort to reset all the DRM licences on one machine in order to take the music on the go. As an early adopter, he was willing to make the effort for the benefits but he was not typical of the casual market. The dream is a cloud-based solution which includes a mixture of tracks owned alongside those leased via a service in much the same way that Spotify works now; combining a users personal iTunes library with that of the cloud-based service.

Recommendation and discovery

The chair posed the question asking how important recommendation engines will be in the future for music discovery?

Atan talked about some of the research mFlow have put into various algorithms.  This showed that people like to talk to each other about music and share their thoughts. This (sharing) aspect is one of the most important issues that couldn't be talked about a few years ago, when the industry associated sharing with giving away content for free, piracy and the fear of declining sales.

Colin claimed that personalisation is important part of the user experience. If a service feels personal and  less mechanistic or pushed at you by the industry, then music fans relationship worth music changes. We7 is increasingly looking at social media integration.

YouTube Fear?

The chair recounted an anecdote about how his 13 year old son consumes music, typically via YouTube, and questioned whether or not the audio quality of the service of the content itself was worthwhile. For him YouTube is primarily a video platform.  As one of the key spaces for new music discovery amongst the youngest demographics is YouTube a threat to digital music distributers?

Dave took umbrage at the chair's intonation that YouTube may be full of 'crap' or questionable content, or even that it is just a video platform rather than music. However Dave sees the platform as an essential creative outlet irrespective of how professional the content is. In this instances YouTube is a democratising tool that allows people outside of the mainstream system to gain some traction. Some smaller acts are seeing 4 figure sum monthly returns from their YouTube content alone. Companies are increasingly hiring youth teams for advice on how to generate more subscribers and connect with music fans. YouTube gives good control to labels or acts in that there are various controls offered to users (eg around video embedding, uploading and playlist controls).  Companies or acts can generate money around their video content by taking advantage of Google Adwords and links to buy.

Atan suggested the reason why YouTube is successful with kids is that it just works.

Ian highlighted a problem within the industry which seems to have a bizarre distinction in how they view video.  They view video as a marketing tool, partly due to legacy reasons associated with promotional campaigns, and often are not overly concerned if music videos leak to YouTube before they've secured an audio distribution deal or licensing with digital retailers.  But the digital start-ups trying to make headway in the audio distribution space -  companies like Napster -  they aren't allowed to carry these promotional releases in audio form until an official release date has been agreed. Even users uploading tracks and videos to YouTube are viewed by many in the industry as an adjunct to marketing.

Dave suggested that it would be in the best intersets of digital retailers to close the release window gap. The industry is configured to work over a staggered release window with their eye on promoing tracks in print or waiting for confirmation they've made it to Radio 1's playlist. A release date may be way off but the viral nature of the Internet means tracks can leak quickly, circumventing the often slow processes of the industry. Some music journalists (the NME was named) still insist on review copies on CD so that journalists can make some money from selling them! This has led to a recalcitrance regarding digital as they'd lose this perk.

Freemium

The question turned to whether or not the freemium business model was a feasible one?  Typically this is often described as giving away content for free (often ad-supported) to the vast majority of users whilst offering a paid-for premium service taken up by around 10% of users.  The paying customers typically offset the costs of the free users.  I've discussed this model a few times on this site so regular readers will be familiar with the idea.

Ian started by describing Napster's early attempts at dabbling with it a few years ago in the US but they struggled to make enough money required to pay the labels for the licenses from the ad-funded service.

Colin's company, We7, currently works with both freemium and subscription models. They have around 10000 UK paying subscribers with millions more accessing content for free. Back in April We7 announced that they had managed to make the ad-funded model work for them.  This is important as much of their funding is still reliant on venture capital.  Their recent switch to the  radio stream makes a lot of sense as it typically cost 30% less than the licences for subscription services.

Dave pointed out that being free allows you to get heard when radio playlisting isn't working for artists. Soundcloud is less of a consumer destination, rather its a space where musicians (both amateur and professional) can upload and share their content with certain controls, circumventing traditional radio.  Even if you give content away for free you have to be savvy about the social contract involved and get something back - eg data on users, geography etc. This can help musicians targe certain geographies for  live tours or related campaigns. Soundcloud is built of the premise of the social share: ensure you get something in exchange for the download.  You can give users of the service the ability to download tracks providing they tweeting or embed the content in Facebook for increased presence. Location-based data is increasingly important and there is promotional potential in this area.  Recently James Blunt gave away music to people that checked in to a certain place at a certain time using the GPS in their phones and a location-based application like FourSquare, Gowalla or Facebook Places.

