Mike Walsh

The Future of the ABC

 

Had a very interesting chat last night at the FED with Mark Scott, Managing Director of the ABC. The premise of what it means to be a 'public broadcaster' over the next few years is set for a collision course with dramatic changes in the media consumption behaviour of audiences as well as the new economics of funding content.

The ABC have been successful lately in nurturing local content programming like The Chaser and Summer Heights High, which might have otherwise got lost in the reality TV mire of commercial TV networks. Both shows have done well in engaging younger viewers through building audience networks on new platforms like Myspace.

Experimentation is good news for Australian media - after all, if any broadcaster is in a financial position to take risks with the distribution model of content - it is the ABC. IP based distribution of ABC content is growing - by all accounts by the end of 2008, the ABC will have facilitated 50 million downloads of its shows. That raises two questions. Firstly, should ABC content be provided to local audiences unmetered through ISPs as part of an expanded notion of public distribution? And secondly, is the future of public broadcasting really broadcast at all?

Part of Mark's vision of the future was a multitude of new ABC channels. On this point, I disagree. In ten years, where most of the world's media content will be delivered on demand, time shifted by a PVR or streamed through an IP network - the concept of a 'channel' will have little meaning. The real question for the ABC is how it can continue to feed the long tail of Australian content, while becoming useful as a community platform for the discovery and distribution of local stories. And that's a scary thought.

As Mark observed, when you are held accountable at Senate Estimate Meetings for every piece of content, whether it be a TV show or a talkback call - the notion of unmoderated social media is not an easy one to countenance.

Aural Pleasures

 

I've been enjoying listening to the new city guides jointly released by Louis Vuitton and Soundwalk. Narrated by three well known local actors (Gong Li, Shu Qi, and Joan Chen) they blend personal anecdotes with ambient sounds and slick audio production.

The result is quite compelling. It's an amazing experience walking around a city, even one familiar to you, hearing someone else's perspectives on what you are seeing. And it's only going to get more sophisticated. As most of us start carrying GPS/phone/MP3 devices - geotagged audio tours are going to be the guide books of the future. Smart move by Louis Vuitton. After all, once luxury brands exhaust the possibilities of expensive objects there is only thing left to sell. Curated brand experiences.

Music Matters

 

There is a massive gap between traditional music industry economics and the rapidly evolving behavior of Asian media consumers. I spent a few days last week at the Music Matters conference in Hong Kong listening to some of the most senior record label executives dissect the complexities of their situation. Contradictions abound. Online piracy in China is rampant, and yet China Mobile made nearly US$1.7 billion last year selling caller ring back tones. Most of Baidu's traffic comes from its illicit MP3 search service, while authorised mobile download services in Japan are growing rapidly.

As always, there was a big white elephant. In this case - what happens when the consumer pressure for music to go free becomes irresistible - whether bundled with devices, streamed through licensing deals, or just downright freely available. When I interviewed Terry McBride, CEO of Nettwerk Music and Avril's Lavigne, he was more than ready to face that eventuality. His view was merchandise, events, and packaged fan access products would make up for the loss of CD sales. Paul McGuiness, in a controversial keynote, was less sanguine. He likened ISPs to shoplifters and accused them of rigging the market. Later in the conference, Bob Lefsetz ook cruel and unusual pleasure in ripping him apart.

The Asian music market is a subtle and fascinating study in the new dynamics of digital entertainment. For more details, stay tuned for the next episode of 'The Tomorrow Report' which will contain snippets of the conference, video interviews with some of the big industry personalities and an overview of the relevant market numbers. You can sign up for regular episodes either by email, iTunes or RSS.

Fuel, Whales & Short Sleeved Suits

 

Usually the rise and fall of commodity prices would be the last thing I'd be interested in. But the global drama unfolding over oil is riveting, particularly the broader historical context. Case in point is a piece in today's Financial Times looking at the demise of the 19th century Whaling industry, while the editorial in this week's Economist features an analysis of the 70s oil shock.

Look closely, and behind the recent rise of oil prices is a intricate opportunity/crisis ecosystem driven by the energy lust of developing Asian countries, the interplay of food prices and biofuel subsidies, the emerging bubble in Silicon Valley funded clean tech companies, and the waning geopolitical influence of the US in both China and the Middle East. Oil has become the ultimate example of a complex dynamic system. Not that it's just economics. Take shoene rukku for example - a Japanese style of short-sleeved business suit inspired by the last energy crisis. As Joi Ito pointed out in a post from 2002, back then even the Japanese prime minister enjoyed wearing them. Roll over Saville Row. It's time to turn off the AC.

