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Evolution in Digital Media

Fri, 6 May 2011|



Good morning. So actually, in a video is one piece I'm going to talk about. First I'm going to before everyone else talks, I'm going to talk a little bit, just give a broad overview sort of internet trends of technology and trends and consumer behavior that I think will set everything in context so that then my colleagues here will talk more about specific pieces of the overall internet landscape... Visual media landscape. So as, Ted mentioned we have, assembled our, a team here. We have, Nyeen Janini. He's our director of corporates sales solutions. And Mark Heinberg. Hes director of, research and development. As well as Michael Kierkoff, our director of SEO. So we have an agenda of a number of things to cover. First I'm going to talk about the evolution of digital media technology and then dig in a little bit into online video to end it off here. So digital media technology has been changing rapidly, what you want to call the evolution or revolution over the last 5 to 10 years have. Technology has con, continued to accelerate in terms of the pace of change. It's becoming increasingly hard to keep up with, which, which is one of the reasons that we're having this discussion. So, specifically, I'm gonna cover a couple of pieces here. One, talking about changes in consumption of media among among users, especially in the United States. Technology and trends in general. A couple of new marketing vehicles, that kind of not really a reference to the flying car there, but you know, it's a little pun, all right. And then talk a little bit about online video. This is, for me, we talked about changes in media consumption habits. This is a really striking graph, that shows essentially the, ...The destruction of an industry here, in this case the music industry. You can see peaking there in about 2001 in terms of sales, about 15 billion in sales, mostly in CD's. And then, we get Napster in about 99, 2000. So essentially we have peer to peer networking and broadband connections coming out... Which then as you can see drives sales and cut them over the last ten years, about in half based on, you know, essentially technology crushing the old business model. [SOUND] For me this is one of the most striking charts that I've seen in a long time. It covers a very long period there from about 1900 to. Current day and actually, projects out the next ten years is from a consulting group called carrot, this is a chart that shows the number of hours per week that Americans spend consuming media and all the way down the far left and around 1900 and there they actually have studies that they source this from it's not just guesses. the, American's on average spend about ten hours a week, so roughly a little more than an hour a day, consuming media, typically newspapers and books. If you move almost all the way to the right, you can see where around present day, people are spending about 70 plus hours a week consuming media. So and really the consumption of print has gone down some but its certainly not gone away. But all the new media types have added up and the biggest boost you can see sort of in these sort blue green area has been tv. And then very recently the last about 15 years going from almost nothing to now. What will be 15 to 20 hours a week will be internet consumption. So you can see the vast change that's occurred, where people are now consuming, what, this is more than 10 hours a day by 2020 of media every single day. So at work and at home people are always on. This sort of just summarizes it but adds a few pieces here, so not only are people consuming way more media than they ever have, they are also consuming it in different ways, in ways they want to, so the word has been termed like play shifting and time shifting and device shifting. Basically I mean people are connecting. Wherever they are, however they want, whenever they want. I know I personally, I can't remember the last time I watched a TV show live. The commercials just drive you nuts. I record them. And even if they start, I'll go do something else and wait 15 minutes until I can start fast forwarding past the commercials. And increasingly, people are consuming via the Internet. I know the cable companies are seeing a big risk now. That their business could go away as more and more user shift to online video. Another big changes, people aren't just so called leaning back anymore. It's not just leaning back in a reading, what what's presenting to their interacting. So, that's why, you know, we talk about whether it's comments. Or, ya know, or various social networks, or whatever device you want to talk about. People are contributing, and blogging, and uploading their own videos, and that sort of thing. But, as well as consuming video, at the same time, or consuming content at the same time. People are also using more, and more sources. There's a staff years ago when I started working internet about 1998. That that the average person had I think 12 websites that they visited really on a regular basis. There were sort of a max. That number, a recent report I saw was, was up to lower 20's. So that's that still doesn't seem like that many. But I think if you look at your own behavior you can see you probably have a handful of sites you visit. And so we're really essentially even though people are going to more and more sources for more and more types of information. And they're also demonstrating a very marked preference for video, which I'll show here in a minute. This is also one last comment, which actually Michael will cover here more, about social media. In a minute but when we say people are using social networks that makes it sound like that, you know, there on there with the other million people on Facebook and connecting to all of them. When in reality people are creating their own networks. So when you think about social media it's really how people are going to these various networks and then creating their own network out of what's there. [BLANK_AUDIO] So this chart points out a few key changes over just the last ten years. And I'll just hit a couple of them, but in 2000 about 5% of American's had broadband at home now we're at 65% so about 2/3. Which is a tremendous change. [COUGH] zero percent used to connect to Internet wirelessly. Now about, about 60%. Nobody used social, you know social technologies, social networks, in 2000 because they didn't exist. Now about half of all Americans use them. So this sort of summarizes as in 2000, we had slow stationary connections built around a computer typically sitting on a desktop or under your desktop. Where as then now, the typically behavior is, using fast mobile connections to content and to that is out somewhere on outside servers. You probably can't read this, but this is just to make a point regarding the pace of technological change. And this is from a consulting group called gardener. They actually have and maintain about 75 or so charts of this type simultaneously. This is just one of their, they call the technology hypercycle. But it's essentially, the the lifecycle technology coming from just a grand idea to actually being usable. And they track about 1800 different specific technologies. So, this is one chart covering about, I don't know, about 50 of them. And you have everything from here on the right, which are becoming real technologies these days, speech recognition. electronic paper etcetera, things that are way on the left that are things like computer brain interfaces and human augmentation, which are grand ideas and they