From this point on the panel took questions from the audience.  It became clear that one of the biggest barriers preventing start-up companies from joining to what seems like an already overcrowded digital retailing space is the cost of licences from the major labels for delivering digital content to music fans.  The majors seem to think that cannibalisation of the existing business models will occur if the costs they charge come down. Digital Music News recently carried a feature listing 100 companies that have tried to make it and have failed.

Dave noted that some labels' business models revolves around ensuring they extract as much venture capital money as possible from new startups.  This focus on short term economic gains undermines the ability to develop, nurture and sustain new platforms and opportunities for growth. Initially the industry didn't think it needed these new digital startups but the decline in paying customers has forced a redress of the balance somewhat.

The panelists where in agreement that there will still be innovation in the technology going forwards despite the licensing barriers, notably around the ability to build API's around limited types of access to free services.  Features like this helped to sustain Twitter's growth and it isn't inconceivable that something similar could happen with music catalogues, creating interesting data mash-up services.

One current problem that many digital services face is a lack of standardisation around metadata, eg things like playlists, top-rated tracks, etc - a playlist created on We7 cannot currently be taken to Spotify if a user decides to switch music services.  This will become increasingly important as more services will be built upon the same 11 million or so tracks currently licensed.  The prediction here is that metadata will be more important that tracks owned.

You can catch up with the event via the video on the Generator site here.

Music Futures #1

I've just got out of the first Musical Futures seminar (the event can be watched again via that link). I'll try to blog my thoughts and responses after each one this week.  Thanks to Generator North East for putting these events on.  This session was themed around the question as to whether or not digital distribution can save the music industry. The session was chaired by Paul Brindley from Music Ally.  The panel was consisted of Scott Cohen (Music Orchard), James Healey (Universal), Tim Hadley (Omnifone) and Chris McLellin (The Music Void).

The session opened with a representative from Music Ally stating that, despite some recent success (digital accounts for around 25% of sales), most of the markets in the industrialized world are beginning to stagnate, notably in the US and France.

Much of the discussion orientated around questions of technology, access and licensing issues. The general feeling from the panel was that the current pricing model of subscription services did not seem to correlate with the willingness of customers to part with the cash for such services. Currently services offered by the likes of We7, Spotify, SkySongs, etc retail around the £5-10 per month for a mixture of packages. Some include the ability to transfer tracks from PC so they can be played over mobile devices, while other deals occasionally include the ability to download and permanently keep a handful of digital files. The panel suggested there are about 2-3 million of these subscribers globally - not a terribly large figure.

One of the issues which didn't seem to get raised or addressed fully was why these services were not always popular. There was some general acquiescence that music listeners are getting content for free from P2P services or from sites like YouTube. It was also acknowledged that free services from the likes of We7 and Spotify might be enough for younger consumers who have grown up with digital services.  One of the reasons I've never been satisfied with these services is that more often than not there are way too many artists I like missing from the vast majority currently on offer.

Several times the conversation circled around the questions of access over storage. Several panel members (whose business model revolves around providing technology delivery solutions and infrastructure support) were insistent that streaming was the future of music consumption. However, they were less sure as to how these services should be priced or how long it would take for these services to become ubiquitous? It was noted that much music is consumed in the car yet the technology in these are frequently outmoded when compared to current modes of music consumption . Wifi enabled cars are not yet a common occurrence - hell, DAB isn't even commonplace yet. The design lead-in time of in car audio tends to be quite long so changes need to implemented sooner if it's to gain traction.  However, wifi enabled cars with some decent sized storage drive would enable 'over the air synching' of future music services.

