Digital DNA

“Less is more”, a mantra you would find me repeating ironically frequently to people around me. I’ve always believed that too many words end up watering down a point. Too many slides make a presentation forgettable. So does this stand true when it comes to the explosion of digital content?

First the backdrop – best illustrated by a quote from google’s Erik Schmidt “Between the birth of the world and 2003, there were five exabytes of information created. We [now] create five exabytes every two days. See why it’s so painful to operate in information markets?”

This is backed up by more data stats. I read in a great blog post from Brett King on the world of exponential data grwoth that Facebook users share 30 billion pieces of content every month, the Twitterati create 95m tweets every day and You Tube users upload 24 hours of video every minute.

It is fair to conclude, therefore, that there is more content than we could ever cope with. Question is, if less is more, is the reverse true? Does more content actually deliver less enjoyment? Well, no. With the advent of intelligent filters that use historic activity, context, social influence, etc, we are already learning how to cope with more content. And even better, we should get even more enjoyment out of the fact that there is more content, as long as we have filters that pick out the most relevant piece of content at the right time and place.

Everyone’s at it. Predicting what might happen on the eve of a new year. So why not me?

My predictions are focussed squarely on digital entertainment and how we will enjoy it. I have stuck to just 3 main predictions. So, by no means a comprehensive list, but certainly the main themes that I think will see emerge this coming year.

1. The Explosion in demand/supply of personal content filters

After 3 years of preaching that the imminent arrival of a more personalised web means that data-smart companies will win in media, I am glad to see that we are on the cusp of moving into the third phase of the web – from ‘our web’ to ‘my web’.

Without personal filters, the deluge of choice will actually result in no choice at all as we will be paralyzed by too much data. Taste and context based navigation, search and discovery is now a necessity rather than a nice feature to have.

Personal content filters will appear either fully integrated in applications (e.g. Gig Finder from Nokia uses the music you play on your phone + your location to recommend gigs near you that you will like that are near you) or as stand alone recommendation apps that can be applied to various services (e.g. Youniverse or Hunch).

2. The end of the living room as we know it

In 2010, we got a taste of what the living room of the future may look like. Launches from Google TV and the arrival of movie streaming services on connected TVs, games consoles and the iPad have opened our eyes. We now ‘get’ that the kind of cloud-based media service we have been enjoying for music for the last 3 years will become available for all other types of media – and now the challenge is to minimize the time it takes to find the content, and maximise the time enjoying it at the right time, in the right place on the right device and with the right people.

At The Filter, my team are currently working on next generation content services for the living room. Where search, navigation and discovery are optimised to be more relevant to the context and the individual. I can see this approach catching on throughout 2011.

3. Advertising will be worthless if not relevant

Sounds obvious, I know. But ‘dumb’ advertising that takes no account of any/all of the available data to ensure relevance will go from a majority to a minority in terms of views.

Advertising that is hyper relavant to the individual is not perceived as advertising (a word that is synonymous with interruptive) and more as highly targeted offers or alerts.

In 2011, we will see an increase in content services that will reduce the quantity of advertising but increase both the intelligence of the targeting and feedback from its users. We will all get used to being asked whether we would rather see the Sprite, Diet Coke or Coke Zero ad before that episode of 30 Rock. And we will not flinch when an alert for buying a concert ticket for an artist we have recently become obsessed with pops up on our screen.

So that’s what I think of 2011: more personal content filters, a revolution in our living rooms and more user control and intelligent targeting in the ad market.

I have been asked to speak at Tech Crunch’s Christmas Crunch event on the 15th December. My presentation is called “The Real-Time Effect on Entertainment Content” – and my two big themes will be the way real-time has changed the conversation around live events and the types of real-time data that have an effect on the content we consume.

Any ideas/thoughts or examples you think should use. Please feel free to shout.

Just seen the latest Nielsen numbers for video consumption on Mashable. In the US alone, there were 11.2 billion video streams in July – that’s some 31% growth compared to the year before. Mashable dig further into the stats pointing out that “there were 135.9 million unique viewers of online video… that means that the average viewer watched 82.4 streams in July.”

This continued growth in video consumption in the US confirms what we know – that there is a lot of activity in the video related digital market. Traditional media companies are digitising more content and promoting their online video services, and then digital start-ups (like Boxee and Hulu) are gaining traction. This growth in new content and video services is not slowing down any time soon, making it easier for people to find specific content (because it is all available through search) but making it harder to discover new content because there is too much of it.

My team at The Filter have been working closely with some of the top 10 video providers in Europe and the US to increase user engagement by finding ways to help discovery through offering relevant video recommendations. The results have been really exciting – in all of the services we have been working on over the last 12 months, we have been able to deliver uplifts in video streams per visit of 20-50%, and users who get more relevant recommendations also visit more frequently.

