Future of Media Summit – speaker changes and additions

We’ve had a number of recent changes and additions to the speaker line-up at Future of Media Summit in both Sydney and San Francisco. A number of urgent board meetings and international trips have taken several people off the list, while some fantastic additonal talent has come on board. While it’s a pity some of the original speakers cannot participate, the quality of the new speakers we have on board overall results in an even stronger cast for the event, which is very pleasing.

Originally announced speakers who cannot attend:
Michael Birch, CEO, Bebo
Stephen Conroy, Shadow Minister for Communications (Sydney only)
Wendy Hogan, CEO, CNET Networks Australia (Sydney only)
Ian Smith, CEO, Yahoo!7

New speakers:
Rob Antulov, CEO, 3eep
Dan Fill, Head of Multiplatform Production, ABC TV (Sydney only)
Chris Gilbey, CEO and Co-Founder, Vquence
Cindy Gordon, CEO, Helix Commerce International (San Francisco only)
Kathryn Hamilton, Head of Entertainment and Lifestyle, Yahoo!7
John Jainshigg, Director, Online Technology and New Business, CMP Technology, LLC, CMP World2World (San Francisco only)
Freddy Mini, COO, Netvibes
Scott-Bradley Pearce, Strategic Adviser Content Syndication and Multimedia, CNET Networks Australia (Sydney only)
Mark Pesce, Director, FutureSt (Sydney only)
Keith Teare, CEO and Founder, edgeio

Key elements of media business models

In the lead-up to the Future of Media Summit 2007 held in Sydney and San Francisco next week, we will feature some excerpts from the Future of Media Report 2007, recently released to accompany the event.

In this post we will cover the Key Elements of Media Business Models frameworks which are the centerpiece of the Report. The centerfold image and commentary on each of the four elements of the framework is below – click on any of the images below to get the Report with full details.

Below are the frameworks and commentary for the four elements of the media business model framework:
* SCALING OF BUSINESS MODELS
* VALUE IN CONTENT PRODUCTION AND DISTRIBUTION
* DRIVERS OF VALUE OF ADVERTISING
* MEDIA PERSONALIZATION

SCALING OF BUSINESS MODELS
The emergence of the long tail has created a complete spectrum of media of different scales, from the mass media at the “head” of the curve, through mid-sized professional publishing at the “shoulder”, and on to an extended “tail” of micro-media outlets, each with small audiences. Media have significantly different characteristics along the curve, leading to a variety of business models and approaches to scaling businesses. Characteristics that differ include:

Audience focus. Mass media only accesses broad audiences, whereas further down the tail highly selective niche audiences, by geography or interest, can be garnered.
Advertising models. At different levels of scale, dedicated, aggregated, or combined advertising sales models are appropriate. Associated with these models are different shares of total advertising revenue.
Cost of content creation. Mass media is associated with high production values, which means content creation remains expensive. Production costs are rapidly reducing, but the premium placed on creative talent means that costs will remain high. However production costs for most other forms of content has become very low. This is primarily associated with labor rather than technology costs, which can be low due to lifestyle advantages for content creators.

What underpins this framework is that there is no right or wrong place to be on the curve, simply that advertising or other revenue models and content creation mechanisms need to be aligned with the audience. As the other frameworks show, attracting niche audiences can result in stronger revenue relative to costs. A “multi-niche” model which is effectively monetized can be more effective than traditional mass media approaches, by allowing sharing of overheads and sales efforts across media properties, and gaining more value from highly targeted audiences. Scaling costs and overheads and extracting premium revenue is as viable a strategy as increasing audience size.

VALUE IN CONTENT PRODUCTION AND DISTRIBUTION
Digital channels have resulted in a dramatic fall in the cost of content distribution. This means that content creators (such as film producers, writers, or researchers) can readily distribute their content directly to their audience, if they so choose. There is substantial incremental value to content producers in direct distribution, including control over content, building end-user relationships, and not having to share revenue. As user-generated content grows as a factor, a significant issue is the ability to have users engage directly in the content creation process.

However there remains real value in the distribution process. Distributors such as broadcasters, publishers, and agents will continue to play an important role in the media landscape, as long as they can effectively establish and build distinctive value-add, including brand, aggregation, scalable infrastructure, and the ability to attract desirable audiences.

The landscape of value creation in content production and distribution will continue to evolve, leading to ongoing strategic choices for content producers and distributors in the partners they choose to work with.

DRIVERS OF VALUE OF ADVERTISING
There will always be a role for paid content, through subscriptions, pay-per-view, and other mechanisms. However the broad trend is that content creation is increasingly supported by advertising. This is becoming more viable as differentiation emerges in the value and pricing of advertising. Advertising in mass media is priced largely by audience size. There are four additional key drivers of the value of advertising. As the ability to refine these drivers increases, substantial revenues will become possible, even from relatively small audiences.
Key drivers of the value of advertising are:
Advertising outcome: The original concept of advertising was exposing an audience to messages. However advertising can now be linked directly to the audience taking action through expressing interest or making buying decisions.
Access target demographic: Accessing generic demographics that are highly desirable such as CEOs increases value for most advertisers. However some advertisers are looking to access very specific profiles. As it becomes possible to target these niches, advertising value increases.
Point of insertion: Advertising used to be inserted solely in distribution channels: for example in newspapers or between TV programs. A multiplicity of new approaches to inserting advertising are emerging, including on the end-user device such as the mobile phone, or inside content itself, as in for example product placement or “advergames”.
Personalization: Personalization is one of the strongest drivers of advertising value. This is covered in more detail in the Media Personalization framework.

MEDIA PERSONALIZATION
Personalization is a large part of the future of media. Yet to enable personalization of content and advertising, there are multiple requirements including compiling data about audience members, and content serving platforms that allow content and ads to be altered on the fly depending on the viewer. There are four levels to personalization of content and advertising, each of which leads to increased value.
Nil. Most content and advertising is not personalized. It is not currently possible to personalize content on mass distribution channels such as broadcast television and newspapers.
Content. Personalization is possible by being associated with audience-specific content. Trade magazines or targeted cable TV channels, for example, attract particular audiences, effectively enabling personalized advertising.
Demographic. Advertising and content can be personalized for a particular demographic, such as gender, age, or location. This requires being able to match viewers with a profile, which can be generated for example by cookies or Internet Protocol address.
Individual. Personalization for the individual requires both audience profiles, possibly generated through a registration process, and the ability to identify audience members individually. Online and mobile content delivery or interactive TV are channels that enable individual personalization. Yahoo!’s recently launched SmartAds initiative is primarily about individual-level personalization.

It is important to note that, even if the distribution channel being used enables higher levels of personalization, there are a range of other requirements for personalization. These are often still not fulfilled.

