Thursday, June 12, 2008

Will all media be digital eventually?

A version of this piece was published in Marketing in 2008

For the last eleven years, I’ve sought out my respite from the digital maelstrom on a small Greek island.

Just a few years ago, there was no cellphone coverage, getting on the internet required you to dismantle the phone socket, twisting the wires together and holding them in place with sellotape (or band-aid on one occasion), and the one internet café on the island offered two computers sharing one ponderous dialup connection.

It was charming, idiosyncratic, picturesque. After a few days, it was pretty annoying.

But arriving there last week, it’s all change. Instead of upgrading the phone system (still rather antiquated), they’ve gone straight to wifi. Across the island, laptops can be used pretty much anywhere (though the sand remains a problem) and it’s brought the global media village crashing in.

Islanders who have spent their lives getting the papers a day late (a week late in winter) are now keeping facebook profiles. They’re downloading episodes of Lost. They’re video conferencing on Skype. They’re more online than we are.

Their media world has changed beyond recognition, and it’s not been a gradual process.

It was a reminder of what we’ve been through in the last ten years, as email, instant messenger, online shopping, Google, eBay, iPlayer have reshaped our access to information, to media and to each other.

But it was also a reminder that this change continues unabated in lead markets like the UK just as less developed countries catch up.

Last week’s Washington Post carried an interview with Steve Ballmer, Microsoft’s ever ebullient CEO, who predicted that by 2018, all media would be delivered via the internet. “There will be no newspapers, no magazines that are delivered in paper form. Everything gets delivered in an electronic form.”

Of course, we can all see why Microsoft would like it to be so. But how realistic is this?

Already, cinema is transitioning to digital, fundamentally changing the distribution economics of the medium and enabling more choice in cinemas, as well as altering the way advertising can be delivered and targeted.

Internet radio has been around for years, but ironically it’s wireless that’s causing a new surge in popularity as portable internet radios that connect through a domestic wifi network become common.

Viacom is wiring the London Underground for digital advertising, launching cross-track HD projection later this year, and anyone who’s ever visited Japan or South Korea will have seen the explosion in massive digital billboards there.

But it’s print and TV that are the biggest prizes. Ballmer complains that TV is insufficiently interactive (his son plays Xbox games through the night with people around the world, and TV just isn’t that engaging), and that it fails to offer sufficiently personalised content – he’d like to watch his high-school football matches from back in Detroit – he knows they’re videoed, but he’d love to watch them online.

He’s right. The internet is raising the bar; changing consumers’ expectations of what other media will deliver. In time, it will be consumer demand, not technological change, that will make TV an internet delivered medium. Technology is the enabler, but it will be consumers that will decide – and no matter what the current establishment might hope for, TV will be a massively more attractive medium when consumers can control their consumption (as PVRs show).

Which leaves print. Whilst the convenience and indestructability of paper will ensure it’s around for a long time yet, the economics of printing relies on volume. But as electronic media eat away at that volume, offering up-to-date news, searchability and multimedia, there will come a tipping point where it simply becomes uneconomic to use paper.

Even on a small Greek island, the media world now is almost unrecognisable from ten years ago. As Ballmer cautions, it’s not really important whether digital will dominate in 10, 8 or 14 years, the point is that it is inexorably replacing other media as the means of distribution – and that process isn’t slowing down, it’s accelerating.