One of the panelists was very keen on the idea of streaming and the willingness of music lovers to convert to paid-for services given the right incentives. The underlying assumption was that music fans will not be concerned about owning content in the future, especially as the young grow up. He compared subscription packages to the average spend of a BSkyB customer (which is something like £500+ per year). For him this was symptomatic of people not being bothered about owning content, but this is a strawman argument. BSkyB took a long time, almost a decade, to capitalise on it's market position and become profitable (there are many competing music services). It is also in a monopoly position earning large revenues on the back of its live sports offers. BSkyB is a very different proposition to a music distribution or subscription service as it is almost the only place go to watch Premier League football. It's not clear how this kind of model can be used to work in favour of the music industry. Bundling of services does already exist (eg Virgin Media's triple and quadruple play of TV, mobile, broadband, landline) but as many users of subscription services will testify, there are frequently glaring gaps in the music catalogues of subscription deals. Maybe this is how it relates to BSkyB - after all not every football game is ever shown?

Much was made of the next generation of 4G mobile broadband. It will be able to deliver much greater bandwidth and thus provide a revolution in terms of music consumption across a much bigger range of internet capable devices than currently exists. As for who will pay for these networks to be rolled out and how musicians, labels and music fans will benefit - these were largely ignored.

Overall, the panel was quite skeptical about the long term future of physical formats like CD and vinyl. However it was noted that physical formats will always have niche appeal in terms of collectors items or gifts for family and friends.  Very little consideration was given over to the various uses people put their music to that streaming fails to support (notably DJs and music creative who remix, edit, mash-up content).

More to follow tomorrow hopefully where the session will be broadcasting or distribute...

The Twitter hashtag for the event is #musfutures in case you want to follow proceedings although it must be noted there seemed to be some issue with the wifi signal in the basement of the Northern Stage. I ended up tweeting via text message in the end. It might have just been me?

What will Apple do with that $50 billion?

File this one under 'thinking allowed'....
Image courtesy of Ben Stanfield, 2007, Flickr

Yesterday Apple had their 'Back to the Mac' event in which they unveiled a new series of MacBook Airs and updates to the iLife suite of software, as well as Face Time for Macs. They also made some impressive sales announcements regarding the success of iPhone 4, despite falling a little short of the iPad sales they were hoping for. You can watch the full event by clicking this link.

However, yesterday's event was all about the Mac computer range.  The US market share of the Mac is 20.7% and the machine makes up 33% of Apple's revenue.  13.7m Macs sold in the 2010 financial year, bringing its revenue to  more than $20 billion.  There have been 7 billion downloads from the app store to date and they to launch a similar store for Mac software.

These reveals all came on the back of an earlier report which claimed its quarterly profits leapt by 70% to $4.31 billion and its revenues increased by 66% to $20.34 billon as it sold 14.1m iPhones, up 91%, and 4.19m iPads (they had expected to shift 5 million iPads).  So much for 'antenna-gate' harming sales.  Their last quarter revealed turnover of $20 billion and they are sitting on a cash reserve in excesses of $50 billion.  Based on their market valuation, Apple are set to overtake the oil company Exxon within a year (after already having overtaken Microsoft's value).

Money from Apples

What I'm really interested in is what Apple are going to do with that $50 billion.  Steve Jobs has hinted that there may be some big acquisitions in future.  What could Apple realistically buy?  It seems unlikely that they are going to go for a shares dividend and their real success in the last decade has come in the guise of harmonising hardware and software, so it wouldn't make sense for them to buy a certain troubled search engine would it?  This seems doubtful as that would pit them against one of the other tech behemoths with whom it is already fighting on the software front, namely Google (Android vs iOS4).  There were rumours back in April that Apple were interested in ARM for their CPU business, but that no longer seems likely given the success of their own A4 chip.

It would seem logical that Apple would build on their strengths (hardware+software integration), design principles (usability+simplicity), and their recent successes in the gaming sphere (iPad+iPod Touch+iPhone+Steam for Mac+Game Centre) and enter the next-generation gaming market place.  Both Sony and Microsoft have announced that they expect their current generation of systems to last another 5 years before being replaced which would give Apple ample time to design and build a system that would be ready for launch in time for the next console cycle - they might even be able to steal a march over their rivals...

Apple are a savvy organisation and Jobs has a keen eye for market opportunities.  They've had great success with their portable gaming devices and must be acutely aware of the rapid domination of the gaming sector when it comes to home entertainment.  They already have infrastructure success when it comes to direct selling of entertainment direct to consumers (iTunes and the App Store), and the industry is currently awash with talk of cloud-based gaming services.  How long will it be before Apple realise that they can take a bite out of this sector?