Thoughts on user generated content meets mainstream media: Scott-Bradley Pearce, CNET

As part of the lead-up to the Future of Media Summit 2007, I did a video interview with Scott-Bradley Pearce, who is Strategic Adviser Content Syndication and Multimedia, CNET Networks Australia. Scott-Bradley will be speaking at the Summit on the User Generated Content Meets Mainstream Media panel, on the Sydney side of the event.

The video interview covers issues including: * What kinds of media organizations are best positioned to take advantage of user generated content * Legal and other issues in using user generated content in mainstream media * Global and Australian trends in the media landscape Lots of interesting ideas here!

User Generated Content Cross Over to Television

User submitted content on mainstream media platforms is one of the most fascinating developments online. For many broadcasters it's created new challenges to find the right mix to create a social networking space of value. Firstly there is the technical issues - finding the right tool to support uploads, publishing and aesthetically interesting display; then there is administrative issues of how you manage all of the user uploads; There are Editorial requirements, what is the responsibility of a broadcaster in regards to the content? What vetting tools need to be in place? How do you deal with the large level materials that are potential copyright infringements? Then there are the issues of creating a compelling user experience which allows for rapid and valuable sort and search for relevant materials.

Another issue is that many broadcasters see the user generated content as an opportunity to deliver television output content. Conceptually this is a terrific idea, who wouldn't want to see their works on television? But in practice there are a number of challenges to consider.
Firstly, the vast majority of the content that is submitted is of value to only a small number of people -- most of the content is rough, often with poor audio and video.
Despite having great ideas about generating the content, it is really important not to lose sight that as a broadcaster you need to ensure a high level of content at all times.
While it may be really exciting for me to see my own video on television, it may not be that interesting to anyone else.
If only 1% of the content uploaded is of value to the users, sorting through to find the best possible content, can be a lengthy and expensive process. Broadcasters thinking that UGC is a cost effective way of acquiring content, may be surprised at the actual costs to get really good broadcast content. In many cases it may only be fractionally less expensive than producing content professionally -- this is not to say that it shouldn't be undertaken, you cannot argue with the massive benefit you gain from engaging in user submitted initiatives - I highly support and encourage further development, I just suggest walking with a sense of caution.

Launching the Future of Media Report 2007!

The annual Future of Media Summit held simultaneously in Sydney and San Francisco (the Future of Media Summit 2007 is on next week) is as much about providing new content, research, and insights as it is about an event. Last year the Future of Media Report 2006 certainly succeeded in its objective of sparking debate and discussion on the future of media, with over 70,000 downloads, commentary generated in seven languages from over 20 countries, and use of our content in magazines across three continents and in at least one government submission on the future of media.

This year we are following the example of last year, creating an entirely new report that looks at different angles and perspectives on where the media landscape is today and where it is going. The Future of Media Report 2007 is now officially launched - download it here.

Some things you’ll find in the report:

Eight Developments in Media July 06 of June 07. Examples of key developments, including industry transactions and acquisitions, layoffs, new channels, intellectual property, and consorship.

Shifting Global Advertising Channels. Data and commentary on shifts in advertising spending, and a comparison of ownership of the online classifieds segment in the US, UK, and Australia.

Comparison of Fastest Growing Properties and Internet Access. Exclusive original research from Nielsen//NetRatings, comparing uptake of new media properties in the US, UK, and Australia, and different online browsing behaviors across nations.

Key Elements of Media Business Models. Following the extremely popular Future of Media Strategic Framework from last year, we have created four complementary frameworks looking at Scalability, Value of Distribution, Value of Advertising, and Media Personalization. These can be applied to understanding emerging media business models. Each of the frameworks is explained in detail.

Media Industry Network Analysis. An analysis by Laurie Lock Lee of the recent acquisition of Southern Broadcasting Corporation by Macquarie Media Group, and insights on the impact on the Australian media industry landscape.

Media Transactions. A list of media mergers and acquisitions of at least US$1 billion over the last 15 years, putting the massive surge in recent media industry activity into context.

Download the complete Future of Media Report here.

Please feel free to pass on word or comment. As with all our work, the Future of Media Report 2007 is released on a Creative Commons license, which allows anyone to post it, use it and build on it as they please, as long as there is attribution with a link to the Report on this site or to this blog. The framework is intended to be a stimulus to conversation and further thinking, so if you disagree on any aspect, or think you can improve on it, please take what is useful, leave the rest, and create something better!

We’ll be releasing parts of the Future of Media Report separately over the next days and weeks.

Attendees at the Future of Media Summit 2007 in Sydney or San Francisco get a very nicely printed copy of the Report, so get along! Hope to see you there.

Digital Music: Managing Download Overload

Anne-Marie Roussel, who will be speaking on the San Francisco side of the Future of Media Summit, has a great blog. One of her recent extremely interesting blog posts was on collaborative filtering, a topic I believe will be central to the Future of Media.

The original blog post is here - full text below.

Digital Music: Managing Download Overload
The recent acquisition of the music recommendation site Last.fm by CBS served as another indicator of the explosive growth of the digital music market. Analysts and record companies estimate that digital music sales will multiply 20-fold by 2010.

That’s significant growth –driven by four key factors:

o Large increase in the number of music players sold and the wider device choice for consumers;

o Increased penetration by music-enabled mobile phones

The importance of social networking in shaping demand;
The ever-increasing number of online music retailers: Currently, iTunes commands 90 percent of that market. Today, it is a numbers game – the more content a site offers, the more consumers it’ll draw.
BUT, the digital music market is at a turning point

Tomorrow, it will no longer be a matter of quantity, but quality – ie, the value offered to consumers on top on plain content. The winner in the digital music war won’t be the one who can simply offer the largest music catalog. It will be the one who can help consumers manage the thousands of songs on their playlist. For music device/service providers, best way to capitalize on this digital music explosion will be to innovate – or acquire innovation – in the tools that enable consumer to 1) pre-select what they download and 2) manage the thousands of songs in their music collection (playlist). According to iTunes Registry, the average iPod user has 3,542 songs in his /her collection and actively listens to only 23 percent of them. Sixty-four percent of the songs are never played.

Notable new entrants
Several companies have developed music recognition and recommendation engines that aim to do that – by identifying a song’s musical attributes and then matching it to a listener’s taste. However, today, no software exists in the world that can identify a song by its musical attributes as well as humans. Much innovation is still needed to achieve that goal – thus the market opportunity.

