07-2010

“The e-trailer of the future: digital media challenges and opportunities for
business”

Submitted by: Gabriel Mullarkey

25/07/2010

“The e-trailer of the future: digital media challenges and opportunities for
business”

The mechanics and methodology of 20th century industry were adopted to produce mass
culture at a rate never seen before. According to the Marxist ‘The Frankfurt School’, mass
media is a direct result of industrialism (Creeber and Martin, 2009 ). This resulted in the
unidirectional flow of information from the top-down. At the other end of the “one-to-many”
(Telus, 2008) system of traditional mass media was the passive consumer with little or no
communication channels. Much in the same way the products of 20th century
industrialisation have become inherent parts of our culture and lifestyles, the way we
consume and produce digital information will have a marked effect on our everyday lives in
the 21st century. The vast and varied opportunities brought about by industrialisation in the
last centuary will be echoed in this century by advances in digital technology.
Technological advances in recent years, namely the portability of hardware, more sociable
software and increasing bandwidth are the driving forces behind the digital media revolution.
The other key component is the consumer who now has unprecedented opportunity to
contribute content to the web. Public generated content is already channelled into highly
profitable and successful online outlets such as You Tube, Flickr and Facebook. The
abundant connections, the many to many system characteristic of the digital media age allows
for previously unheard of opportunity for businesses to connect to consumers and for those
consumers to become an economic force in their own right. The overall progression
interconnectivity is creating a complex where innumerable active life forms contribute to
growth. We must look at the digital media landscape as ecology rather than an economy in
order to gain from it (Naughton, 2010).

The proliferation of digital media in today’s society is due in part to the miniaturisation
and portability of devices that offer ‘computer-mediated communication’ (Creeber and
Martin 2009, p.107). Any low to mid-range mobile phone can receive digital media content
through a service provider without the user having to install third-party software or upgrade
the firmware. The current generation of ‘smart phones’ are essentially fully functional highly
portable computers with all the functionality of a personal computer. A variety of
applications are available on these devices that help the user stay in touch with friends and
view online content. These devices have reached a level of intimacy with people never before
experienced by personal computing.
The progression from telephony device to interactive multimedia display makes mobile
communication devices an attractive new platform for struggling traditional media publishers
to launch their products to digital media generation. The current economic downturn has
severely affected advertising revenue for traditional print media. In the first half of 2009,
almost 400 magazine titles have gone out of business in the US with many others migrating
to the web as their only outlet (Worple and Kissing, 2010). Conventional press rely on
industrial printing processes and extensive distribution channels which are both very costly
and labour intensive. Traditional processes are simply not compatible with the digital age.
Digital media by contrast is fast, always on and interactive. The internet has from its
inception been a platform for publishing. By 1999 blogs were described as "the new Internet
craze" (Herring et al, 2007, 4) where the public could compose web content easily from their
personal computers. Presently most physical publications have websites and many of these
sites allow for public interactivity through the various technological platforms. Back issues
and archive versions are readily available on these sites in addition to comprehensive search
engine technology. Video and audio are also incorporated to give a much more dynamic
experience than traditional media, a progressive move for the print industry.
While publishers have embraced internet technology, the formats on which we consume
the content - laptops, desktop computers and smartphones - are far removed from the
ergonomics of print media. These have been described as 'lean forward' devices (Worple and
Kissing, 2010), referring to the hunched position adopted while using them. Recently, a
new tablet format of mobile device has been released to fill the gap and open a world of
opportunity for publishers of all sizes. These products offer a new interactive platform for the
public to contribute to content as well as consuming it. As 'lean back' devices (Worple and
Kissing, 2010) they provide the user with the ergonomics of traditional print media through a
technological device. The recently released Ipad from Apple is seen by many as the next step
in mobile technology and a saviour for the industry. It is designed for basic computing but
excels at the 'consumption of pre-prepared multimedia content' (Naughton, 2010) with its
large 9.7 inch touch-sensitive screen and wireless capabilities. The biggest change to arise
from tablet computing may well be a shift in control from the traditional mass media
publishers to modern small-scale digital media publishers. There are more and more outlets
for the public to publish. One example of where digital media publishing is going is Scribd.
Founded in 2007 , Scribd has almost 10 million digital documents with 2 million readers each
day (Weir, 2010). The documents are viewable online through the website and can be easily
shared through social networks. Publishers of any size can use Scribd with 80 percent of the
proceeds going back to the owner. What makes Scribd a force in the future of publishing is
the fact they are currently converting all of their content to 'HTML5', the next generation of
hypertext markup language that is used to create web pages. HTML5 web pages, with video,
audio and text rich content, can be displayed without any 3rd party plugins meaning more
universal coverage and increased ease of use. The appearance of similar devices with
competing operating systems is likely to add to existing compatibility issues faced by such
devices, Apple Ipad's inability to run the Flash plugin is an example. Scribed is likely to
become a leading player in publishing for both public and established media by future-
proofing their system and eliminating compatibility issues. The future potential of digital
publishing is reliant on a willingness of existing publishers to embrace technology and
respect consumers as they are a growing force in the industry.