This idea isn't new; games analyst, Michael Patcher, predicted something similar back in March this year, however, Apple have never been in a stronger position.

The Future of TV: Google?

This month Google has released a new video highlighting their new proposition for revolutionising television.  It seemed like only yesterday that Apple were making big noises about their TV proposition. Michael Gartenberg (Engadget) has blogged about this Apple/Google assault on TV here.

(Image: Chris Messina, 2010, Flickr)

In case you didn't already know Google are planning on releasing their take on TV in two forms: a new internet-enabled set-top box which plugs in to your high definition TV as well as hardware deal with Sony (TV) and Logitech (peripherals). The hardware is due for imminent release and will be based on the Android software which runs on many smartphones and upcoming tablets.  It will also use a version of the Chrome browser.

I've embedded the latest video below, so go ahead and take a look.



Right.  Did that make you want to buy one? Me neither. I'm not sure I'm going to benefit from having stocks and shares info displayed down the side of my screen.  I'm also not sold on going to my TV to read Twitter - personally I like to use Twitter on a smaller device whilst watching TV.

Features

However, there did seem to be a number of interesting features hinted at in the video.  The presence of the search bar that should help web-TV users locate audio/video content on the web and quickly display it on the screen could be useful. Google's killer app is still its search dominance and if it can find a way to bring that to searching for TV-on-demand content then they might just oust FilmFlex (Virgin), Lovefilm or Sky's on-demand services.  However, I strongly suspect that Google are not going to provide their own platform for video content (other than YouTube) and will partner up with services like Netflix, Hulu and Amazon in order to deliver that content.  This seems similar to the Apple TV proposition.  Come to think of it, even Microsoft and Sony are playing around with this type of delivery via the Xbox and Playstation platforms.  Suddenly, the space under the living room TV is seeming a little over-crowded.

The ability to stream audio/video content to the "best speakers in the house" (er, they would be what now - the 5.1 system or the hi-fi?) seems like a decent proposition especially when many HD TVs come with underpowered audio.  Also, the Android Marketplace seems like a great idea for providing a platform that can grow and evolve as time goes by.  There are rumours that Apple are planning the same thing with Apple TV (especially as it runs a version of iOS4 - the software that powers the iPhone/iPad/iPod Touch).  But the biggest issue that needs addressing here is advertising revenue.

Ads?

Google has got to where it is today by being able to harness the power of search and attach relevant targeted advertising to the several hundred million search requests it receives daily.  If Google can manage to break into the TV market place and gather information about viewing habits it would have another feather in its cap.  It could deliver real time targeted adverts to TV viewers in a way hitherto impossible for mass broadcasters.  This seems to be a logical reason why Google would want to enter the TV market place.  Who else has the power to disrupt existing arrangements between broadcasters, content makers and advertisers?  If Google are successful, they could transform the way in which advertising revenue funds the commercial television model by taking the funds needed to support investment in expensive content out of the hands of producers and broadcasters.

I'm not sure that this is such a good idea, but there's no guarantee that Google TV will actually be successful.  After all, Google has a track record of products that haven't gone on to change the world (Wave didn't transform email).  Perhaps, their TV venture may not succeed, but it's built on a platform (Android) which is already proving its worth.  The future of television looks a little cloudy from here...

Discuss the future of music (in Newcastle)

One of my interests is the music industry especially the impact of digitisation and digital distribution, and this frequently spills over into the modules I teach at the University of Sunderland.  I was pleasantly surprised to discover a series of events being hosted by the popular music development agency Generator in Newcastle from November 15th-18th. These free seminars will feature a number of industry professionals, writers, journalists and entrepreneurs discussing various aspects of the music industry, and should appeal to anyone with an interest in the future of music distribution.  Spaces are limited so check the details of each daily session and get signed up ASAP

15th November Will technology revive the industry?

This free seminar looks at new technology and delivery models and what they mean for distribution and retail in the music industry. Chaired by Paul Brindley from Music Ally, the panel will look at whether mobile applications or cloud based delivery offer new business models or revenue streams and whether digital distribution is strictly relevant for all markets.

In particular the panel will look at how different markets are reached by differing media and whether the means of delivery is as important as the product itself.