Several companies are developing technologies to address at least part of the issue. Some, like Pandora (the most famous) and Gracenote, have been around for several years. Pandora evaluates songs according to hundreds of attributes (such as melody, harmony and rhythm) with humans (expert musicians) listening to the songs and performing “manual annotation” – ie manually scoring them for each attribute. Pandora’s shortcomings are 1) it focuses only on popular songs thus limiting the music that can be recommended; 2) Speed and efficiency of scoring is limited by human capacity.

Others appeared on the scene only recently - or are still in the R&D stage, like the Music Mood Wheel project by Microsoft Research. There are basically thrtee categories of providers: Those who do 1) Music recognition only; 2) music recommendation only; 3) both recognition/recommendation.

Music recognition

The company that will achieve Music recognition on the most reliable basis will be the market leader. Music recognition is the most difficult function to perform for a piece of software – because it needs to replicate human experience and/or human musical ear. Humans recognize a song if 1) they already know it (experience); 2) they don’t know it but they recognize the artist (experience); 3) they don’t know it but they can recognize the general style of the music and attribute it on the fly to an artist or a genre (musical ear).

The market opportunity for reliable music recognition is that, once the “fingerprints” of songs are identified correctly, it becomes easier to push to consumers music that correspond to their taste (or their mood) based on the musical attributes of the songs they want to hear – and thus to offer the highest value to consumers.

For example, MSR’s Music Mood Wheel technology identifies and classifies music according to two parameters – melody and rhythm of songs - to find the songs that best fit a listener’s given mood (mellow, upbeat, melancholic, happy etc..). Their concept is that when we listen to music, we usually want to create a specific ambiance (ie, party), or reinforce an emotion(ie, happy or sad), or suppress boredom (ie, while driving in the car). With the size of our music collections now exceeding our ability to recall every song, Music Mood Wheel replaces the "recall and search by title" process by a “browsing music by desired emotions” feature. The mobile device they have developed has a screen which listeners navigate via a “wheel” (similar to the old-fashioned radio wheel); the screen shows a graphical representation of music pieces - each song is a dot on the screen. The dots are arranged along to 2 axes: the vertical axis defines melody (the higher vertically, the more melodious, ie piano sonata).); the horizontal axis is the rhythm (the further to the right, the more upbeat the rhythm, ie rap). Listeners click on whatever part of the screen they are in the mood for – say, upper right hand corner for highly melodious and very upbeat - and the device automatically plays songs classified as such.

Music recommendation
This is a different model than recognition. These engines rely mostly on the “wisdom of crowds” to push the right song to the right consumer. These engines that do only music recommendation offer some value to consumers – but in the long run, their performance will pale compared to the ones based on reliable/algorithmic identification of musical attributes. They follow the model introduced by Amazon of a “collaborative filtering” process : “people who purchased this song also liked this other song” (SoundFlavor, MyStrands, BiggerBoat). Or a “community recommendation” model (Last.fm, Shazam), whereby the song of a given genre that is most listened to by the community is the one that will be recommended to a consumer looking for that genre. We expect that the later approach will have some traction in the marketplace –not so much because of its recommendation characteristics , which are not the most reliable, but because it addresses the importance of social networking in shaping demand.

Australia needs a debate on why it lags in online and network thinking

Smartcompany.com.au, the online-only business magazine which launched in February and is already doing very well, has an article titled Left behind Down Under (second story on the page) based on our release from last week and an interview with me. Some of the quotes from the piece:

Ross Dawson, founding chairman of Future Exploration Network, says the average bandwidth of Australian broadband is around a third that of the UK and a fifth that of the US.

“When you go to access video and audio it is so slow and clunky many people give up, so people spend less time on sites,” he says. The average time on an internet site in Australia is just under a minute.

Cultural issues also affecting Australians’ online usage. “We are less inclined to put forward an opinion in a social environment,” he says. “This means that we are slower in participating on blogs, forums and social networking sites.”

Dawson says the takeup of Web 2.0 by businesses is also trailing other countries, which is affecting productivity and marketing. “In the US in companies like Disney and McDonald’s use less email and do far more collaboration on projects, which contributes to better outcomes.”
Australians are also slower to use blogging platforms and other Web 2.0 for marketing.

“Organisations need to be far more innovative in how they use technologies internally and externally because as we shift to the global network economy we must be connected to other ideas and knowledge or we will be disadvantaged as a nation.”

As I said at the press briefing last week, I believe that Australia as a society needs to engage in a debate about why we are so behind in some areas of the use of technology. Overall Australians are early adopters of technology, but we are around two years behind the US and some other leading countries in tools such as social networks. While we are progressing, it’s hard to say we are catching up, having personally closely observed the uptake of social media in the US and Australia since before 2000. Poor Internet bandwidth and high data costs are certainly barriers, as are cultural issues. Yet Australians need to recognize that these are critical issues in a geographically isolated country which is set in an intensely networked global economy. How well we connect is fundamental to our future.

Huge rise in social media in Australia: Future of Media research release

IT Wire has just written an article about the press briefing we did earlier this week on the research being released for the Future of Media Summit, titled Social Networking Shows Explosive Growth in Australia. They've largely used our press release in the article, so thought I might as well provide that below, even though it was mainly a teaser for what we covered in the briefing. More details of all of this will be available over the next week or two leading into the Summit.

A brief summary of today’s release of research findings (4 July, 2007):

From Nielsen//NetRatings:

How bandwidth affects media usage: Low Internet bandwidth in Australia is playing a major role in the lower time spent online by Australians, and in how their media consumptions habits differ from other countries. Average home user connection speeds in Australia are 21%-43% of the speeds in comparable developed countries.

The rise of social networking online. In the year to May 2007, growth in use of YouTube by Australians was a massive 239%, resulting in 20.6% of online Australians accessing the site each month. That still leaves us far behind our peers, with 30.2% of Americans and US and 25.5% of British accessing YouTube. Australians are behind in the use of blogging platforms, but close to the lead in usage of Wikipedia.

Australian use of online audio and video: 44% of Australian online users have downloaded free audio, and 36% have downloaded free video, while 14% have paid to download audio. A total of 38% of users who download content transfer it to a portable device, while almost half of these users transfer all their downloaded content to portable devices.

Growth in international vs Australian content: In 2006, the growth in international content viewed by Australian Internet users increased 45%, comparied to a 21% growth in domestic content. This has been driven by massive traffic from Australians going to US social media sites such as YouTube, at the expense of domestic sites.

From Future Exploration Network:
Including pre-release material from the Future of Media Report 2007, due out 12 July.

Emerging media business model frameworks: How the “long tail” creates different business models for new media companies, and the relevance to Australian new media companies.

Media localisation and globalisation. Moves by News and Fairfax into local online media follow similar steps by major US media companies. However new media companies such as Perthnorg.com.au are creating new models for local media. This suggests new global opportunities for Australian media.