are actually getting a lot of press in some area these days, but probably arent going to really impact us, significantly for a while, that is ten years or 5 years. But the point here being that this is one of 75 different areas, so you imagine just a volume of technological change that is coming our way over the next few years. And this is a chart that covers about you know, as much as over five to ten year in timeframe. So, specifically, some of these major changes, I'm just going to highlight a couple of them. To think about for your business mobile computing, which I know everybody is obviously aware of but, you know, if you're hopefully taking advantage of things like iPads and Blackberries in your sales force, for example, these are things that can really impact your business. Just imagine one of your sales reps carrying around an iPad, doing the live demos. You know, virtual work presentations, your products, that sort of thing can be very impactful. Some people are already doing those things, but those are things that really can take technology that really works and move it quickly into into business. Social networking, I know we have Michael, spends a lot time working on soc, social networking. He'll cover that, but social networking can really have an impact on your business. We drive a lot of traffic off our social network. Plans and usage, and we're going to do a lot more in that area. One point, this think we're calling web services here. I know something, one strategy that we use is, we don't, we don't do as much buying and or building software and putting it on our own servers as we used to. We do a lot of partnering, via web services. So that's one thing you can think about, whether, you know, you can call software the service or trying into other people's functionalities via web services. If you look at one of our web sites, it's actually, you know, the foundation is ours, but, depending on where you're at there's at least ten different vendors we use that supply different things on what various websites that we have. That's something that I know, if you're involved in technology, make sure you're thinking about do we really need to buy this, or is this something we can actually pull in via web service from somebody else. Online video I'll cover here in just a moment. I won't get into all these other things in depth. There's semantic web, though, is one thing that you may or may not have heard of, that's making the web a lot more useful. This is where like, for instance, we have all of our content, and by tagging it means we run it, we have humans, so editors who write it and put tags on it saying what it's about. And say we also think it's about these things, it's about, you know, it's about fire rescue, and it's about, even, you know, it might be about a given company. So we'll tag it, but. Then our functionalities let us use that content then in many different ways based on we wanna now show all articles that mention President Obama or, whatever, a given, like the Japanese disaster or whatever. So, this is something to keep in mind when you're creating content for your own websites is, to try and do tagging or look at technologies that allow you to tag. I'll skip some of these others. [COUGH] so we talked about new marketing vehicles, and this is some things we actually have available now is [UNKNOWN]. I don't know if anybody in here is doing any advertising via any mobile apps? No? Something we currently have, we have for, like for instance, fire engineering, we have both an iPhone, and iPad app. We also are developing mobile friendly sites, that'll be out in a, in a few months. So, you know, we're taking a multifaceted approach, we're not doing one or the other. You know, we're trying to say, however somebody wants to come to one of our website's, we're gonna offer them. The website that works well for them. So we're going to detect when they come in, and we're going to say okay if you're a normal user on a PC, you'll get the regular site. If you're not a normal user, if you're a user on a smartphone, we'll give you a smartphone optimized site. If you're a tablet user, we'll probably give you a tablet optimized site. That makes sure that that experience is exactly the best we can offer. And also along with that there are advertising opportunities that are specific to those groups. Then we're also doing apps, because a lot of benefit. You can put more functionality in apps than you can initially deliver over the web. So we're also delivering, offering you know device specific apps which Mark will go into here in a little bit. We're also offering rich media ads and I know we're seeing a lot more of our customers starting to do things like video ads, you know, some, more than just a basic animated ad. Something that we support. In many cases you just have to ask us and we'll, you know, see what we can do. There's also some things that. On the horizon, we don't have quite yet, but things you certainly could take advantage of, like daily deals or groupons, which are, which can be in the right circumstances, very effective. Maybe, maybe not, in the fire market. I'm not sure. I don't know if anybody's gonna go for a daily deal on a fire truck. But, you know, it depends on what you sell. If you sell t-shirts, it probably could work. Talk a little bit about online video here. This is a graph from Wired magazine. The title of that issue last year was The Web is Dead which is a little extreme for a viewpoint. So just to explain what this this chart is, it's a stacked chart showing at the bottom in red there worldwide web traffic or essentially web page traffic. ...And you can see it peaked in about 2000 as a percentage of overall bandwidth use on the internet and has gone down dramatically. Now in reality, the actual amount of web pages served and bandwidth served has gone up dramatically. It just has gone down in comparison what is now dominating bandwidth and is now more than 50 percent, and this has changed in the last few months even... Online video has gone in about ten years from essentially being almost, you know, being negligible to being more than 50% of bandwidth use on the internet. So the point of this chart is essentially video, in peer to peer to some, like a, services like, former Napster now things like Bit Torrent, really consume most traffic. On the web. Some points about online video. You know, you hear occasionally people think that online video is all about going to YouTube and watching videos, you know, like cats playing pianos. You know, various cute videos. And that is the number 1 usage. However, if you get to two and three, news videos and educational videos... Are really heavily consumed now. And when you look at the stats now about half of all adults watch videos online. So, it's really relevant for all of our markets. This is a stat that really blew me away when I first saw it. And, actually, I just saw a new study yesterday and didn't have time to update. Here. We'll just go with this study that came out the middle of last year, showing that 44% of American news consumers get news from Internet video. And that's more than any other source, including newspapers and radios, except for TV. The Pew Internet, who was the source of the study, it's a non-profit group, actually came out with a study just in the last couple of days, saying. It's now internet use, internet consumption of news has now surpassed TV. So I haven't had the chance to update this but that's a really amazing stat. So that's my my little overview. I'm gonna pass on to [UNKNOWN] now.

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