Panelists will include:

• Paul Brindley 
• Music Ally
• James Healy 
• Universal Music
• Andrew Orlowski 
• The Register
• Scott Cohen 
• The Orchard
• Tim Hadley 
• Omnifone

16th November Digital Platforms: Broadcast or distribute?

This free seminar looks at the range of platforms for music online whether streamed or sold. The range of services available vary between those who look to get music heard and those who purely use online as a retail base but are these two mutually exclusive, how can music plays be monetised and do these platforms provide a good service for artists and labels?

The panel is made up of representatives of some of the largest platforms whose products have different applications for businesses and artists from sharing your favourite tracks to streaming original music.

Panelists will include:

• Dave Haynes
• Soundcloud
• Don Jenkins
• mflow
• Colin Rice
• we7
• Ian Greaves
• Napster

17th November New markets for licensing and brands

This free seminar looks at how music can be partnered with brands and sponsors in mutually beneficial agreements. Associations between products and music are growing, with endorsements now requiring more than a soundtrack for an advert. These partnerships can mirror 360 publishing deals with tie ins for live performance and physical releases and can go beyond synchronisation deals.

The panel is led by Rachel Wood from Woodwork Music and will look at real life examples and new tie ins to explore how artists and labels can work with brands and what the benefits are for all parties. Panelists will also look at the value of these partnerships to the industry.

Panelists will include:

• Rachel Wood
• Woodwork Music
• Will Page
• PRS for Music
• Gary Downing
• FRUKT Music
• Special Guest 
• (TBC)

18th November Is online media the industry's gatekeeper

This free seminar looks at how the music industry engages with online media. Do bloggers now fulfill a tastemaking role which was once undertaken in traditional A&R roles or are artists filling the gaps themselves with streaming, videos, podcasts and updates?

Is this a means of keeping fans updated and building a fanbase or can it provide something more? If this is the case are labels paying online media the respect it deserves?

Panelists will include:

• Karen Piper
• Radar Maker
• James McMahon
• STUNT
• Alex Fordham
• Authority Communications
• Darren Hemmings
• [PIAS] Entertainment Group

This promises to be an interesting set of seminars.  They run from 6pm-8pm.  Click on the session titles above to book tickets for each daily event.

The venue for the seminars is:

Northern Stage, Barras Bridge, Newcastle Upon Tyne, NE1 7RH

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The future of news? (a quick follow-up)

A few days ago I posted some of my thoughts on the future of news as a response to an email a student sent me.  I was a little pressed for time so I didn't manage to cram in all the points I wanted to make, so this follow-up post will be a slight update to that post.  I had a physical copy of Wired magazine open on my desk at the time of writing and I wanted to include a few points that were in their "The Big Question: New media's effect on journalism".  This is the link to the online edition.  The question they posed was:

In the next decade, what new platform will most affect journalism and self-expression?

They had a variety of guests answering the question including Arianna Huffinginton (Cofounder/Editor of The Huffington Post), Clay Shirky (Academic, author of Here Comes Everybody and Cognitive Surplus), June Cohen (Journalist and Director at TED Media), and Nick Bilton (Leader writer at the New York Times blog) amongst others, and this is what they had to say:

"I think we will see an explosion of news sites engaging their communities in the editorial process. We’ll see a great expansion of the ways citizen journalists will help drive the news: recommending stories. Technology has enabled millions of consumers to shift their focus from passive observation to active participation." Arianna Huffinginton

"There won’t be a ten-year ‘Next Big Thing’. Here’s a slice of the last ten: WordPress, Wikipedia, Digg, Meetup, Flickr, YouTube, MySpace, Facebook, Foursquare. Twitter is the new headline news, QQ the new agora, ChatRoulette puts the ‘self’ in self-expression. Expect more of the same in the next ten." Clay Shirky

"There won’t be a single dominant platform, but rather many platforms that rise and fall. Overall, my money is on mobile: real-time and massively participatory media that will be primarily created and consumed via smartphones. Twitter is the first platform to truly harness this new ecosystem. But it won’t be the last." - June Cohen

"There’s currently a war taking place between big computing companies including Google, Apple and Microsoft; they are all competing to own the mobile platform. Self-expression and journalism will be born from the same mobile devices and the difference between the two types of content will continue to blur." Nick Bilton

They all seem to point to the idea that news will be social and communicated across lots of different networks and platforms.  It will be social, responsive and more conversational.