Personalization of advertising. Yesterday Yahoo! announced SmartAds, which provides personalized advertisements to viewers. Future Exploration Network has created a framework for how advertising will be personalized to the individual. There are massive implications for advertisers and publishers.

Comparison of new media markets in US and Australia. Australia has just 15% as many prominent blogs as peer nations, relative to its population. There is very limited development of Australia-specific social media. Classifieds ownership in Australia has tended to remain with large media players.

New approaches to user-generated content for broadcast TV

Great news - Dan Fill, Head of Multiplatform Production for ABC TV, will be speaking at the Future of Media Summit 2007 on the Sydney side, on our opening User Generated Content meets Mainstream Media panel. In this newly created role, Dan oversees the strategic development of multiplatform content creation experiences across all platforms. Prior to joining the ABC, Dan was the Vice President Interactive of Decode Entertainment in Canada, where he developed a number of multiple projects for Console, Interactive Television, Broadband, public broadcasting screens and mobile.

To provide some context for attendees at the Summit, Dan has provided three very interesting examples of what ABC is currently doing in the user generated content space. The intention is that this is just the beginning of a major thrust into this area.

Zimmer Twins:
http://abc.net.au/zimmertwins/

Zimmer Twins is an online tool that allows kids 8-12 to create broadcast quality animated movies online using a simple tool. Since launching about 2 months ago, over 30,000 short movies have been created. A selection of the best of these are being voiced over with professional actors and will air on ABC TV and ABC 2.

Life @ 2:
http://lifeat2.typepad.com/

ABC TV is part of a multi-year series that follows a group of 11 children at various stages of their lives. The television component is a series of documentaries that air every two years. The first LIFE @ 1 aired last year. To keep the interest in the kids and to follow their development, we have a website that continues to update throughout the course of their childhood. Right now we are in year 2. As part of our offering, we allow our audience to also upload their own audio, visual and text blogs about their own Aussie kids and they can track their own development. It's sort of a competition to be 12th child in the series, but it is also a great ugc blog space.

The Global Warming Swindle:
http://www.abc.net.au/tv/swindle/

This is a controversial documentary produced for Channel Four in the UK, the program refutes Al Gore's film 'An Inconvenient Truth' . Because of the nature of the program we anticipate a lot of feedback from the audience. We have set up a video feedback forum that allows users to submit their own thoughts as video responses in addition to the science blogs and user polls and forums.

Media trends

One of the problems with trends - and trend lists in particular - is that they often obscure the fact that the writer has absolutely no idea what is going on. Instead they are lists of things that have recently happened which the writer supposes might continue to happen into the future. Media trends are no exception. According to lists of media trends (including my own) we are entering year two of a revolution whereby user created content (from 'citizen journalists' and 'citizen reviewers') is radically altering the media landscape.Moreover, the speed at which the media are converging is intensifying and the separation between 'traditional' and 'new' or 'social'
media is becoming increasingly meaningless. In the midst of all this, hard-copy newspapers will continue to experience falls in circulation whilst network television will start to look increasingly anachronistic as information and multi-media entertainment moves online and goes mobile.
Indeed, the phrase 'the media' will itself become almost meaningless because everyone (and every company) will become a part producer and part-consumer of media. Or at least that's the theory.One immediate problem is that consumers now expect all Internet content to be free, which creates something of an issue for anyone wanting to create revenue or heaven forbid profit from digital content. As any budding economist will tell you, value is a by-product of scarcity so to create revenue content must be made scarce. This may actually happen. One trend that hasn't received much attention is the flight to quality.In short there is too much mediocrity and rubbish online so people are seeking out - and paying for - quality information and entertainment. One implication of this could be a flight to trusted brands - and journalists- for no reason other than consumers want their news from a trusted source and want reviews from people that are actually expert in their field. This is not to say that user generated content has no value and no future but it is hyped and we are all losing our sense of proportion. Equally the importance of personalisation and aggregation is, in my view, over-played. Sure we sometimes like things 'our way' but at the same time we don't want lowest common denominator aggregation or personalisation, especially if it takes up too much of our time to get it or it means that we miss the bigger picture. As the writer JG Ballard once said, "If enough people predict something, it won't happen"

Emerging media business model frameworks

Today we ran a press briefing on the Future of Media Summit, featuring a sneak preview of some of the research and content that will be included in the Future of Media Report 2007. Last year the Future of Media Report 2006 attracted excellent interest, with now over 70,000 downloads. This year’s report should be even more interesting than last year’s.

The centerpiece will be a number of frameworks that together are useful for thinking about how effective business models for emerging media. Today I’ll share one of those frameworks, with a couple of others coming over the next days before the release of the final report. We’ll also shortly release some of the findings from Nielsen//NetRatings, who as a research partner of the Future of Media Summit has come up with some fabulous global comparative data.

Our framework below shows the differences in business model required for the three major parts of the overall spectrum of media, from the head to the “long tail”.

A few initial comments on the framework.
Audience focus. Mass media only accesses broad audiences, whereas further down the tail highly selective niche audiences, by geography or interest, can be garnered.
Advertising models. At different levels of scale, dedicated, aggregated, or combined advertising sales models are appropriate.
Cost of content creation. Cost of content creation can be taken as a given, requiring a certain audience size or revenue, or considered as a variable to match revenue.

The most important take-away of this framework is that there is no right or wrong place to be on the curve, simply that advertising or other revenue models and content creation mechanisms need to be aligned with the audience. As related frameworks to be included in the Report will show, going for niche audiences can attract stronger revenue relative to costs. A “multi-niche” model which is effectively monetized can be more effective than traditional mass media approaches, by allowing sharing overheads and sales efforts, and gaining more value from highly targeted audiences. Scaling costs and overheads and extracting premium revenue is as viable a strategy as increasing audience size.

The rapid progress of personalized advertising and the changing role of creative

Yahoo! has just announced a new product, SmartAds, that enables advertisers to create customized advertisements on-the-fly to be relevant to the individual viewer. As revealed in an article in the New York Times, the advertiser gives the visual and text components of the advertisement to Yahoo, as well as access to its inventory, so the advertisement can promote specific products relevant to the individual that are available from a local outlet, such as a car dealer or branch of a chain store. The targeting is based on Yahoo’s at-times deep information about its audience, which is a critical advantage in these kinds of initiatives. The ads are being launched with three major airlines and several travel aggregators.

