I was recently asked to answer this question:
Describe the current trends in the media industry and where you see the industry moving over the next five years.
This was my answer:
The media world is in disarray. Two technological changes – the rise of the internet, and, increasingly, the convergence of televisions and computers – are changing the industry in fundamental ways, and nobody can quite tell what the consequences will be.
It is not just that old assumptions are being put into question: the very way in which we think about media and its assumptions suddenly looks suspect. In a world where the costs of physical delivery and inventory are negligible and content supply is virtually unlimited, basic concepts like ‘content’, 'promotion' and 'distribution’ no longer mean what they used to. Content producers find themselves undermined by widespread piracy and user-generated content; traditional promoters are increasingly rendered irrelevant by word-of-mouth; and the internet, which 'free-rides' on proprietary infrastructure, threatens to turn the old distribution business into one of mere disintermediated access.
Consider, for example, a clip from a TV programme that is uploaded by a consumer to YouTube, and is then 'embedded' on a second user's MySpace webpage. Who is the content owner, the promoter and the distributor? Of course these questions can all be answered from the old paradigm: the content owner is the company that produced the programme; the promoter is MySpace; and the distributor is a combination of YouTube and the internet infrastructure providers it relies on (including the local ISPs).
But is this a useful account? Increasingly not: if the content had been uploaded by its copyright owner, it would not have the same appeal as if it had been uploaded by a regular user, with his/her personal touch and social context (which makes the uploaded content a derivative product); the prime promoter could well be said to be the second user (a key question in the current Viacom/Youtube lawsuit); and all of this renders physical distribution an afterthought, a commodity service that could have been provided by any one of YouTube's hundreds of competitors.
Does this mean that the old paradigm should be discarded and replaced by a new one like the one I have suggested? Probably not, but it is clear that a new paradigm will have to emerge, one that will include some aspects from the old model as well as some radically new ones. How much of the old world will subsist is anyone's guess. The courts will play a decisive role in answering this question, but much will also depend on evolving consumer behaviours and the industry's response to these - and this cannot be preducted. All that can be said at this stage is that in the new world consumers will have far more choice - and hence power - than today, and that business models that rely on restricting content supply will be in decline.
What we have seen so far is only a preamble to a far larger revolution that will come about when the convergence of computers and televisions (my second trend) is added to the scenario above (which is only a result of the internet - my first trend). New devices like the Apple TV will bring this turmoil to prime-time family TV viewing, throwing the TV and cable industries into direct competition with the internet. Then the stakes will be much higher than they are today; whole industries may disappear and new empires will be built.