For all the positives of digital media, the mobility, fast upload and download and multi
platform connectivity, these very aspects are paradoxically proving challenging, particularly
for the Entertainment. The very fact a vast amount of content produced today is ‘digital’ and
much of it is hosted on the Internet means it is indefinitely reproducible and not confined
geographically, therefore the system is readily corruptible (Rayburn and Hoch,
2005). Widespread pirating of digital content and intellectual property goes hand in hand with
publishing on the web. Traditional copyright laws haven’t been able to keep track with the
rapid progression of digital media in recent years (LaMonica, 2003). The monetisation of
content is a real concern for the producers of digital media and one that needs to be addressed
before all producers can benefit.
A potential answer to the monetisation of digital media may lie in standardised frameworks
like the Digital Entertainment Content Ecosystem (DECE) that is due to be launched in the
near future (Edwards, 2008). This system relies on a “Buy Once, Play Anywhere” ideology.
Digital content producers agree to a common file format and pool their content together. An
authentication service manages the consumer's access to the media. This cloud-based library
is known as a "rights locker". Founding companies include the biggest technology and media
producers in the world including Sony, Microsoft, the RIAA and Fox Entertainment
(Jesdanun, no date). Any business who wants their digital content distributed via the DECE
system will need to comply to the guidelines and display appropriate branding. However,
previous attempts at managing digital rights over various platforms has failed to take off.
Technology giants Microsoft and Intel, both founding members of the DECE, have
experimented with digital rights management systems before, the former with 'Play For Sure'
and the later with Viiv. Both were poorly received and no longer feature predominantly in
either company's future plans (Edwards, 2008). Digital media content publishers have also
experimented with digital rights management. Sony BMG has recently ceased copyright
protection on it's content available on the internet (Holahan, 2008). The apparent desire of
the largest names in traditional media and technology to cooperate and collude in providing a
flexible and profitable solution may well be the defining factor in the success of DECE and
consequently for all future content providers.