While this is being branded “behavioral targeting”, that depends on the richness of the data that Yahoo! has available, and is largely limited to people’s online behaviors. However this initiative illustrates just one element of a powerful and long-term trend towards greater personalization of advertisements. The other day, in discussions with a large national advertising assocation, I talked about how online is changing the role of creatives in agencies. Moving beyond user-created advertising, the next phase will be creatives having to create campaigns that can be customized on-the-fly depending on who is viewing it, when, and it what circumstances. SmartAds is only integrating data into a given advertisement. Certainly what is new here is the breadth of data which is being used, and how this is being pulled together. However personalized advertising has a lot further to go, where the actual advertisement and creative is tweaked for the individual.

Our Future of Media Report 2007 will be released next week, shortly before the Future of Media Summit 2007, held simultaneously in Sydney and San Francisco. In the report we will include some frameworks on models of personalized advertising, drivers of the value of advertising, and how these can be applied in creating new media business models. Keep posted!

The IPTV landscape

SmartInternet CRC, which was one of our partners for our Web 2.0 in Australia event, has recently released a very interesting report titled IPTV: Order, Chaos and Anarchy, examing the state of IPTV. The author is Mark Pesce, noted for being the co-inventor of VRML (Virtual Reality Markup Language) (which I was a big fan of when it came out – I wrote about it in my first book which came out in 2000) and his immoderate thoughts on the future of media – in other words an extremely credible commentator on an often muddied field.

Mark defines IPTV as “delivery of audio-visual programming via packet-switched networks,” which as he points out, doesn’t in itself help us understand what forms this will take as it matures. Mark picks out three key forces:
* Centralization, driven by commercial issues and incumbents
* “Hyperdistribution” allowing anyone to create and distribute content
* Social activists and entrepreneurs reinventing broadcasting as a peer-to-peer medium

In the report Mark covers issues including Internet bandwidth requirements for the evolution of IPTV, government policies, the role of BitTorrent, IPTV on the Microsoft Xbox 360, Joost, and the role of democracy. Well worth a read.

The Web 2.0 Framework and the future of media

A few weeks ago we launched our Web 2.0 Framework. This was intended to provide a clear, concise view of the nature of Web 2.0, particularly for senior executives or other non-technical people who are trying to grasp the scope of Web 2.0, and the implications and opportunities for their organizations. The Framework is highly relevant to the future of media, and part of the content we’re providing in the lead-up to the Future of Media Summit 2007.

Click here or on any of the images below to download the Framework as a pdf (713KB). There are three key parts to the Web 2.0 Framework, as shown below:

Web 2.0 Framework
* Web 2.0 is founded on seven key Characteristics: Participation, Standards, Decentralization, Openness, Modularity, User Control, and Identity.
* Web 2.0 is expressed in two key Domains: the Open web, and the Enterprise.
* The heart of Web 2.0 is how it converts Inputs (User Generated Content, Opinions, Applications), through a series of Mechanisms (Technologies, Recombination, Collaborative Filtering, Structures, Syndication) to Emergent Outcomes that are of value to the entire community.

Web 2.0 Definitions
* We define the Web 2.0 Characteristics, Domains, and Technologies referred to in the Framework.
* Ten definitions for Web 2.0 are provided, including the one I use to pull together the ideas in the Framework: “Distributed technologies built to integrate, that collectively transform mass participation into valuable emergent outcomes.”

Web 2.0 Landscape
* Sixty two prominent Web 2.0 companies and applications are mapped out across two major dimensions: Content Sharing to Recommendations/ Filtering; and Web Application to Social Network. The four spaces that emerge at the junctions of these dimensions are Widget/ component; Rating/ tagging; Aggregation/ Recombination; and Collaborative filtering. Collectively these cover the primary landscape of Web 2.0.

As with all our frameworks, the Web 2.0 Framework is released on a Creative Commons license, which allows anyone to use it and build on it as they please, as long as there is attribution with a link to this blog post and/ or Future Exploration Network. The framework is intended to be a stimulus to conversation and further thinking, so if you disagree on any aspect, or think you can improve on it, please take what is useful, leave the rest, and create something better.

Review of Future of Media Report 2006 and the Future of Media Strategic Framework

The annual Future of Media Summit is intended to be at least as much about generating high-value content for the community as it is an event. Over the next few weeks in the lead-up to the event we’ll be releasing substantial content in the form of research, analysis, frameworks, and commentary, both from Future Exploration Network, as well as from our research partners for the event (including Nielsen/NetRatings), event speakers, and other thought leaders on the future of media.

The biggest single release will be our Future of Media Report 2007. For those who haven’t seen it yet, I suggest having a look at the Future of Media Report 2006, which has been downloaded over 70,000 times, generated commentary in seven languages from over 20 countries, and been featured in several magazines globally. A brief table of contents is provided below.

The centerpiece of the Report was the Future of Media Strategic Framework, shown above. A full explanation of the Strategic Framework is contained in the 2006 Report. We (and others as well we are told) have used this extensively in our consulting work, to help organizations understand their current positioning across the media landscape, identify how the landscape is shifting, and build effective long-term strategies. The Strategic Framework is still completely relevant today, though we will be creating additional frameworks and perspectives for this year’s Report.

The full Table of Contents for the Future of Media Report 2006:
* Introduction
* Highlights of the Global Media Market
* Global Media Comparisons
* Emerging Media Relationships
* Content Creation and Usage
* Media Industry Networks
* Future of Media Strategic Framework
* Future of Media Strategic Framework: Explanation
* Five Ideas Transforming Media
* Media Snippets

The future of video search

One of the transformative technologies over the next 5-10 years will be improved video search. With video becoming the majority of digital content on the web, the ability to find what is relevant and useful is a vital task. Imagine being able to find, in a world dominated by video content (accelerated by eventually most mobile phones including video capabilities), the video segments most relevant to what you. In an interview on Beet.TV, Google’s Gabriel Stricker talks about Google’s ambition to search all video on the web, including the content on YouTube and the dozens of other video hosting sites. As he mentions, only a tiny fraction of existing video is on the web, so part of the task is helping video to migrate or be accessible on the web. On one level, this is about making it easier and more compelling for video creators – professional and amateur – to post their content on the web. Another innovation that will advance this is when all video cameras and video processing software come with one-step functionality to get content on the web.

One thing that Gabriel didn’t mention in the interview was the mechanisms that Google intends to use for video search. At the moment most video search uses only the title, any tags given by the author or others, and potentially words used in links to the video. To be truly useful, video search needs to index both the words and images in the video in a meaningful way. The first phase of this is now possible, with fairly good voice recognition technologies allowing traditional text search capabilities to be overlaid on the video search. Examples include Blinkx and Nexidia, which allow video search using its voice recognition and text indexing capabilities. One of the applications is to have contextual ads next to the video changing depending on what people are speaking about as the video proceeds. However the next phase, of recognizing and indexing the images in video, is largely beyond current technologies. Image recognition of even simply objects has proven to be one of the most difficult tasks in artificial intelligence. Massively greater computing power than we currently have available, along with far better evolutionary algorithms, will be necessary to be able to reasonably accurately identify what is relevant in video content.

