Download - Tech inDIGESTion #002

A Fresh Look at What’sHappening in the High-Tech

and Social Media World

by Patricio O’Gorman | @patoguru

# 002 | February 2011

Social Media existed way before

Facebook popularized the term. In fact, way even MySpace or even AOL or Yahoo.Social media, according to Wikipedia, “are media for social interaction, using highlyaccessible and scalable communication techniques. Social media is the use of web-based and mobile technologies to turn communication into interactive dialogue”.Bearing that in mind, then, where there is no communication with someone else, we arenot in the presence of social media, properly speaking.

The intent in these next couple of pages is to understand the distinction between socialmedia and traditional media, embodied in TV and Cinemas (not exhaustive but perfectfit for the comparison). The widespread idea is that TV is dying (just like print media,which is still quite alive and kicking) might be a little bit premature, due to the simplefact that it provides something very different than what social media provide. I will nottry to hide the evidence that traditional media are in crisis and undergoing majortransformations – ever since Shawn Fanning turned on Napster, the impact of socialmedia on incumbent technologies will never be underestimated again.

The main arguments against traditional media are: the decline in physical sales (musicbeing the clearest example, with regards to TV, the first decline ever in cable/ SAT TVsubscribers in the US* can only speak of change; and also the fact that our attention islimited and therefore, obvious as it may seem, paying attention to one form of medianecessarily takes away from another. These alone forebode trying times ahead for alltraditional industries – print, tv, cable, movie theaters, music – but give no clear hint asto what and how they will be reinterpreted in this networked digital environments.

Early adopters point to current social media (Facebook being #1) and technologicalcompanies (with Apple at the helm) stars as the destroyers of traditional media. Thetruth is, to use dot com terms, they are just desintermediating and reintermediatingindustries. They are not bringing about change, they are enablers of change. In thecase of Apple, one can argue that they are interpreting change, since some of themarket innovations seem to have redefined at least partially the competitive landscapes(with iPad as the best example). Being social, however, is no guarantee of success.Quite clearly, anti-social media will be slowly left behind, but there is no clearcompelling evidence that social media will triumph – until they bring about the broad-reaching engagement that all revolutionary media have had …

* Silicon Alley Insider, Pay TV subscribers in the US fell for the first time ever in Q2 2010.

Technology InDIGESTion @patoguru #001 | January 2011

Technology InDIGESTion @patoguru #002 | February 2011

ENTERTAINMENT ENGAGEMENT

SOURCES1 Google Answers from 2006, based on WSJ and BusinessWeek.2 Cinemagoers worldwide: Info only available for US (1.5 Bn). World estimates 2x US.3 Facebook.com, 500 million members as of July 2010.4 Online video: Youtube, 100M, Hulu, 25M, rest: 50M aprox.5 Videogames estimates: 150M PS2, 100M Wii, 40M XBOX360, 40M PS3, 100M handheld, 70M others.6 Twitter users reached 150M towards mid-2010, according to Fox.7 Royal Pingdom, 2009 info of 1.4 Bn, adjusted for 2010.8 World Factbook 2007 5 Bn, adjusted to 6Bn for growth during last 3 years.

BROAD-CAST

NARROW-CAST

TV2 Bn 1

Cinema3 Bn 2

FB0.5 Bn 3

Twitter0.1 Bn 6

mobile phones6 Bn 8

Video0.2 Bn 4

Vgames0.5 Bn 5

[email protected] Bn 7

TRADITIONAL MEDIA

SOCIAL MEDIA

?


Some time ago, successful media got

away with extremely little; basically just broadcasting their signals (TV, radio, cable).This was, of course, before the internet became mainstream. I remember watchingVHS tapes and could not care less about calling all my friends to comment this or that.There was some “water cooler” conversation the day after but that was that.Nowadays, the new cool is sharing. P2P made us realize that the world was a click away– and instant messengers, along with the rise of broadband technologies, made usaware that there were others out there and that they too wanted to share stuff.Sometimes, any stuff. Anything. Therein lies the social media paradox.

Even though the sites are as popular as ever, with a USD 50 Bn valuation for Facebookand astronomical figures for Twitter, social media is not a fitting replacement fortraditional media. True, it provides far more engagement than, say, TV, but lacks thebroadcast value – except for the Ashton Kutchers of this world with millions offollowers. So the question become – can any of the upstarts provide both broad-reaching entertainment and engagement? If not then Chris Anderson’s long tail theorymight well be spread to the long tail of narrowcasting – and instead of 100 TV channelsthe world will be filled with millions of personalized channels narrowcasting to a fewhundred Facebook or Twitter contacts – who just might be paying attention at the time.

The challenges are enormous, both for the upstarts to establish themselves and for theincumbents to protect their hard-earned ground. Upstarts have nothing to lose,incumbents everything to lose. Users seem to be stuck in the middle, not knowing whoto trust or where to flee when they become intoxicated with digital communications.Virtually, youngsters are as popular as rock stars, yet at the end of the day some may bevery lonely, even more than before the advent of these world-changing technologies.

So , what is social and what works? Difficult to say. Social media are in its teens and farfrom maturity – what seems to be true is that none of the available options seem tohave become engaging and massively entertaining. Facebook is the contender movingat faster speeds towards that goal, yet still seems a world away, awash its constantprivacy policy changes and its business model that, albeit quite vague, starts providingsome decent cash-flows to the owners. Will it be able to maintain this young andrebellious spirit as it too becomes a corporation in the coming years? That remains tobe seen. What is true, though, is that previous industry leaders have lost their mojo(pardon the Austin Powers joke) as they have transformed themselves into vastempires. IBM, Microsoft and Google are but three examples of once-thought leadersthat have faced serious difficulties when entering their corporate adulthood.



Concluding is becoming harder each issue, so

let me give it a shot here: social media is different from traditional media because itseems more engaging. However, there seems to be a trade-off between engagementand reach, since the more engaging media are one-on-one or narrowcasting to a fewhundred friends, followers or contacts. Nothing like the mainstream approach of TVand movies.

So, are social media worthless? Not at all, in fact, quite the contrary. What seems to bethe case, though, is that they have marked more of a transition into a great unknownmore than an ideal end-state. In other words, the Facebook and the twitters might bea prelude to something else, more encompassing and integrated with traditionalmedia. For the time being, every company seems too interested in creating their ownlittle walled garden before being an integrator – but these are beginning to appear.You can now use MSN to chat with FB friends, and use many sites being “signed in”. FBwants to be ubiquitous, to merge with more traditional media until it blends in. Associal media become more addictive, single-sign-in technologies provide a move in theright direction.

Videogames are by definition engaging, and online gaming platforms that much more.They have managed to merge a world of playing (naturally engaging) with the world ofsharing, thus becoming a bastard child of social media. As players start integratingtheir value chain offers, gaming companies provide interesting venues in the rightdirection. Will we live to see a social media as engaging as email, yet as far reaching asTV? Is it even possible? 25 years ago, it seemed impossible to be able to writesomething to someone overseas and have it reach them in less than 2 weeks, and lookwhere we are now …

I look forward to hearing your comments at [email protected] continue this conversation; or, we can also pick up via twitter @patoguru.Meanwhile, I hope this has helped you partially digest this wonderful world oftechnology or, at least, given you some food for thought.

Next Issue: A look at the technology giants: how they do business and how integrated are they, really … or are they not?


mailto:[email protected]



