I recently gave the keynote speech to the graduating students of the Australian Film, Radio & Television School. It was a great honour to be able to both address the topic - the future of media - and also the audience which included Kim Williams (CEO, Foxtel), Chris Chapman (Head of ACMA), Brian Rosen (CEO, FFC) and Kim Anderson (CEO, Southern Star Entertainment). Somewhat nervewracking as well. Read on for the transcript and the videocast.

Show business is probably one of the last few aspirational careers around.

I reckon if you were to ask a bunch of kids want they want to be when they grow up, there still be plenty that would say ‘Movie Director’. Whether they keep saying that after ten years working frothing lattes in Starbucks trying to get their first film financed is another question…

Being here takes me back to my own graduation. Except for me it was Law school – and not half as cool as this. I actually made the decision then and there - looking around at the rest of my class mates that being a lawyer was the very last thing in the world I wanted to do. So I went into that other disreputable profession - media. Not that my mother or her friends at the supermarket believed it for a second. She still thinks I’m an arms dealer.

Truth be told there are a lot of mothers, and for that matter, media moguls who are wondering just what the new generation are doing with their time…

Because they are beginning to suspect it is not being spent watching their tv shows or reading their newspapers.

And that’s a theme I’d like to talk about tonight. Graham asked me to talk about the future of media. I’ll try. But of course if I or anyone else really knew that the answer to that question, we either be doing something about it, or more likely, keeping our mouths shut.

But what I do know is this – the emerging new media landscape is of special relevance to Australian film makers because it touches on one of our biggest dilemmas.

Namely – is there a trade off between artistic value and popularity?

Actually I think most people in this room have another phrase for the problem.

Selling Out.

Funnily enough - it’s a concern that our compatriots in countries like the US with big enough domestic populations to cater for all kinds of niche material rarely agonise over to the extent we do. But in Australia we seem to constantly beat ourselves up with issues of cultural relevancy and ‘telling our stories’ and the like.

Put simply, the content debate boils down to this - should we be making things that people want to watch, or stuff that we think they should.

Australian film is a bit like fibre. Everyone knows it is worthwhile and would like to see everybody consume more of it, but no one really has the taste for it.

It’s an old debate, and not one I plan to step lightly into except to point to the fact that the Internet, like sex between friends, changes everything.

Forget the divide between high and low culture. When it comes to the Web, popularity is not an academic concept. It is hardwired in the fundamental DNA of what gets found, consumed and consequently financed.

To understand this you have to step back and consider how the entertainment business is changing.

In a recent speech to the 600 year old guild of Stationers and Newspaper Makers – Rupert Murdoch pronounced the death of the old media establishment - "Power is moving away from the old elite in our industry” he said “ the editors, the chief executives and, let's face it, the proprietors”

The audience, as you might expect, was full of all of the above.

And that’s pretty tough love for anyone to dish out. Even from the world’s most powerful media mogul.

But the fact is there is a new audience growing up today who scares the bejezus out of big media.

This new generation is as comfortable sharing information about themselves as reading about other people’s lives. They have never a known a world without the web, without email or blogs, or continuously beeping mobile phones. Think about it, this is a generation who thinks Paris Hilton is in danger of being underexposed.

Most of us in this room grew up with our entertainment choices mapped out for us in TV Guides, Sunday Night Movies, Cinema Listings, Commercial Ad Breaks and orderly release windows. Today’s new audience has never heard of programmed media. If there is something they want, they take it right away.

Instant gratification is everything. Regardless of copyright, medium or distribution agreements. It’s media yum cha. Only these guys don’t want to pay the bill.

All that means – however – is that we have to rethink the way we play the game. Truth is - so much of the way we think about the production and distribution of entertainment is tied up in linear models that are being challenged daily by cheaper, faster, more relevant ways of creating content.

I don’t need to labour the point. You know all of this. Most of you live this out daily with your iPods, illegally downloaded movies, and weblogs. What is not so easy to see is how this will impact on the ability of the Australian Film and Television industry to support itself and continue being relevant.

The good news is that is becoming easier and easier to find financially viable channels for niche content.

The Internet is living proof of the law of big numbers. Making niche content may not make sense in a country of twenty million. But the sum of niche markets around the world, reachable with low cost web distribution, makes infinitely more favourable arithmetic.

Within the next eighteen months, web giants like Yahoo, Google and Microsoft will make it simple to upload a piece of video content, assign digital rights protection to it, and charge a small amount of money for consumers to watch it.

Once that happens, many of the headaches of trying to deficit finance content that attracts a very select or domestic audience go away. But there is a catch.

Which for many, will almost certainly be the proverbial bad news.

You see - you as product creator can no longer hand responsibility for the size of the final audience to anyone else. Either a million people pay $1 to watch your program and you cover your costs, or they don’t.

In the good old days, your dialogue as a film maker was not with your audience but with the gatekeepers – bureaucrats and bored bankers - who decided whether you got funding or not.

It was easy talking about cultural diversity and stories that needed to be told when quota systems, broadcast programmers and territories could control what audiences watched.