With the advent of new tablet platforms I expect we will see more applications like Flipboard for iPad appear, which are capable of creating a news/magazine experiences on electronic devices (you can find a quick review on Wired here).  It's a unique experience in which you get to build your own magazine out of the content being shared across your social networks, including articles and images being shared across a network like Twitter. Check out the video below to get an idea as to how it works.



The interface is pretty neat and transforms the reading experience into something akin to the traditional page flipping/browsing one found in paper formats, except it will have the advantage of being able to play digital media like video and audio. If it doesn't do this yet, services like it in the future will certainly have this kind of functionality.  Having said that, the service hasn't come without a set of problems, especially around copyright and the way in which the application scrapes content from websites and then hosts that material on its own servers.  Joel Johnson has posted on this issue in detail over at Gizmodo.  Mike Masnick on Techdirt points out this is similar to the issue that News Corp had with Google in which they accused Google of stealing their content.

What this points to is that the new developments in technology and software are capable of creating a context in which more people can read more information relevant to their interests (remember Zuckerman's warning about this kind of filtering!) providing the legal contexts in which copyright ownership around content is flexible enough to adapt.  I see that as being one of the potential barriers to the future of news.

What's the future of news? Don't ask me!

This is a blog post based on my response to a student email I received asking me about my opinions regarding the future of news that I thought some readers may be interested in.  Now this is a very good student who transferred from a practical degree to take one of our theoretical degrees - BA (Hons) Media, Culture and Communication - who is currently on a Summer internship at ITN helping with their development team. It's not often that our team gets to talk about theory students doing practical work so forgive me for my little indulgence.  Anyway, they are working on a project looking at a number of issues including the the current broadcasting environment, the evolution of Internet-based news, Twitter, smartphones and how these are all becoming ever more integrated and converged, which all sounds pretty interesting.  Everything that follows has been cut and pasted from that email so forgive the spelling errors!

The future?

Ah, the future of news, eh?  I'll come straight out and say I don't know what the future is going to be and there are many people in the same boat (including news providers!).  Lots of talk circulates around mobile being the next big thing.  We've all head the hype about the iPad and how it may save journalism but it's still early days on that front.  3 million units sold is impressive but not when it set against the global fall in paid-for news content.  Personally, I have no doubt smartphones and tablet devices will play some part in nurturing news but I think there are a few barriers at the moment including technical infrastructures (like the UK 3G/4G networks, Apple app approval processes), data limitations being imposed by mobile providers (O2 and 500mb per month cap) which will restrict the way in which news is consumed via those platforms (I can stream Sky News and BBC Radio 4 on my iPhone via 3G but reach my data cap pretty quickly unless I switch to wifi meaning I'll consume less bandwidth heavy forms of news) and the prohibitive costs of ownership (iPhones/iPads are not cheap, but Android devices are affordable to many).

I'm still confident in the value of the printed word, I'm just not sure it's being delivered and curated by established news organisations effectively.  Let's look at two examples from the UK broadsheet/quality markets; namely Times Online and Guardian.co.uk

The recent Murdoch/Times paywall issue is interesting in that News Corp is happy to sacrifice large numbers of eyeballs (in front of ads) for about 10% of their audience who are willing to pay for the service.  They changed the website design so it looked more like a newspaper too, which is pretty strange.  I'm not sure a small paying audience is sufficient insurance against obscurity, especially when the Times doesn't seem to have the kind of content that other paywall sites have (ie the Financial Times has an affluent, niche audience willing to pay for business news).

Emily Bell, the former Director of Digital Content at the Guardian  (and now a New York Prof of Journalism!) has been pretty vocal about this issue, as has Jeff Jarvis (blogger, academic, journalist, entrepreneur).  You should skim Jarvis' blog for some excellent ideas on the future of (hyper local) news: http://www.buzzmachine.com/.  There is an idea that being highly visible is important for monetising news.  The more reach you have the better placed you'll be to sell advertising and services around content.  I think the latter is important here and maybe more important in the future.  The Guardian are currently toying with their Extra service (http://www.guardian.co.uk/extra) - a £25 per year service offering live debates, news room visits, masterclasses, liver performances, exclusive offers etc to subscribers.  It might help build reader loyalty - the incentive to pay and get something out of that paid-for service.  It might also be a last ditch attempt to stymy the massive losses they've been posting the last couple of years.  Who knows?