The rise of online video services has been fascinating to watch. Especially over the last 6 months. Even though video sharing sites like YouTube have lead video consumption online, it is actually the “quality” end of the market (dominated by Hulu in the US and BBC iPlayer in the UK) that has further fueled this growth.

Recent research (by Pew) has found that video watching is nearing epidemic levels among the younger age groups – 9 in 10 internet users in the age bracket 18-29 watch content on video sites. And 1 in every 3 watches video content every day.

The interesting stat I found in this report was that amongst those who watch TV shows or movies online, 23% of them have hooked their computer up to a TV. It is video content that is leading the fabled living room convergence. Make no mistake.

I was reading NewTeeVee’s quarterly review – it highlights two main facts: (i) we are buying more and more “living room” devices that are capable of playing online video (e.g. set top boxes, games consoles) – projections are for 57 million devices to be sold in 2009 in the US, and (ii) cable operators are sensing a threat and responding with their own authenticated services – e.g. Time Warner and Comcast with TV Everywhere.

This all translates to a healthy and active sector in terms of investment and opportunity. Which is refreshing in the current climate.

I can back this trend up with what we have been experiencing at The Filter over the last few months. Demand for our video recommendations and relevance technologies is at an all time high: whether from content owners, distributors or aggregators, they all have a pressing business need to find intelligent ways of connecting more of their content to their customers. Editorial and popularity-based suggestions are better than nothing, but our experience is that it is only when companies start using consumption data and sophisticated and matured algorithms that they get seriously exciting results in terms of increases in dwell time, video streams per visit and visits.

Magazines ruled the 80s and early 90s. High quality magazines were produced for almost every specialist subject, and until the Internet came along, they were frequently the only source of content and entertainment for specialist hobbies and subjects.

The Internet has changed all that. You can now find out more about any subject online than anywhere else – the web is the ultimate source of specialist information. And even though you cannot replace the tactile nature of quality design and paper online (yet!), many magazines are finding that this feature is not enough to keep copy sales from declining and advertising revenue from going online.

The majority of publishers are struggling with the idea of protecting their current business models and making the most of the online opportunity. A growing number, however, are really starting to think beyond this idea that the web is just an additional channel for their content or brand.

Here are some of the most recent examples of magazine reinvention:
- Time Inc reforming Life as a photo portal,
- Meredith closing the print version of Child and absorbing it as a channel within its parenting portal,
- Hachette closing down the print versions of Premiere and Elle Girl in favour of online-only versions.

I will look for more examples and add top this list over the coming weeks.

Two things happened to me tonight: I went to an Internet People open mic session in London and when I got back home, I read Robert Scoble’s latest post – Web2.0 consolidation ahead?

And it made me think.

The Internet People open mic session was all about the lessons that the gathered London entrepreneurs had learnt. After the usual “you have to have passion”, “partner with someone you trust” kind of advice, Chris Ward (founder of isporty) stood up and said something along the lines of, “Closed networks can no longer scale in the UK, and, therefore web start-ups cannot rely on revenue models that require scale”.

I know Chris well, and have heard this view a few times whilst working with him. But it’s not until I got back home, and read Robert Scoble’s post (posted roughly at the same time Chris was talking – spooky), that I really started thinking that they are both talking sense.

Advertising is great, but start-ups need to do the maths to work out what traffic levels are needed to match their revenue needs. You need sites of scale to bring in £10K or more of CPC revenue every month. It is imperative, therefore to look for other revenue streams. Chris and isporty are aiming to make money first and foremost by offering social media tools and expertise to sports-related brands. This may well be their unique way of making enough money to give the site and company time to grow and develop.

I got an email invitation from my friend Tim to join Twitter: “This site Twitter keeps getting mentioned on influential blogs and websites,” he said, “It’s a fast burner at the moment in the States. Sign up like I have, and let’s see if it’s any good.”

Ok, so I have done that… now what?

A few days later, and I am embarassed to say that I don’t quite get it (yet). I’m usually quite fast off the mark with new communication stuff, but not here.

There’s already a load of praise and excitement for this micro-publishing system and I listened to a recent TWiT podcast where Leo Laporte and his friends were going on about how addictive the whole thing is. There just has to be something in it. Yet, I can’t help but feeling that unless there is a relevant reason why you want to get one-line updates of my whereabouts, mood or content of my shopping trolley, then I won’t be using this just yet.

I am wondering whether this is taking off in the US as SMS text messaging never really did. In Europe everybody took to texting years ago, and it will be interesting to see if Twitter takes off over here as much as it does in the States.