However great the impact new mobile devices and content management will have on the
digital media landscape, all would cease to function without connection to the internet. The
25 year old Sun Micro System slogan "the network is the computer" has never been so
relevant. Current broadband, 3G and WiMAX coverage enables near universal internet access
in most of the Western world. The always-on nature of mobile devices and the increasing
reliance on the network will see ‘Cloud Computing’ becoming an integral part of how we
create and consume digital media in the coming decades (du Pre Gauntt, 2010). Cloud
computing refers to the sharing of computing resources online. Much like the way 19th
century onsite power generators were abandoned in favour of the electric grid, the act of
computing itself will become a piped-in commodity reducing the reliance on personal
hardware (Arthur 2010). This will offer industry unprecedented levels of efficiency and
productivity in the future as introduction of the electric grid had in the past.
Despite still being in it's infancy, cloud computing currently offers a number of key
advantages for business. One example is the Software-as-a-Service (SaaS) model of where
applications are hosted online. Du Pre Gauntt (2010) uses a 'private club' metaphor when
describing the SaaS model. The club member has a membership card describing who they are
and the services available to them. It also tells the club where to find the member's table and
how it should be arranged. The club member can enjoy their particular privileges by just
showing their card at the entrance. In an SaaS model the service provider is the club,
responsible for the architecture necessary for the service to function and the customer as the
club member only uses the service features they need. This makes the SaaS model a very
efficient option for forward looking business.
The act of creating these web applications is increasingly evolving into a cloud-based
activity. Google App Engine for example now offers developers the opportunity to build
applications using Google's architecture. A developer can benefit by quickly and cheaply
developing web applications without hardware and system backups being a concern. This
offers a wealth of opportunity for the next generation of web application producers. Even in
areas of the economy where spending cuts are ubiquitous at the moment, there are very
encouraging prospects for the web application industry. The British government, for example,
hopes to save £3.2 billion on it's IT budget by implementing a cloud based IT strategy. This
would include an application store providing tools for the various government departments
(Kiss, 2010). Reduced overheads will be a driving factor for future industry turning to the
cloud.
Browser-based web applications are becoming more sophisticated and viable alternatives
to commercial software. From simple calculation tools like unit converters and calculators,
used primarily for casual web use, to multifunction interconnected programs. Web
applications are proving to be powerful tools in the creation of digital content. In the world of
public content creation, these tools are enabling the amateurs and professionals alike to
produce, edit and convert content to digital media efficiently, online and with little or no
expense. While currently not powerful enough to trouble established software brands like
Adobe and Microsoft, web applications will become a viable option for business' content
production in the years to come. An example of a web-based application's growing presence
in business circles is Google Docs, a free online office suite. Google docs offers all of the
functionality of Microsoft's Office while being entirely web-based and free to Google
account holders. It's popularity is gaining momentum within business with a recent IDC
survey showing that it is "widely used" in 1 out of 5 companies in the US (Thibodeau,
2009). Web applications are not only limited to low powered office tools. Video, image and
audio editing web applications are available at little or no cost. Applications like Jaycut,
Splashup and Aviary offer the full spectrum of multimedia content production and editing on
a web-based platform. Aviary even has an entire suite of multimedia tools that available free
through an internet browser. Producing web-based content with web-based tools will have
obvious advantages for business in the coming years. The content will have instant social
connectivity with consumers or clients through integrated social networks. Furthermore
overheads will be lowered due to efficient pay-as-you go structures and less software
investment.
On the consumer end, cloud based SaaS models will give the public an ever increasing
level of social interactivity through the various platforms and integration with other models.
An example of this in action can be seen through Playfish products. Playfish produce games
that are tied in with social networking sites and rely on in-game competition between friends
as a key function, currently attracting 9 million users daily. Because it is cloud-based,
Playfish accommodate the various platforms and a single session of a game can be continued
on another platform, much like the way a web based email can be saved on one device and
completed on another. This shift in the format of computer games, from a product to a cloud-
based service is an example of the changing face of the media we consume. This shift has not
gone unnoticed. After just 2 years in business and with a handful of titles, EA Games
bought Playfish for $300 million in November 2009, an example of how traditional industry
are showing interest in web based systems