Putting the Social into Conscience

 

Waking up every morning in China and watching the daily flood of images from the Sichuan earthquake has been both devastating and moving. But there has also been an interesting social media dimension to the disaster worth noting.

The same nationalist fervor that gripped Chinese bloggers during the Tibet and Torch relay protests, has been replaced by a collective sense of action in recent days - played out across SMS, QQ, Twitter and local Chinese BBS networks. Twitter apparently broke the news about the earthquake before the official earthquake tracking agency. QQ has aggregated video shot by its users from many of the affected areas, while amazing footage from mobile phones quickly found its way onto Tudou. And on the fund raising side, China Mobile has set up an effective system which lets subscribers donate by sending an SMS, which then gets charged to your phone bill. It's the future of charitable action. For more details keep an eye on Global Voices for their ongoing coverage.

Vince Frost & Futuretainment

 

This month's edition of Wallpaper* has an article on my upcoming  book Futuretainment.

The magazine lists the book as one of the top "2008 Design Masterpieces". The article has some great quotes from my art director on the project, Vince Frost. 

From the article - Will good design ultimately concede to digital books? Art director Vince Frost thinks so: 'The book has been replaced already. A book is an old-fashioned form of communication. We are all writers and publishers. We make our own content and share it with the world with ease. It's a break-down of traditional monopolies that have controlled monopolies that have controlled our literary diet for too long.' Fitting, Frost has art directed a new book called Futuretainment, which is about the amazing things that have happened and are happening in the digital world. Published by Phaidon, you will note that it is, in fact, a book.

Googlegangers Gone Wild

 

Well, the latest web meme has arrived. Googleganging. Or in other words - the strange affinity that people feel to total strangers with whom they share the same name. The buzz started with the new book 'Finding Angela Shelton', about a writer who describes her meetings with 40 other Angela Sheltons. According to the New York Times, there is some social science behind what I suspect is really just an exercise in vanity. But I thought I'd give it a try. So anyway, I was highly amused to find of us Walsh clones had decided, like in the movie 'Highlander' that there could only be one. From his website, the other Mike Walsh explains:

"Be forewarned! There are a lot of Mike Walshes out there. There is a guy in Hong Kong (used to be in Australia) who is some kind of luminary on interactive media. There is a Mike Walsh out of Helsinki (go figure) who is big in online games. There is a Mike Walsh (now dead) who used to be president of Textron. He was an early adopter of the cellular phone and died of a brain tumor at the early age of 42. Urban legend says that the publicity surrounding his death was the origin of “can cell phones cause cancer.” There is a Mike Walsh who perpetrated an accounting fraud against Boston Company, a big subsidiary of American Express, back in the 90’s. Based on the emails I receive, there was a Mike Walsh who apparently screwed every woman in Texas during the 80’s. Alas, I’m not a luminary; not a gamer; not dead yet; never perpetrated a decent sized fraud and never knowingly screwed a woman in or from Texas ( although there was the redhead from Plano… oh forget about it). So to end the confusion once and for all, I decided to become themikewalsh. Pretty clever, huh! Now when people come up to me and say… are you the Mike Walsh who … yada, yada. I can just cut them short and tell the… “I’m themikewalsh.”

Pure genius. You win. I'm changing my name. 

Instant Gratification

 

I don't think its any accident that social services like Twitter have lately experienced a rapid increase in adoption. Along with email, Instant Messaging was right there at the very beginning of the Web. But now, IM no longer exists in a vacuum. It's integrated in wide variety of other communications ecosystems including mobile text, social networking, blogging, status updates and feed aggregators. For me, Twitter was a toy on launch. Now that I'm addicted to Friendfeed, its utility has increased ten fold.

That's something to keep in mind as China's own IM boom continues to escalate. The China Web2.0 Review blog has posted some great stats on the phenomenon. QQ accounts for about 78% market share among totally 390 million active IM accounts in China. MSN Live Messenger has about 19 million active users, accounting for 4.9% market shared, followed by Sina UC (4.1%) and Fetion (3.7%). QQ have been very agile in using their dominance to introduce a wide variety of other integrated products. But well funded competitors are now in close pursuit, including China Mobile's Fetion service which facilitates free texting between PCs and mobiles, and Baidu's Hi platform. Two weeks after launch Baidu already claims that over 1 million people have tried their new IM service.

China Music Mayhem

 

They are at it again. The Record Labels in China are filing suit against Baidu and Sohu for their involvement in aiding piracy by linking to unlicensed music files. The WSJ has a useful summary of the less than successful attempts by the labels to force compliance in the past.