The other key aspect to search is embedded video tagging. People don’t want to find the most relevant video which may take them 10 minutes or an hour to watch, they want to find the most relevant part of the video. This requires widely-adopted tagging standards (MPEG-7 is a front-runner), and that both existing and new videos get accurately tagged along their timelines, not just the video as a whole.

In short, video search is in its infancy. This has a long, long way to play out. One of the reasons this is so important is that it allows a ready mechanism to personalization of advertising, without needing to know people’s individual identities or profile (see our framework on advertising personalization in the Future of Media Report 2007). We can expect that people will have literally tens of thousands of video/ TV channels to watch, however this will only be possible if they can be monetized effectively and automatically. Google is announcing its ambitions in this space. Let the game unfold – there are massive rewards to reap.

All business is media: Institutional media usage surges

There is much excitement at the release of private equity firm’s Veronis Suhler Stevenson’s new measures and prognostications on the media landscape, with most commentators focusing on their prediction that Internet advertising revenues will exceed those for any other media form by 2011.

The single thing I find the most interesting in the report is the different paces of growth across different media users. “Consumer” usage of media is actually DOWN 0.5%, driven by shifting from long-format media such as TV to short-format media such as online news and video. In contrast, “Institutional” usage of media (comprising business, education and government) is UP 6.9%, outpacing the increases for “marketing” and “advertising”.

I have long said that we are moving to a world in which ALL BUSINESS IS MEDIA, and that is supported by these trends. Almost all of what businesses do today is gather, process and disseminate information or knowledge-based products, making what they do essentially a media business. This is reflected by a massive 7.4% difference in the growth trend in consumer versus institutional use of media.

The second key aspect to pick out of the report is the 6.8% total growth in spending in media over the last year. While global GDP growth for 2007 is forecast to be 4.9%, suggesting just a 2% outpacing of the rest of the economy, this masks the fact that media is heavily overrrepresented in the US, which accounts for 42% of media globally, where the GDP growth is expected to be just 3.3%. In other words, a very rough view suggests that media will double it’s share of the global economy in around 25 years or less. This just happens to be the figure I’ve been quoting for some time, so we seem to continue to be on trend for this.

The third feature of note is that revenues for blogging, podcasting and RSS are forecast to rise from $196 million this year to $1.1. billion in 2011. In other words, growing fast, but in the big picture very small compared to other media. The issue is that the boundaries of blogging and podcasting are likely to blur so much over the next four years, as existing media use these formats for their content, that it will be very hard to define what constitutes old and new media.

Other interesting analysis:
Businessweek Blog
HipMojo
E-media tidbits
Recovering Journalist

Global comparisons: Fastest Growing Online Properties

Continuing our series of excerpts from the Future of Media Report 2007, in this post we will cover the Fastest Growing Online Properties, which features some of the research done by Nielsen//NetRatings for the Report. The relevant data and commentary from the report is below – click on any of the images below to get the complete Report with full details.

One of the great things about having Nielsen//NetRatings as a research partner for the Report is that we were able to bring together global data in new ways to provide original research and insights. There are some very interesting perspectives that emerge from the differences in how new media properties are taken up across countries.

The US leads in usage of all leading social networks. The pace of growth in UK and Australia is extremely high, however they still signifi cantly lag the US in terms of breadth of usage. MySpace is the incumbent globally in terms of market presence. Facebook began as a US college-only social network, however since opening to other users has had strong international as well as domestic uptake. Opening up the Facebook platform to thirdparty developers in May 2007 has contributed to phenomenal global growth as consumers integrate increasingly more interactive tools.

YouTube has established itself as one of the most popular online sites globally, with very strong growth in the US to 30% of the online population accessing YouTube each month. The pace of growth in this type of US site in non-US markets has been so rapid that the total pages being consumed is starting to skew towards international rather than domestic content. The announcement in June of nine country-specifi c versions of YouTube will fragment some of this traffic. Wikipedia is consistently highly used across countries, while Apple’s UK website has greater market share than its US website, due to the relative lack of alternative music download sites.

Blogging platforms – with Blogger.com and SixApart.com the dominant players – show similar patterns in international usage to social networks, with strong growth in the UK and Australia as they catch up with the US lead in blogging.

Eight key developments in the global media industry: July 2006 – June 2007

In the Future of Media Report 2007 we included a quick overview of eight major developments in the global media industry in the year to July 2007, with prominent examples of each. Full details in the report. Developments continue apace – we’ll be keeping track…

Industry transactions
News Corp offers $5 billion for the Dow Jones, including the Wall Street Journal (finalized July 2007).
Sam Zell buys Tribune for $8.2 billion.
Clear Channel goes private in a $26.7 billion deal with a private equity consortium.
A sharp rise in private equity media acquisitions, including CVC buying 50% and then a further 25% of PBL Media.
XM and Sirius announce largest radio satellite merger in history (subject to FCC approval).

Major acquisitions by tech companies
Microsoft acquires aQuantive for $6 billion and TellMe Networks (est. $800 million).
Google buys Doubleclick for $3.1 billion and YouTube for $1.6 billion.

Layoffs and closures
There are 4,391 media layoffs in the US in first quarter of 2007 are, up 93% on the same period in 2006.
AOL Time Warner sacks 5000 staff.
San Francisco Chronicle announces plans to cut 25% of its newsroom staff.

User generated content
The majority of the 7 billion online videos streamed each month are user generated.
An unauthorised video of Saddam Hussein’s execution filmed on a mobile phone is broadcast around the world.
120,000 new blogs are created per day and Technorati tracks 70 million blogs.

New channels and distribution
France 24 and Al-Jazeera English launch global TV news channels.
Joost signs deal with Viacom to distribute TV shows online.
ABC, CBS, NBC and FOX provide full length shows online.
BBC iPlayer for streamed content approved for July release.

Advertising
Google pays News Corp a minimum of $900 million until 2010 to provides ads on MySpace and other Fox Interactive Media properties.
Revenue of US marketing-communications agencies rises 8.8% in 2006.
ITV offers viewers ‘mobile coupons’ linked to advertisements.

Intellectual property
A review of British copyright law concludes that copyright should not be extended from 50 to 95 years.
EMI drops digital rights management (DRM) on some of its online music sales.
Viacom sues Google for $1 billion for copyright infringement by YouTube.

Censorship
The US army bans MySpace and YouTube and restricts blogging.
Hugo Chavez does not renew the license of the popular Radio Caracas TV.
The Chinese version of MySpace, launched April 2007, filters “inappropriate content”.

