20 Aug
2005

















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     the new New Media

US media financier and analyst Veronis Suhler Stevenson (VSS) has released its latest Communications Industry Forecast, centred on yet another "New Media Order". This time, apparently, the new order is for real ... or at least more real that the order announced in the 1990s.

VSS argues that

technology innovation, the emergence of new media, quickening audience fragmentation, increasing demand for customization and tighter focus on return on investment are collectively causing major shifts in spending patterns and time spent with media. ... During the past five years, as this 'New Media Order' began to take shape, we have seen a gradual shift of time spent away from advertising-based to consumer-supported media, as well as a steady transfer of spending away from traditional to new media advertising. We expect the underlying trends driving this industry-wide transformation, such as consumer empowerment, accelerating audience fragmentation and the increasing need for stronger ROI measurements, to continue and drive accelerated growth in all four industry sectors as more sophisticated purchasing plans, which utilize a variety of conventional and alternative media outlets, become necessary

It forecasts that communications spending will be the 4th fastest growing sector of the US economy over 2004-2009, expanding at a compound annual rate of 6.7%, surpassing the trillion dollar mark in 2008 and reaching US$1.109 trillion in 2009 (compared with nominal GDP growth of 6.0 % during the same period. Growth in total communications spending in 2005 is forecast at 6.8%, reaching US$857bn.

Advertising spending is forecast to grow by 6.1% to US$199bn in 2005, reaching US$260bn in 2009. Consumer spending is expected to accelerate to US$199bn, reaching US$252bn by 2009. Growth of 'New media' advertising is forecast at 20.7%, compared with 3.2% for traditional media, reaching US$68bn by 2009. VSS envisages that traditional media advertising will grow by 4.2% on a compound annual basis to $192bn by 2009.

Professional and business information services, forecast to grow at a compound annual rate of 7.8%, will be the largest segment of institutional end-user spending, reaching US$142bn in 2009.

If you are a traditional couch potato - or merely someone exposed to the net, a phone and an iPod - VSS forecasts that you will "spend 10 hours a day with media by 2009", with highest hourly gains achieved by home video, consumer Internet, and wireless content and interactive television. The average US consumer will "increase time spent with all media per year at a compound annual rate of 0.4% to reach 3,555 hours in 2009". Meanwhile, consumer spending per person per year on media will break US$1,000 for the first time in 2009 after compound annual growth of 5.2%.

While the lights might be on there is no guarantee that the consumers will be at home: consistent with other studies we assume that much of that time will involve consumers multitasking and will not necessarily involve sustained concentration on a particular medium or its content.

That is of concern for marketers, with advertisers chasing the consumer in the 'attention economy' and much spending having no impact, discernable or otherwise. VSS forecasts that US spending on "new advertising media" (inc cable and satellite television, satellite radio, business-to-business e-media, consumer internet, movie screen advertising and videogame advertising) grew 21.7% in 2004 to US$31.37bn.

The 'newness' of those media is problematical - movie screen advertising, after all, predates both television and radio broadcasting. New media advertising is forecast to grow at a compound annual rate of 16.9%, reaching US$68bn (with a 26% share of total advertising) in 2009. By the end of that year consumers are forecast to spend 54.9% of their time on advertising-based media, compared with 56.8% in 2004.

The media expected to show the highest growth in usage are interactive television and wireless content (a compound annual growth of 31.3%), home video (8%) and videogames (4.4%). "Usage of total television and consumer Internet will expand in the low single digits".

A reminder that 'new' doesn't = easy is provided by the announcement that UK digital music company Music Choice Europe (MCE) has been sold for just £2.7m, presumably a disappointment for Murdoch's BSkyB (formerly with 36%), Time Warner (16%) and Sony (8%).

After floatation at the height of the internet boom in 2000 it was worth more than £200m on the London Stock Exchange. It has apparently been unable to garner substantial advertising sales and subscription revenue from television companies for carrying MCE channels has been drying up.

Another reminder is the announcement (PDF) that the US National Do Not Call Registry has topped 100 million phone numbers.

     postmedia conversations

US pundit Jeff Jarvis has meanwhile proclaimed that "We are headed into the post-media age". Uh huh.

The post-media age - we haven't sniffed the zeitgeist enough to tell whether that is post as in post a blog entry or post as in after the 'media age' - is about "conversation".

Jarvis, in one of the sillier post-McLuhan riffs, says that

When you think about it, media are the artificial inventions of their means of distribution: Books begat authors; fast and cheap presses enabled reporters and press barons; TV bore anchors. But there is nothing to say that these media are preordained as the best methods of sharing knowledge and getting things done in society. They were the convenient ways. Emphasis on the past tense. The natural means of interaction and of sharing information is, of course, conversation, through the ability to ask and answer questions, to impart and collect knowledge. I'm not one to make allusions to primitive life as if that describes the natural state of man, but I will in this case: When you listened to the tribe storyteller, you could remix before passing on; when you heard from the town crier, you could stick your head out the window and ask for details; when you set the price of a good or service, you got to haggle with the seller. This is why Socrates said that education is a conversation, and why Luther said that prayer is a conversation, and why Cluetrain says that markets are conversations, and why I say that news is a conversation. That is the natural order of things. Media changed that. Media made society one-way. But now the Internet drains the one-way pipes of media and pours us all in the same pond together. The Internet enables conversation.

You can't go wrong, apparently, with the "natural order of things" - nothing like a dash of determinism to spice up the sniping about 'big' (and soon to be dead, yaaay) media.

Jarvis' description is deliciously ahistorical, based on a misunderstanding of how consumers have interacted with print and other media in the past. That interaction has been more active and more varied than the hydraulic model, where the deux ex machina pours content down a pipe that empties into the empty receptacle called the consumer and thereupon gells.

Characterisations of the 'internet as conversation' - first usenet and more recently blogs - have attracted pundits such as Hauben, Shirky, Gilmore and Jarvis. They are often associated with notions of reification and 'community' (virtuous, independent, tolerant, necessarily democratic and liberal). In practice many of the 'conversations' in blogs, newsgroups and other 'new media' net are conversations of one - someone is talking but only the author is listening.

The internet does not make us all publishers, or authors, or even people with something to say. For many people 'conversation' inspired by and involving the broadsheet or the radio broadcast may have indeed been more meaningful because it was face to face. Yes we are in "the same pond" ... but we have been for a long time. Being in the same pond may be less significant than the opportunities, capabilities and appetites of who is in that pond ... some of us are frogs, others eels, others heros, others lilies and some are pond scum.

And as the Do Not Call Registry announcement suggests, there are some people with whom we just don't want to have a conversation - particular during a meal or while we're channelsurfing at home.

     where are viewers going?

Insights on internet traffic flows and consumption patterns are provided by internet news mapping service at the Akamai Technologies site.

The Akamai Net News Index measures the current appetite for internet news relative to average daily demand in terms of millions of visitors to 100 major news sites per minute, per week, within six global regions.

The Index has been hyped as offering "unprecedented insight into the relative hunger that millions of Internet users have to learn of breaking events minute-by-minute", with spikes in traffic revealing "the next wave of news demand" and offering "valid data on the impact and popularity of news stories" such as

-- How popular is Jackson verdict vs. Peterson verdict
-- Did more people tune in online for Reagan funeral or Pope funeral
-- Create rolling data that can create comparisons over time (i.e. Steroid Hearings vs. Filibuster Hearings)