In some ways the situation in China may be a lead indicator of the future of the music industry in the west. Chinese artists derive only a tiny fraction of their income from CD sales, earning their keep instead from events and endorsements. Under that model, what you might call piracy, others might see as free marketing. The Labels probably know that too. Music downloading is such an integral part of the Chinese web experience, and a large proportion of the traffic to sites like Baidu - that I suspect that these law suits have more to do with gaining leverage in negotiations than forcing a change user behavior.

Pitch Perfect

 

Major League Baseball is ramping up their efforts to broaden awareness of the game in China. The interesting thing is that they are using the Web to do it. The FT reports that they will begin streaming games and other content on a Chinese language website it is creating with BroadWebAsia.

Although still not that popular in China, MLB has actually been a powerful content driver of new platform adoption elsewhere in Asia. One of the earliest deals South Korean Mobile TV operator TU Media did was with the MLB to broadcast games of Korean major leaguer Chanho Park. Ride on the subway in Seoul, and you will observe just how popular watching baseball on mobile phones has become. But don't hold your breath on the mainland catching up anytime soon. While Japan, Korea and Taiwan already send their best players to the US, the game is as yet barely played in China.

China Rising

 

The South China Morning Post reported today that China has finally surpassed the US as the world's biggest Web market by users. Last year, China added 73 million new users, taking their total to 210 million. What is really interesting is what lies behind the numbers.

The article references data by Pearl Research that found that Baidu's lead over Google had a lot to do with its strength in entertainment and youth functions rather than simply relevant and precise search. It's a fact little appreciated outside of the East. In China, the Internet is mainly used for entertainment and on Baidu, copyright concerns aside, it is very easy to search and download MP3 tracks. A different Web indeed.

The Social Grid

I'm in Mexico City this week. One of the things that amazed me was just how popular push to talk (PTT) mobile technology is among the urban young. Teenagers refer to the service simply by its brand name, 'Nextel'. PTT is half duplex, so like a walkie talkie, you push a button and talk while the other person listens. Rather than ring, you also speak into the phone to see if anyone is there. In many ways, it is used a lot more like instant messenger than a normal phone call. Local Mexicans also tend to keep the phone on speaker, making the conversation a public rather than private experience.

Since my talk at ETech last week I've received lots of great emails from people in the audience, and other industry people interested in learning more about the media consumption culture in Asia. Robert Kaye on the O'Reilly blog wrote a much better summary than I could have managed, and there were also some interesting blog posts on the talk by Phil Wilson, Sourceforge, Chris Arkenberg and Steffan Atonas. Quite a number of people have asked for a copy of the presentation. I'm preparing a short summary which will be ready shortly - if you would be interested in receiving one please fill in the Tomorrow contact form.

O'Reilly ETech 2008

 

I'm in San Diego this week for Tim O'Reilly's ETech event. Its the best conference around for hearing what is on the cutting edge, rather than just what the mainstream press are calling hot. My session is on Wednesday if you are in town, and is on the Asian Media Revolution.

Here is the session description: "There is a new generation of connected consumers on the rise in Asia. Armed with advanced phones engineered for mobile television, multiple identities in virtual worlds, and a freewheeling attitude to both content and copyright – Asian teenagers are voraciously reshaping the concept of media across the region. If you want to see what the future of entertainment might look like, its halfway between Shanghai and Seoul."

Zaha Hadid vs Chanel

 

I was stopping in Hong Kong for a few days en route to the US, and decided to check out Zaha Hadid's futuristic art installation for Chanel. It was superlative. I've been interested in watching the trend of luxury brand collaborating with contemporary artists for a while. The Mobile Art Container concept takes it a step further.

You are ushered into the flowing contours of the container and given a Creative Zen MP3 player to wear around your neck. A svelte voice guides you through the exhibition with a continuous ambient pulse of music. As I walked around, it occurred to me that this is a foretaste of the kinds of layered content experiences that will be possible mobile broadband becomes ubiquitous. Its also an example of the kind of immersive interventions that luxury brands will increasingly undertake, as they move from just projecting an image of an ideal reality, to reshaping reality for their devotees.

Two Kings: Yahoo vs Microsoft

 

Everyone loves a racy, hostile takeover bid. Its been a long time since RJR Nabisco, and given the larger looming shadow of Google in the background - the imminent showdown between YHOO and MSFT has all the hallmarks of high drama.

Its been interesting reading the coverage so far. Search and display ad consolidation is clearly a major driver of the deal, but don't underestimate the long term value of controlling a social media platform with critical mass. Facebook is growing fast but is still a minnow in the greater scheme of things. Webmail and messenger are still one of the most underutilised social assets in the West, and between them MSN and Yahoo have more than most.

