Last week’s Digital Directions 11 conference held in Sydney by Fairfax Media and X Media Lab lived up to expectations by bringing together many of the world’s leading thinkers in digital media. Prominent amongst them were the American digital media pioneer Robert Tercek and the Australian born entrepreneur Tan Le. Both are also featured prominently in A Faster Future.
Tercek’s presentation focused on the changes that are happening in the television industry. He said by outlinging the argument tht 20 years ago the cable television industry had planned out dozens of new services for sales and interaction, and then did nothing for 20 years.
“While the cable industry did nothing to innovate, you had all this activity happening on the Internet,” Tercek said. “All this value was created, but it was not created inside the colsed system of cable.”
He talked about the difference between open systems – which are designed fro value creation – versus closed systems, that are deisgned for revenue extraction. It’s the model of cooperation versus coercion, and the ultimate expression of this is the walled garden, which haordes content and restricts customers from leaving. AOL was a classic example.
But the Internet has torn down the walled gardens. It is now doing the same thing to the cable TV walled gardens, as consumers start cutting the cords in favour of al la carte offerings delivered over the top of the Internet.
“The [cable] companies are afraid of their customers,” Tercek says. “And they have reason to be afraid of them, because their customers hate them. Record numbers of people are dropping the services.”
Tercek said that increasingly consumers are switching to online video services, with Netflix consuming 20 percent of prime time bandwidth no in the US, and other video services consuming another 17 percent, while 40 percent of traffic on 3G networks is video. Netflix has now reached 20 million subscribers. In the 18 months since it introduced streaming video it has switched over 61 percent of its subscribers to that model. It is now closing in on HBO, when 10 years ago HBO could have brought Netflix. Apple and Google have also introduced online video services, and Amazon has introduced Amazon Prime as a similar service to Netflix.
Tercek described this as the unbundling of the television industry, channels unbundled from packages, and programs unbundled from channels, much as the revolution in music unbundled songs from albums and packaging.
“The power of the socail Web is millions of people doing small things,” Tercek said “If you search for Tahrir Square there were 23 million photos taken in a month. Every minute of the day, a day and a half of video is uploaded to YouTube.”
He also called out five trends to keep an eye on:
- Audience is data – context is not a proxy for audience. We have the ability to target exactly with precision the audience.
- Social TV viewing – yap.TV, GetGlue and Miso – can identify what you are watching and sync up and check in and pull in the Twitter stream.
- Remix culture – Disney decided to hire someone who was mashing up clips rather than sue him. Machinima.com is getting 50 million unique viewers per month.
- Crowdsource creative – “If you are going to squeeze your margins you are going to have to find new ways to get things done.” Poptent is crowdsourcing ads, and MYVS is helping people become video-literate.
- Virtual cable operators: ivi TV has turned cable into an IPTV stream – it could also let cable companies transmit outside of their footprint.
The final session of the event was delivered by the Australian-born entrepreneur Tan Le, president of the brain interface control device maker Emotiv. Le demonstrated the EPOC, a device that reads brain waves and interprets them in such a way that thought can be used to drive actions, such as moving a virtual object on a screen.
“There are so many possible applications of this new form of interface,” Le said. “You can imaging a character being naturally and intuitively controlled by your facial expressions. Or to move objects with your mind. Or you emotional experience can be used to dynamically change the game environment.”