Media industry transactions are now transcending the boom years

In our Future of Media Report 2007, we did an analysis of all media industry transactions of more than US$1 billion from 1993 to mid-year 2007. The transactions are not legible in the image below, so to get full details and analysis on the media industry transactions, click on the image for the complete Report.

Even at a high level of the general trends in activity, two things stand out. The first is the sharp rise in activity in 1999-2000, highlighted by the massive US$166 billion AOL/ Time Warner merger (remember that?), which still dwarfs any other transactions in the media sector, followed by a spectacular slump in activity in the following three years.

The second is how fast activity has risen in the last 18 months. Remember that the 2007 figures in the table are for the first half-year only. In fact if you take out the AOL transaction as an extraordinary one-off, there is a far faster pace of activity today than even in the boom years at the turn of the century. The question is, of course, whether this pace will be maintained or even accelerate, or whether it will again decline. While the answer is significantly related to stockmarket levels, since so much of the activity has been private equity-based, there is the potential for transactions to continue even after a fall in equity prices, as private equity firms snap up opportunities.

Media industry network analysis – tools for better strategic decisions

Among the most powerful applications of network analysis is understanding industry structure and the implications for strategy. While this is still a relatively new field, we are beginning to uncover some very specific approaches and applications to industry network analysis. If you go to a large strategy consulting firm to provide strategy recommendations, you will get a thorough analysis of your industry. However this is almost always highly linear, looking at market shares, value chains, and industry trends. This hides the richness of highly interconnected industry structures. The next 5-10 years of strategy analysis will see a far greater use of network analysis to understand leverage points for

In the Future of Media Report 2007, we included some new analysis by Laurie Lock Lee. In the Future of Media Report 2006 we used Laurie’s analysis of shifts in media industry networks from 2001 to 2006, and earlier this year I featured some high-level analysis on the network structure of the Australian media industry. This new network analysis goes considerably deeper, analyzing the change in industry structure before and after a significant acquistion, by Macquarie Media Group of Southern Cross Broadcasting. An overview of the analysis is below. See the Future of Media Report 2007 for the full details.

There are a wide range of highly practical applications of industry network analysis. One, as illustrated in the example below, is analysis of industry structure before and after potential acquisitions or divestments by your company or your competitors. This can show the industry impact of major transactions, and provide further insights into their value. Another example in the media sector which we are currently exploring is examining the rich networks between advertisers, ad agencies, media buyers, and publishers. Viewing this from a network (rather than a simple market share) perspective enables very specific insights into how advertising spending can be shifted from one publisher to another. I'll continue to post high-level views of some of this work and the kinds of benefits our clients are deriving from this.

MEDIA INDUSTRY NETWORK ANALYSIS: CASE STUDY
Laurie Lock Lee, Optimice

Network Analysis is a powerful tool for analyzing industry structure and developing effective strategies for ownership and positioning. It is particularly relevant in the highly complex and deeply connected media industry. In the following example, Network Analysis is applied examine the acquisition of Australia’s Southern Cross Broadcasting by Macquarie Media Group in early July 2007.

The network map above provides a representation of radio and TV license ownership in Australia. It shows that Macquarie Media and associated Macquarie companies have shared ownership of many regional radio stations.

The network shows the existence of ownership “syndicates”, where several ownership entities band together to jointly own multiple media licenses. Network theory identifies two advantageous positions to occupy within a network. Like in ancient times, being located in the center of a large city was advantageous in stable times. However, in times of growth, being located at the cross roads of major trading routes was highly beneficial. Networks are no different. Being centrally connected, in this case by part-owning many licenses, can be very beneficial. But in times of instability, being in a position to bridge or broker between disconnected elements of the network can be highly advantageous.

In the two maps above, the size of the companies reflects their “betweenness” i.e. the degree to which they bridge or broker connections between other companies. The pre- takeover map shows that the ownership network is quite fragmented. However Macquarie Media is part of the largest cluster, which contains three other significant ownership syndicates. Southern Cross Broadcasting is in the next largest cluster, which contains two significant ownership syndicates. The members of the largest ownership syndicates have similar bridging or brokerage power to Macquarie Media and Southern Cross Broadcasting.

The post takeover map shows that Macquarie Media has significantly increased its brokerage power over other companies by becoming the bridge between the two largest clusters, which were previously disconnected. Macquarie is now ideally placed to negotiate ownership deals with all the major existing ownership syndicates.

The evisceration of traditional media – advertising flows to digital

The naysayers of the dot-com era took particular delight in the demise of Henry Blodget, the Internet analyst at Merrill Lynch (where I used to work in the late 1980s) who was caught out promoting Internet stocks that he apparently privately thought were “a piece of junk” or “a dog”. As part of a subsequent settlement he is now not allowed to work in the securities industry. However Blodget continues to research the Internet industry on his blog Internet Outsider, where he has recently been writing provocatively titled posts such as Dead-tree media deathwatch: RIP Business 2.0, Running the Numbers: Why Newspapers are Screwed, and The Great Advertising Share Shift: Google Sucks Life Out of Old Media.

In this last post, Blodget analyzes the top 19 media companies (with supporting spreadsheets provided), indicating that advertising has shifted to online by 7% over the course of one year. The top-line figures are that US advertising at Google, Yahoo!, AOL, and Microsoft grew by $1.3 billion in the second quarter of 2007, while advertising at the 15 largest other media organizations fell by $280 million in the same period.

Or from another perspective, total advertising increased by 8% to $13.8 billion over the last year, with online increasing from $3 billion to $4.2 billion (23% to 30%), while offline advertising decreased from $9.9 billion to $9.6 billion (77% to 70%). Blodget comments:

These trends are secular, not cyclical: TV networks, radio networks, and newspaper companies won't suddenly wake up one morning and find themselves back in charge. Individual Internet companies may screw up (see Yahoo/AOL), but if they do, others will rise to take their place (Google).

Traditional media executives are doing a superb job of milking cash flow out of shrinking businesses, but you can't save your way to prosperity. The smartest companies acknowledge this and are 1) returning cash flow to shareholders, 2) diversifying via M&A (as the Washington Post has done), and/or investing in or buying promising interactive businesses.

These trends underline why so much media has been shifting into private/ private equity hands: even swiftly eroding cashflow can be used to service debt, whereas equity markets severely punish poor long-term growth prospects. There are certainly a range of viable strategies for traditional media companies, both in dealing with their existing assets, and leveraging current content creation and distribution capabilities into new industry segments. However the pace of the shift to digital (which is far more than just online) advertising makes managing legacy media a challenging proposition.