If you want to see what you can achieve with a massive install base of email and IM customers, take a look at QQ in China. They have leveraged their 200m users into dominance in a wide range of other highly profitable online revenue streams, and none of them have anything to do with paid search.

Time To Face The Music

 

There's been a lot of fuss lately about Facebook's lack of data portability and its poor handling of consumer privacy on its Beacon program. Two total red herrings in my opinion. Facebook's real problem is that they have to get the act together on commercialising the core social media activity that takes place on their own platform.

Case in point is the poor execution of Facebook pages - the so called profiles designed for brands. For some unknown reason, the product designers at the world's most valuable social network have decided to cripple the functionality of pages relative to Facebook groups. So while you can invite your entire network to join a group, tag photos and videos, and virally drive membership on the latter - the former will leave you out in the cold. Facebook pages does have great statistics tools its true. Pity they only measure how the service is relative to the other more social parts of the platform. Myspace for all of its flaws at least figured out early on that the best way for brands to engage with consumers is for them to be able to act like one.

Walking On Air

 

Like the rest of the Apple fanboys, its just been Macworld, and I'm in love. The object of my infatuation? The Apple Macbook Air. Insanely small, shiny svelte and glistening with the usual Apple lust factor.

Actually, I was originally meant to be in Vegas this week for CES, but cancelled at the last minute. I can't say that I'm sorry. There seems to have been two themes at CES this year. Bigger screens and BluRay clubbing HD-DVD to death. Yawn.

Manufacturers forget that time and again consumers will happily trade resolution and quality for convenience and flexibility. Hence cassette tapes over high fidelity vinyl records, MP3 over CDs, and increasingly - web downloads over DVD. Take a closer look at the Macbook Air. There's no optical drive. The prediction is that audiences will increasingly stream or download wirelessly what they want to watch. Media companies should take note. By the time the studios have finished working out who's going to win the  physical media format war, they may discover it was a Pyrrhic victory after all.   

Merchandising Virality

 

There was a time when you couldn't walk down the street, ride a subway or drink a coffee without hearing the wretched racket of the Crazy Frog ringtone. It was certainly an interesting case study in mass virality, if not collective bad taste.

Why some content goes viral and most doesn't is the $60m dollar question. Or, as reported by Techcrunch, the $79m question. That's how much the Crazy Frog franchise made in 2005 through the sale of mobile ringtones alone. And that's not including CDs, plush toys, garments, videogames, posters, figurines and god knows what other kinds of merchandise were spawned from this manifestation of pure irritance.

Popularity is one thing. How to make money from it is another. Its a question I often find myself discussing with my media clients. Merchandising, made possible by mass viral awareness, might be one such avenue.

A Question of Taste

 

It's a sign that the virtual is becoming mainstream when the worst aspects of reality begin to manifest. In this case - a sub prime worthy credit crunch in Second Life, forcing the benevolent dictators at Linden Labs to take a stronger hand on regulating banking in the game. But as I found out yesterday, real world irritations are not just limited to finance scams.

After a long hiatus, I teleported onto a block of land I had bought on Dreamland some time ago. Dreamland is a managed sim owned by virtual real estate mogul Anshe Chung. Anshe had sold it to me personally, back in the days before she had achieved front cover of Time magazine fame and liked to joke around with her clients in her dry ironic way. Realising I had left this prime island plot empty for too long I opened my building inventory and dropped a structure in place.

My neighbors, used to an unimpeded view of the simulated sunset were not amused. A barrage of abusive in game messages quickly followed, including one from an administrator who protested that my futuristic modernist structure was a violation of 'island living' zoning regulations. In other words, not faux Moroccan. My protest that my new home was in the spirit of Brasilia's Oscar Niemeyer fell on deaf eyes. So much for playing at Howard Roark. It seems that the future of virtual living is still well and truly in the Rococo style.

Born Nodal

 

I've been reading some fascinating books lately on the science of networks and complexity. In particular 'Six Degrees' by Duncan Watts, and 'Linked' by Albert-Laszlo Barabasi. Both Watts and Barabasi have been active in many revolutionary studies and research papers that have changed the way we think about networks and their impact on society.

Network science is of great interest to me, as in researching my own book Futuretainment i've been studying how the interconnectivity of consumers is changing the media and entertainment industries.

Barabasi's book traces the history of thinking in Networks, from the static random network graphs of Erdos and Renyi, to our understanding today of dynamic systems like the Web or Facebook. It makes for dense but interesting reading. In his words, 'Nodes always compete for connections because links represent survival in an interconnected world'.