The plethora of online tools available to the public is fuelling the digital media
ecosystem. A recent development for businesses sees them turning to the public for what De
Wolfe (2007) calls the "savvy of the masses". This has come to be known as 'crowdsourcing'.
Businesses currently use crowdsourcing by collaborating with both amateurs and
professionals to create content or solve problems through social networking platforms. There
are often several stages in the crowdsourcing process. Firstly the company proposes a
problem or requests a product. Entries are then submitted and the company then vets the
entries and rewards the content producer or problem solver thus owning the content or
solution. While there is usually a cash incentive this is not always the case. Crowdsourcing
has proven to be a considerably cheaper and often faster solution for businesses compared to
conventional in-house staff or outsourced professionals (Brandel 2007). Companies from
Dell to music festivals like the Electric Picnic have embraced crowdsourcing, the former with
it's 'Ideastorm' forum and the later with a poster design competition. The diversely skilled and
well equipped public is proving to be an increasingly valuable resource that will be realised
in the coming years.
To understand the effect crowdsourcing will have on future business, we must examine the
digital activities and habits of our youth, the future workforce and entrepreneurs. The youth
of today lives in a world saturated with technology. Today, many teenagers may not
remember a time before mobile phones and laptops with internet connections. A constant
stream of always-on digital media instant messages, blogs, texts, social networks and on-line
games are a part of their every day lives. Traditional tools and resources are ignored and
replaced with online applications. Such a technologically adept generation have been dubbed
"digital natives" (Prensky, 2001) because of their fluency in the digital language. The digital
native is distinguished from the 'digital immigrant' by the intrinsic role technology and digital
media plays in their lifestyle. Where a digital immigrant will display many analogue habits,
printing out an email to edit it for instance, the digital native has no such "accent", preferring
edit it on-screen (Prensky, 2001). The most striking difference between the two is digital
native's readiness to contribute to the digital media landscape in which they dwell, to be
"prosumers" as well as consumers (Tapscott, 2009, p11). They contribute to digital media
with the same enthusiasm as the previous generations consumed traditional media.
The current generation of teenagers will be part of the workforce in a decades time so how
do corporations and businesses capitalise on their proactive approach to digital media
consumption and production? Howe (2008) describes how one computer game company
has utilised user generated content (UGC) with great success. Valve released a game called
Half Life in 1998, a first person shooter game that was playable online. They also released
editing software with the game to enable some customisation. However, some enterprising
student programmers used the editing software to create an entirely new game, Counter-
Strike. This became an instant worldwide success, unprecedented for a 'modded' game. Howe
remarks that instead of sending solicitor's letters to the programmers, Valve embraced the
new game. The student programmers were asked to collaborate on producing to a licensed
version of the game known as Counter-Strike and by 2003 it became the most popular multi
player game on the internet. This is a vastly different stance than that taken by the record
companies today who see their profits decline as they take a hard-line on copyright
infringement. Croudsourcing succeeds through intrinsic rather than extrinsic
motivations (Howe 2009). Extrinsic motivations include monetary rewards and pressure from
superiors in a company. Intrinsic motivations on the other hand refer to more personal
fulfillments such as creativeness, community and reputation. It can be deduced that this
particular method of capitolising on the digital native through crowdsourcing is both more
fulfilling for the creator and productive for business.