I do know that The Guardian are interested in hearing from their readers about what they should do next.  As an iPhone app customer I've been asked to take part in various feedback sessions and one online Q&A did ask about whether or not I'd pay a monthly subscription (for the record, I'm more than willing since I use their website a lot and have stopped buying their papers for the most part).  It's an idea that might work for them, but it might backfire - especially when there is so much freely available content (BBC, I'm looking at you) that readers can go to.  It might be in their best interests to keep the content free but build in some additional features into the application such as personalised content.  Currently app users can pick their favourite themes for quick reading and share relevant stories across Twitter, Facebook,  and email but there is no way to actually engage with the news from the portable device.  This seems to be completely at odds with their main website functionality.

Curate and engage

The ability to comment on stories and engage with writers via the blogs over on Comment Is Free is a model of how to curate and sustain reader attention.  I'm frequently surprised by the sophistication and persuasiveness of argument that can be found in the comment section by Guardian readers.  Sure, there are moments when the ability to hide behind a pseudonym allows for a fair bit of trolling, flaming and nastiness, but this is superseded by the positive forms of engagement on offer.  Add to this some of the excellent daily/weekly podcasts they put out (Tech Weekly, Science Weekly, Media Talk, etc) feature insightful news, relevant expert guests and feature some of the highest production standards (on par with the BBC) all of which they sustain and curate via their main news site as well as with Twitter feeds, Flickr groups and Facebook pages.  They have a consistent and wide ranging presence, all of which push the brand to readers in ways that being behind a paywall prevents.

My feelings about Twitter as a news source change regularly.  I started out by using Twitter as a way of discovering news stories when the number of people I followed was relatively small (ie less than 200) and manageable.  As the number of people you follow increases it becomes harder to negotiate the inane from the relevant, especially as Twitter is geared around short bursts of phatic communication.  I suppose this is one of the reasons why the Lists feature was introduced, so users could tune in to certain people and not others at any given time.  Twitter is good for pointing people to interesting stories or links but it doesn't quite beat a good RSS feed in my opinion.  There's no real way of knowing how long Twitter will be around for, especially in its current guise without a clear business model, so I'd be cautious about seeing it as the future of news.  As a cost-free network for connecting people with interesting things to say, Twitter is great, but it isn't a creator of news content with some exceptions (see this fictional dystopian story for an example: http://vimeo.com/10060159).

Mob (a near-future science fiction story) by Tom Scott from hurryonhome on Vimeo.

I haven't really got around to talking about books on the subject and I'm going to have to be brief.  There are many writers who have sung the praises of the Internet in it's various stages of evolution: as a medium of abundance, a pluralistic space, a democratising tool, etc.  One of the better books I've seen in recent years was the edited collection by Natalie Fenton (2009), New Media, Old News: Journalism and Democracy in the Digital Age - there's a few good chapters in there.  There's one which suggests that the despite the Internet bringing us new ways of reading about more diverse material we are actually becoming less engaged with differing viewpoints.  We tend to consume news or info that already supports our pre-existing ideas. The irony here is that the world of abundance hasn't broadened our engagement - rather we've filtered our world views through lenses that reinforce our established positions (with the odd exception).  Add to this the academic work of people like Justin Lewis (Cardiff University) which has pointed out that massive cuts in the financing of expensive news content has led to widespread reliance on PR copy and what Nick Davies calls 'churnalism' and the future of news doesn't look so bright.

There's also a great presentation on TED by Ethan Zuckerman (from Global Voices, a site for bloggers around the world producing non-mainstream news content: http://globalvoicesonline.org/) in which he discusses how easy (and dangerous) it is to filter out issues http://www.ted.com/talks/ethan_zuckerman.html

I want to come back to a recent example of the ways in which, despite the advantages of the Internet with its easy distribution channels, the traditional news providers still have an important (gate-keeping?) role to play.  You might recall that in April Wikileaks released a video of a US Apache helicopter firing on Iraqi civilians (2 versions: one 39 minute unedited version and one 18 minute edited version framed with a quotation from George Orwell) which drew a lot of attention and criticism from the US government. I've embedded that video below but you may need to sign in to YouTube to watch it.