A rapidly growing advertising segment: compelling content people flock to watch

A few months ago I wrote a piece about new business models for content, sparked by a fascinating dream I had. In the post I mused:

My dream sparked off many thoughts about content business models, including the evident one of replicating the model in the dream – getting people to pay to skip ads. If you extend this far enough, you get to a model where you can price advertising by how much people are prepared to pay to skip it. Consumers should be able choose how they pay for content – by payment or attention. Ultimately we should be able to move to dynamic content markets, where there is a different cost depending on whose attention you are capturing, and the context in which it is embedded. Perhaps people will pay a lot of money not to have an ad inserted in the middle of a chase scene in a movie, but they will even be prepared to pay to see the ads during the break in the Super Bowl.

Now the model of ads being presented as content is rapidly gaining prominence. People are not quite yet paying to watch the ads, but they’re certainly choosing to watch them. An article in the New York Times titled Now, the Clicking is to Watch the Ads, Not Skip Them and a piece in AdWeek called Ad Portals: Will Viewers Tune In? lay out some of the current and forthcoming offerings:

VeryFunnyAds.com, an online version of a TBS show, is predicted to have reached 75 million viewers in its first year. The ads are mainly 30 second TV commercials.

Honeyshed, from Publicis and Droga5, will be an online space dedicated to branded entertainment.

Didja.com (as in ‘didja like it?’) is due to be launched in early 2008 by NBC Universal will feature outstanding TV commercials, as well as other branded content.

AdPerk is an advertising network for opt-in viewers who choose to watch ads and branded network (this model pays people with magazines for watching content, but has a similar intent, says Gregg Hano, publisher of Popular Science, which has just launched AdPerk on its site, in a Beet.TV interview )


Techcrunch thinks the stats suggest the trend doesn’t have legs. Paidcontent quotes Joseph Laszlo of Jupiter, who notes that only 8% of people say they chose to watch commercials online. Ryan Stewart, however, hopes that the trend to providing quality entertainment shifts into application software.

There are currently two kinds of TV and video advertising. The majority is crap that people want to avoid, even though it can sometimes be effective at increasing sales. And there is quality content that people will choose to watch. Yet both kinds have been lumbered with the rigid strictures of the 30 second TV commercial. Now that this has been transcended, there is no reason that advertisements shouldn’t become a totally open format. Why not 2 minutes or 10 minutes or even an hour? Stories can be told, people engaged. I don’t doubt that advertisers are going to create more and more compelling content that people choose to watch, particularly once the legacy of thinking in terms of TV advertising starts to fade.

The Future of the Blog

Six Apart's Mena Trott helped start the stampede by co-designing user-friendly software. But she thinks the blogging trend is only just beginning

It's hard to imagine the world without blogs. The publishing technology has become a cultural and political force. One of the reasons for the rapid growth of the blogosphere is the existence of user-friendly blogging software such as Moveable Type. The program was designed with simplicity in mind by Mena Trott, a former graphic designer and early blogger (she launched dollarshort.org in early 2001), and her husband, Ben Trott, a programmer.
Mena and Ben went on to found Six Apart, the San Francisco-based company behind the blog-hosting service TypePad. In January, 2005, Six Apart acquired LiveJournal, an online community of personal blogs that today boasts 9.6 million accounts and more than 16,000 new posts per hour. In December, 2005, Six Apart and Yahoo! (YHOO) announced a partnership to build Yahoo-hosted blogs with Moveable Type.

Six Apart is currently working on a new product, codenamed Comet, that will start beta testing this quarter. "It's meant for the next generation of blogs," says Mena Trott, without revealing details. Just before setting off for Monterey, Calif., to speak at the annual TED conference -- that's technology, education, and design -- Trott spoke with BusinessWeek Online reporter Reena Jana about challenges in blog design -- which, she hints, Comet will attempt to address. Here are edited excerpts from their conversation:

What do you see as the next big issue in blog design?
We'll focus on the idea of more select and filtered readership, and how to allow people to read certain posts. That to me is interesting: how different people want different views of the blog. A big issue right now is how to take that idea in account when designing blogs.

Another new challenge is the trend toward adding a lot of assets. People are adding photos, video, and music to supplement the text. How do you make it possible for bloggers to present as much as they want to present without creating blogs that are too cluttered or confusing?

Do you think that blogging will supplant mainstream news Web sites and other established media?
There will be similarities. But blogging and traditional journalism play by different rules and will remain distinct. They're meant to complement each other, play off of each other in terms of the readers' attention.

What do I read when I wake up? I go to news sites. But I'm more excited right now about personal users. The 10 blogs I really care about are written by my friends. I'm interested in the community of a blog network.

Even if you don't think that blogs will supplant traditional news media, don't you think they have had an impact?
I think the biggest impact of blogs on mainstream journalism is the presence of a more personal voice. The popularity of the personal tone used by bloggers has caused traditional media to realize it's O.K. for some reporters to use "I."

And now many mainstream news media outlets are now incorporating blogs on their Web sites. It makes sense. A reporter's or editor's blog provides a way to include details that might not make it into an official article or TV report -- and a strong sense of personality or identity associated with that journalist.

What aspects of blog-software do you believe can be improved?
I think blog tools can get easier to use. Putting together a blog should be as easy as sending an e-mail. I foresee the next versions of blog tools as focusing less on features that appeal to early adopters. They'll be easier for people to incorporate more media and maybe mobile capabilities. This will be important, because many more mainstream users will come to blogging. I believe the interest in blogging is just starting.

And are there specific design challenges that you're focused on?
The design of the blog really influences how and if people post comments. One big challenge today is that blog tools come with default templates. So we ask ourselves, what template design appeals to the largest number of people? What are they comfortable using?

As a designer of templates, you have to keep in mind that people will see the template over and over again, but need to realize that it's not same person's blog. So it's important to design simple and bare-bones templates.

Blogs need to be accessible-looking. It would be great to offer more decorative templates. But it's important to present blogs where you can focus on content and context.

What blogs do you read regularly?
I check out the LiveJournal blogs of about 30 friends. I like Nick Denton's Gawker and his other properties. But I tend to read fun gossip, the equivalent of an Us or a Star magazine. Gofugyourself is one that I find entertaining -- it features celebrities wearing ugly outfits.

Are there any common misperceptions about blogs that you would like to debunk?
Most people think of blogs as being primarily political or tech-focused. To most people, the important things they want to learn about have to do with people they know. So I think personal blogs are really the future, and with that comes a challenge for blogs to be more friendly and welcoming.

Also, blogs are all about capturing and preserving information about our lives. And that makes me think of what might be the biggest future blog-design challenge: How do we design blogs that will archive and present 20 years worth of content?