Flypaper.tv

There is now a digital strategy at the heart of every media business model. The global media players are finally coming round to the idea that digital is more than just a marketing tool but a revolutionary change in media as we know it. It is an entirely new world of two-way interaction with the user, using mobile, online TV (p2p) , IPTV ("walled garden"), social media, and new technology to drive business innovation.

The challenge now for the big media players is to put themselves in the driving seat to distribute their content as widely as possible, across the different platforms and search engines, whilst collecting a share of the revenue along the way. Traditional broadcasters such as BBC , ITV , NBC , Comcast and Channel 4 are reacting to this change with the likes of Hulu (backed by media giant NBC Universal and Rupert Murdoch’s News Corp), Kangaroo, BBC iPlayer and Fancast — Most of which have only recently entered the Beta phase. BBC’s iPlayer statistics are promising, and we await in anticipation for Kangaroo (or SeeSaw?) to launch.

The likes of Apple , Google and (even) Joost are leading the pact, perhaps not yet with winning models but at least by stimulating the industry into waking up to a digital reality. Apple’s iPhone shows great potential in what lies ahead for mobile, while Google forges to corner the lucrative online advertising market. $50bn revenue is going to reach online advertising, and according to JP Morgan search will dominate the market by $60bn within 3 years.

Brands are becoming content providers/channels in their own right (MoSTV , Nutz.tv , Tommy TV , Red Bull ), social networks are flourishing, and this is turning the software industry upside down.

Bebo TV and Myspace TV are forces to reckon with, targeting the youth demographic with innovative made-for-online programs such as Kate Modern and Quarterlife . Watch out for Current TV and Vbs.tv as they lead the way with bite sized semi-professional programming — UGC is no longer about poor quality videos on YouTube , these guys are embracing the wealth of talented individuals out there who finally have a platform to showcase their work.

Keep an eye out for Joost, VeoH , Babelgum and Vuze ….one of these will revise its strategy and lead the way — they all have strong potential elements of success and are currently building their content propositions in hopes to gain traction with consumers. (See our article on BBC and Babelgum Deal)

Music companies are harboring the deepest wounds these days, and are the first to show weakness in this Darwinian Digital environment. Record labels are still struggling to find viable business models, with DRM at the center of the debate. Physical sales have slid from $11.9bn (2003) to $4.9bn (2012), with digital sales hardly making up for the loss. In August last year, private equity group Terra Firma bought EMI for 3.2bn after a dramatic decline in sales – in May the company announced it had made £260m loss for 2006/2007. Warner Music Group , HMV , Virgin , Sony Music Group and many others are suffering a similar fate.

Even as media moves from idea to execution, technology and the internet are forging ahead with whirlwind innovation. Technology players are competing to create the all-in-one digital device dominating the living room, offering the ultimate user experience; whilst the world wide web is constantly spawning new phenomena -online communities such as Facebook are regarded as the next big thing, powerful tools for content distribution, gold mines to be exploited.

The ‘long tail’ phenomenon is no longer only related to online video, as social media enters the niche vs. fat-belly debate. Will facebook remain strong or will niche sites like Flixster and Linkedin soar past?

While there have been paramount cultural differences in the way Asia/Europe/US markets consume their media, the new media world is quickly flattening itself out and we are seeing a cross pollination of innovation/partnerships around the globe. Singapore MDA is actively pushing itself as the media hub for the Asian market, with SingTel and MioTV leading the way, while India needs to be watched closely as it speeds ahead in the web 3.0 age.

Microsoft’s $44.6bn bid for internal portal Yahoo, and Yahoo’s recent $160m acquisition of video platform technology Maven show the industries growing belief in online TV and digital advertising business models. Google has had the dominant share of an online advertising market which grew 41% to reach almost 15% of UK advertising spend in first-half 2007 (Internet Advertising Bureau ). Globally, online advertising spend exceeded $40bn last year, and double-digit growth rates are widely forecast until at least 2010.

The canvas could paint a very different picture in years to come, which is what makes this industry so exciting, particularly for the digital entrepreneur.

Flypaper.tv is calling all brands and media owners to pick up your paintbrushes and lead the way in this exciting new digital world. Have fun with the opportunities, embrace both cautious and bold digital strategies, and let Flypaper.tv guide you where you need a helping hand.

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