Wikileaks is a site dedicated to whistle-blowing and supposedly free from editorial inflections - the edited video seemed very much like editorial work rather than a objective fact.  This week the announcement that Wikileaks  had released 92,000 documents about the war in Afghanistan to the Guardian, the New York Times and Der Spiegel was an important one.  Julian Assange (founder of Wikileaks) realised that in order for these documents to have maximum impact they needed to be examined and considered by professional journalists who could make sense of the content and frame it in a way that the public could readily engage with.  There's an excellent account of this process on Comment is Free by Dan Kennedy (academic)

Whatever the future of news is, it has to be responsive to news consumers and responsible to the basic tenements of democratic engagement.  If news providers ignore their audience, they'll soon discover they have no audience.

An open blog post to the Guardian subscriber scheme

When I first noticed the Guardian's most recent subscriber drive offering it's readers a chance to 'save money' I thought to myself, 'great - a nice incentive to actually purchase the paper versions instead of frequently reading the bits I like via my RSS feed for free'. Despite my love of technology I am still a fan of the newspaper format in its paper guise: it is portable, convenient and has established sections and routes for navigation - something which isn't always as workable in digital versions.

I've noticed quite a few Guardian pages are not yet optimised for portable browsing on devices like the iPhone, in particular one of my regular favourites from the Saturday edition of The Guide: What We Learned On The Web This Week (mobile web link here for July 18 2009). This is the message which awaits mobile browsers:

How does it work?

I was curious to see how it was organised given that most people can generally subscribe to their local newsagent to have a newspaper delivered, usually with a small weekly surcharge. There isn't much difference to this tried and tested process. Essentially, the Guardian will issue a book of vouchers which can be handed in to the newsagent where you normally purchase your paper and they will sort out the rest. Subscriptions are available on a monthly, quarterly, six month and annual basis.

There are a number of packages available:

• Seven-day Guardian and Observer package: saves 33% on cover price
• Six-day Guardian package (Monday – Saturday): saves 25% on cover price
• A weekend Guardian Saturday and Sunday Observer package: saves 20% on cover price
  

If you regularly purchase the newspapers that fit into these pricing tiers then there are some genuine savings to be made. However, this is also the root of the problem...

Who still buys newspapers?

The year-on-year trends for national newspapers is a predictable one of slowly falling circulations and has been doing so for some time. The Guardian sales themselves were down over 3.2% when comparing June 2008 with June 2009, although their digital views were the best in the UK for that month, in excess of of 27 million unique readers. As we can see, newspapers are diminishing in reader presence and this subscription deal seems like a good incentive to stimulate the existing readership or to lure back lost readers.

I'm sure there are quite a few people who regularly buy newspapers, including the Guardian, every day every weekend, etc, and this offer is an ideal proposition for them. However, what about those newspaper readers who have long since abandoned their paper buying habits or who purchase specific daily editions? Is this still a good deal for them?

I would love to be a regular annual subscriber of the Guardian but I'd like a little more options in the editions available. I regularly buy the Saturday edition of the paper and frequently purchase the Monday and Thursday editions for their excellent Media and Technology sections (worth the cover price alone in my opinion). This costs somewhere in the region of £10+ per month - not a massive cost for the quality of the end product but probably too small a figure to qualify for subscription discounts - but only if I actually chose to buy the weekday editions. Like I already said, my RSS feeds do a great job of bringing those sections of the paper to me digitally and for free. I run a broswer with adblock plus installed too.

Bottom line

So here lies the rub, would a little more flexibility in the options available be beneficial to the Guardian if it means that I'd become a regularly subscriber? It's already accepted that the cover price of a newspaper accounts for much less than the products true cost. Some estimate that the the cover price brings in about 30% of the revenue with 70% coming from advertising sales. We all know that advertising rates have tanked in the past 12 months.

So what is more beneficial: the material costs of producing a discounted newspaper, delivered to subscribers via a flexible subscription model bringing in a fixed price or the risk of further dwindling sales whilst readers switch to digital editions?