But the only way that you could win that argument now, in a world of infinite and often free online entertainment options, is if you actually paid people to watch.

You see – popularity is no longer the simple enemy of artistic merit. The democracy of the web makes transparent something that has been true for some time. There are two kinds of great work. Art that people want to see, and art that they don’t.

There is a great story about David Lubars, when he joined as the Executive Creative Director of Fallon, one of the world’s best Ad Agencies, and also the brains behind the BMW Films concept.

He called his team together and said that in his view they were here to make Beatles Songs. As you can imagine there were more than a few confused looks in the room. David explained it by saying that there are two kinds of songs in the world. Brilliant ones that no one listens to, and those that while still considered timeless and musically brilliant – also happen to go triple platinum.

Beatles Songs.

Its sharp advice. And counsel which cannot be ignored when it comes to the web. The totally level playing field of the Internet means you are not competing for just your share of the family movie budget at the Rooty Hill Multiplex, but with billions of other bits of online content all vying for an audience.

You see - there is no such thing as an inspired, thrilling, artistically authentic movie on the web that no has watched. It doesn’t exist because by definition Google won’t be able to even find it.

If the new economy has a currency – it is attention.

The magic algorithym behind Google’s search rankings may be veiled with the secrecy of the Coke formula – but the principle is not difficult to grasp.

Google uses popularity as a proxy for relevance.

Put simply, the more sites that link to your piece of content, and the more sites that link to those sites – the higher up the rankings you will be for a particular search term. And be assured, search engine rankings are not just bragging rights for geeks.

In an age where more and more people begin their entertainment consumption time by looking on a search engine, rankings are as powerful and commercial as a five-story billboard on Times Square. In fact, more so because they are updated around the world every day.

That might sound like a recipe for the further Mcdonaldisation of global culture. But it really isn’t that simple. The opportunity of the web is not in the 20% of the content that gets 80% of the traffic. It is in what people are calling the long tail.The 80% of highly diverse,differentiated content, which although attracts only 20% of the attention, when aggregated efficiently proves to be very lucrative.

Don’t get me wrong. Big ticket items and blockbusters are not going anywhere.

However the important thing to realise is that audiences are now loyal to content brands not the distribution platforms they arrive on. Think about it - if you love Buffy the Vampire Slayer, the OC, McLeods Daughters or Seachange – you actually don’t care whether you watched it on Channel 10, via an Apple iTunes store download, or illegally from your 13 years old’s limewire collection.

It is the show and not the medium that attracts you. And that is great news for content creators.

But don’t think you are the only one with a hand in the cookie jar. All those thousands of weblogs, discussion forums and community sites that spring up around your film are not just a boost to your marketing efforts - they are actually form part of the shared experience of media.

If you think about it – part of the joy of watching a high rating TV show like Sex in the City, or a big budget movie release is not just the act of consumption, but sitting in a lounge room or a theatre with other people who you can share the moment with.

The new trend of displaying audience text messages on music video shows is just a reflection of the popular teenage practice of texting each other during reality TV shows. It won’t be long before instant messaging windows will also share the screen with traditional TV broadcasting.

You can see that the days of simple household arguments about who gets to hold the remote are about to get much worse.

The audience is no longer an amorphous embodiment of AC Nielson statistics waiting around for someone to entertain them. They are an active participant in the new media model. They co-create entertainment experiences with you.

What that means is that the most important relationship you as a film maker should nurture today is not with the funding gatekeepers but with your final audience. And its not just about marketing.

The deep involvement consumers have with their entertainment choices will eventually also create new opportunities for financing. If you love Quentin Tarantino or the Warchoiski Brothers, why wouldn’t you want to contribute money to finance their next film if it also gave you behind the scenes access to production rushes or an invitation to a preview screening?

The DIY attitude to media is also starting to ripple through the ranks of established media companies – threatening the worshipped sacred cows of production standards.

A colleague at the ABC related to me how many of the old time audio engineers were getting their noses out of joint by the new crop of podcasters, who carelessly mixed up samples, low fidelity MP3 tracks and dubbed in audio – before slinging it out for mass consumption. They thought it was an abomination that anyone would be allowed to produce something on air that hadn’t done their time cutting up magnetic tape.

A similar thing is happening in video. Kids with a cheap video cameras and a copy of iMovie, or machima artists voicing over pre-recorded scenes from video games – are making content that is being viewed not just by a few of their nerdy friends but by millions. Of pretty normal People.

So when you consider all that - there is no doubt that you are graduating in a time of incredible change.

Up until now film makers have blamed everyone but themselves for work that nobody wanted to watch. But with the internet there isno one to blame but yourself.

The bad news is that the funding bodies and distributors who have subsidised so many creative careers up until now are not really going to be able to help you in this new world.

The good news is, like leaving home, your parents are also not going to be able to get in your way.

Audience fragmentation, web distribution, and consumer generated content are all forces contributing to a new state of play that will make it harder than ever to earn a living doing what has been done before, but arguably easier than at any other time, to break all the rules.

And that’s exactly what I would urge all of you to do.