IT’S HARD TO FEEL A revolution when it’s rumbling underneath you. When I moved to California in 2009, I finally got around to throwing out a big box of video cassettes, which got me thinking about buying my first DVD player in London in the late 90s. At my local video store, I struggled to find new releases on DVD. The conditions were in place for a major shift — both consumers and movie studios were hungry for a higher-quality, more durable and interactive alternative to VHS –but at the time, if someone had told you that VCRs would soon be obsolete, you would never have believed them.
Fast forward to today. What percentage of your time do you spend consuming media online (watching YouTube, for example, or reading tweets, Facebook posts, news, and blogs) relative to offline (watching TV, going to the movies, reading a newspaper)? Maybe 20%, maybe 30%, maybe none at all. But consumption of media online is shifting dramatically upwards. In the month of December of 2010, 172 million people in the U.S. (about 56% of the population) watched an average 14.6 hours of online video. Even though India is behind in broadband penetration, this media trend is taking root: 3 out of 4 Indian Internet users spend more time online than watching television. In 5 years from now, I believe that somewhere between 60 and 100% of all media will be what we today refer to as digital: video, music, news, games, and more. There are several forces at play here: the growing ubiquity of broadband, the proliferation of smart phones, tablets, and other IP-connected devices, and the richness of content flowing online. The net effect of these trends? You can get your media fix whenever, and wherever, you like.
The web is fundamentally and permanently the business of media, as well. Now all you need is a video camera, a word processor, or a microphone, and you can have instant global reach. YouTube has become a laboratory of talent: Justin Bieber was a child prodigy percussionist with a few cover songs on YouTube when he was discovered by a producer; today, he’s a multi-platinum best-selling artist. Businesses are also experimenting with ingenious new ways of using the Internet to reach an audience. The India Premier League realized that of all the people who come to Google to search for IPL-related information, over half of them were interested in watching the games live. So last year, they decided to stream all 60 matches live on YouTube. They ended up with more than 54 million views from over 200 countries, making YouTube the largest online cricket stadium in the world. There are three fundamental characteristics that make the web special – one – it allows us to interact with the media on a one on one basis, it allows media to be personalized and we can all participate. These simple forces are destined to change the shape of media and all business as we know it.
The last piece of the puzzle for this conversation is advertising. Today, by even the most generous of estimates, only a small piece of the total ad market is digital (about 3.5% in India and about 13% globally). But as consumers spend more and more time online, the ad dollars will follow. Furthermore, as a platform, the Internet opens up completely new model of advertising: one of interactivity and precise measurement. Suddenly, everyone is your customer, since you can reach them anytime and anywhere: when Evian put its baby commercials on YouTube, they got over 30M views — 30M times people chose to see a commercial! The Indian Premier League livestream on YouTube was backed by partnerships with Royal Challenger IPL team, HP, Coca Cola, Airtel, and Samsung, and more all of whom experimented with innovative new ad formats like pre-roll and mobile. We’ll continue to see more of this trend: advertising will be about engagement, not brand awareness. The more fun consumers have with your ad, the less work you have to do to persuade them to buy your product. This is a far cry from the first ad aired on a TV network a hand moving a Barbie doll over a radio jingle for a few seconds!
When the TV first came out, it was called the color TV; when cars first came out, they were called horseless carriages. We’re clearly on the cusp of another revolution, and I don’t think we’ll be calling it “digital media” for very much longer.
Taken From “ The Economic Times” 01 February 2011