Despite the benefits of crowdsourcing and cloud computing, harnessing the creative
capabilities of the next generation in a collaborative manner may not be an easy process for
industry. The always-on nature of the internet and mobile technology makes it easy to acquire
the relevant information instantly anywhere and at anytime. Thompson (2007) describes how
we have "outsourced important peripheral brain functions to the silicon around us". The
instant recall of data clearly isn't a negative attribute of the digital age for either producers or
consumers. However, reliance on technology for the instant attainment of information has
lead many to believe that the brains of the upcoming generation will work differently to the
current generation. Furthermore, the incremental blurring of the lines between producer and
consumer will call for a radical shift in our business structures.
Studies into the effect digital media has on our brain function have shown heavy web user's
brains act differently to those who are new to the internet. One particular study involved
scanning experienced and non-experienced web users as they searched for information on the
internet. It showed the experienced user's brain activity was much more expansive,
particularly in the problem-solving and decision making part of the brain compared to the
novice user (Carr, 2010). In addition to this, the novices were tested six days later after
searching the internet for an hour a day. The new tests showed a dramatic shift in their brain
function to resemble the experienced web users. This would suggest that extensive web use
and interaction with digital media not only creates a seemingly higher functioning individual,
the rate of this change in the human brain is rapid. It is not the first time new technology has
changed the way our minds function. Carr (2008) points out how the use of mechanical
timekeeping devices as a previous example of how technology can fundamentally change the
way we live and think.
From the outside the next generation of ostensibly high functioning, digitally fluent Beings
seems like good news for business, as a potential workforce and consumer group. Despite
this, the near infinite vault of information that makes up the internet and the way we interact
with it is having a detrimental impact on our thinking. Carr (2008) summarises current
scientific thinking on this matter, describing the digital landscape as 'an environment that
promotes cursory reading, hurried and distracted thinking, and superficial learning. He
describes how further studies on digital media multi-taskers show that they are easily
distracted and have poor memory and concentration compared to light users. Considering the
next generation workforce and consumers will be ever more dependent on digital tools, be
they cloudsourced web applications or social networking, industry must accommodate for the
new way of thinking.
Another consideration for industry is the changing shape of how we do business in the
digital age. Industrialisation spawned the corporations and busness models we know today, as
well as the lifestyles subsequently adopted by the workforce, the long commute home to the
suburbs after work for example. In the workplace there was the top-down, one-way
communication from the corporate hierarchy. Howe (2008) describes these types of business
structures as 'artifacts of an earlier age when information was scarce and all decisions, for the
sake of efficiency, trickled down from on high'. This leads to a fragmented society and
workforce at odds with the natural social fabric and the sense of community. However the
digital revolution has changed this cycle. Information is now abundant
and decentralised thanks to the internet. Suburbs and long commutes are still a reality for
many but meaningful communities have developed once more, this time online. These
communities police themselves, reward participation by increasing reputation and work
together in an intrinsic manner, all in their spare time and for no monetary gain. In the digital
age where information is king, the content these comunities create is a colossal free resource
and the members make up a substantial talent pool that industry is only beginning to tap into.
Youtube is an example of a business model where the community create all of the content.
As a actual company, Youtube is small by most standards with under 70 employees. By web
standards it is massive with 100 million video views a day. At the time they were acquired by
Google, Youtube was valued at $1.65 billion dollars. What Google bought wasn't the
personnel or the office but the community who in under 2 years turned an internet startup into
a billion dollar corporation. Howe (2008, page 109) remarks on the contrasts between
traditional systems of content creation and the modern community crowdsourced equivalent
coming to the conclusion that "the community is taking the place of the corporation".
An example of how the community itself can be used effectively as a resource can be seen
in action at the Topcoder site. This is a community of a quarter of a million code writers who
compete to write code on prestigious projects for companies like AOL. To use the
community effectively to complete a particular job, each project is broken down into small
parts, the coders compete on each section and the winner is awarded a cash prize. Even the
quality control is outsourced to the community. The large body of like-minded, creative
individuals, together with the motivational qualities of competition results in a highly
efficient system with a defect rate well below the industry average and timelines halved
(Howe 2008). From the automatic self-policing policies to the natural camaraderie and from
the productive competitiveness to the staggering efficiency, business will gain a great deal
from looking at the digital community. Crowdsourcing, online tools and most importantly
online networking have fundamentally altered the top-down business model we have grown
accustomed to since the industrial revolution. The future workplace will benefit more and
more from the online community and it's many advantages.

Industry's application of digital media and technology is ever-changing and complex and it
will undoubtedly play an increasingly larger role in developing relationships with the
consumer. As the consumer's production of digital content continues to evolve and
expand, the line between consumer and producer has blurred considerably. Industry must
react to capitalise on the resulting resource of free content and creativity. From personal
blogs and product reviews on shopping sites to crowdsourcing talent, user generated content
(UGC) is changing the digital playing field. Industry must respect the intrinsic nature of these
communities. These skilled, networked groups should not be seen as a destructive force but
as an invaluable talent pool from which to draw.
 Business can draw inspiration from the public's use of cloud-based tools. The once passive
consumers have turned into a powerful economic force in their own right with the use of web
applications and social networking websites. Time still equates to money in the 21st century
and the instantaneous movement of information these systems provide is of benefit to
companies of all sizes whether they are producing commodities or interacting with
consumers.
Traditional ways of doing business will become increasingly more incompatible with the
digital age.
In order for industry to utilise digital media effectively in all its forms, it must establish a
more cooperative relationship with the public. Only then can a long-lasting and sustainable
ecosystem flourish.

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