Clay Shirky's views on the future of media are uncritically reported in The Grauniad today:

On Newspapers:

The things that the Huffington Post or the Daily Beast have are good storytelling and low costs. Newspapers are going to get more elitist and less elitist. The elitist argument is: "Be the Economist or New Yorker, a small, niche publication that says: 'We're only opening our mouths when what we say is demonstrably superior to anything else on the subject.'" The populist model is: "We're going to take all the news pieces we get and have an enormous amount of commentary. It's whatever readers want to talk about."

Unfortunately, the things these major populist Online Newspapers are demonstrably bad at is investigative reporting on hard stuff that advertisers don't want to touch. In addition the (high value audience) economics of the Economist et al will allow high quality reportage (and printing) for quite a while longer than the mass rags as it has mo' subscriptions. What the New Media Romantics seem not to want to admit (publicly anyway) is a possible emergence emergence of a two tier news market, with Fluff for Free and real news for subscribers only.

On TV:

The renaissance of quality television is an indicator of what an increased number of distribution channels can do. It is no accident that this started with cable.

It started with Cable in the US because cable users paid subscriptions and real cash allowed - nay demanded - a move upmarket to more valuable users, whereas Ad funding in the US drove an inexorable downward shift to lowest common denominator programming. In countries like the UK this renaissance never occurred because there never was a collapse in the first place - the BBC ensured a minimum standard was kept.

But this comment is the one that made me write this post:

And the BBC iPlayer? That's a debacle. The digital rights management thing ...let's just pretend that it was a dream like on Dallas and start from scratch. The iPlayer is a back-to-the-future business model. It's a total subversion of Reithian values in favour of trying to create what had been an accidental monopoly as a kind of robust business model. The idea that the old geographical segmenting of terrestrial broadcasts is recreatable is a fantasy and a waste of time.

This is the same iPlayer (that is seeing its usage jump) being panned by the same Cool School Cult thinking that panned Hulu until it too succeeded. Simply put, Clay is off-beam with the emerging video reality here - we have just finished a major piece of analysis of the Future of Online Video, and it is clear that the value of the Here Comes Everybody sort of User Generated video media will be very small compared to high quality, long form content.

(ie in Online Video the Hulu / iPlayer models are demonstrably working, but many of the New School theses are demonstrably not in the short term, and we contend that with the freeze of speculative venture funding that they are less likely to succeed in the medium term as well going forward))

Clay has written some brilliant stuff over the years, and I am a real fan of his work - but he is not always right, and I think he is far less comfortable on video than on newspaper issues. A nd if this piece of uncritical reportage is the future of the Grauniad's reporting on New Media, well they deserve to be taken out by the Huffington Post because they are adding no value here.

The only think one can say about the whole Twitter Identity Phishing thing is "what took them so long". We've been banging on about the naivete of many Social Media users for 2 years. So instead of us doing it this time, here's someone else:

While this weekend’s Twitter phishing scam is giving people an “epiphany” about the dangers of the Web it was a long time coming, right? Internet threats are not new. Were social media lovers really so naive as to think that Twitter would stay unscathed for long?

In reality, there is nothing spectacular about this recent phishing attempt (one of the malware sites was used in a Facebook scam last summer). It’s only a different method of the same madness. Security pros know this. However, it appears that the social media space only woke up this weekend. (Note: The actual Twitter hack, described at the bottom of this post, is a slightly different story.)

Believe it or not, that’s not a bad thing. At least it woke up. Watching “the sky is falling” antics from the last few days has been both fulfilling and amusing.

Lets see if his changes anything this time.

No sooner do we opine that STB based plays are losing out to OTT Web TV plays, than along comes a set of stats to back us up (see above) - from NewTeeVee:

The amount of time U.S. Internet users spend watching video is up an impressive 40 percent year over year. Watchers tuned in for 273.1 minutes of online video in the month of November 2008, up from 195 minutes in November 2007, according to comScore.

Here is the "in-the-money" shot:

The number of videos viewed increased 34 percent, to 12.7 billion videos, up from 9.5 billion last November. But the number of video viewers is not growing quite as fast; it was up 6 percent, to 146 million from 138 million. Still, that’s stayed fairly constant since last year at about three-quarters of total U.S. Internet users (which is not in itself a fast-growing category).

This is far faster than IPTV service growth in the Online Video bake-off.

It still doesn't come close to TV mafrket share of course, where those sorts of attention numbers noted above are measured in hours monthly, but its a healthy sign for a major future industry

Netflix is to offer online Video on Demand via a variant of the closed Set Top Box play, by putting the STB in the TV (from the WSJ):

On Monday, Netflix Inc. is expected to announce a deal with Korea's LG Electronics Inc. that will make a Netflix online-video service available on a new line of high-definition TV sets from LG due out this spring. The online service offers 12,000 movie and television titles.

The issue with this business model is that its a closed system play, and requires the customer to make a capital investment upfront (and/or Netflix to make a subsidy). As IPTV players are finding out (and as we predicted when we set up this blog over 2 years ago) the "free ride" via laptop to TV is winning out - as the WSJ notes:

Instead of the often expensive packages of video content from cable and satellite providers, the Internet could theoretically deliver a much wider array of entertainment and information choices -- many of them free.

Intel, Apple Inc. and others have promoted specially tailored PCs, set-top boxes and other new devices for bringing video from the Internet to living-room TV sets. Few people bought them, but industry executives believe users will be more receptive as Internet connections become a standard feature of more ordinary gadgets -- such as TV sets, high-definition movie players and videogame consoles.

Two things need to be dissected here - firstly, will IP connectivity become standard in many consumer electronics devices, including TV - yes, absolutely. Secondly, will people prefer proprietary locked in media systems running over IP to open / full service IP capability - answer, No. And furthermore, the User Interfaces in most specialised "Media Centres" to date have not been very good, which is why (apart from overpricing) takeup is pretty low. (Apple being teh notable exception here in media UI to date)

LG predicts its plasma and LCD Internet TV sets will cost roughly $300 more than comparably-sized sets without online capabilities. Unfortunately, that's the price of a decent home router, a VGA to TV converter and a low end PC which gives you internet to TV connectivity plus all the other things a PC can do. Thats a cr*p deal in normal times, in the 2009/2010 Crunch its a harder sell.

Our take - the CPE (Customer Premise Environment) endgame here will be content independent, the desire for a media lock in at STB level is low enough, trying to lock in the TV as well is a far tougher ask. Do i have to buy another TV to get Amazon movies? And another for Blockbuster? Heck, why not just load up Hulu or iPlayer and get a TV converter?

Still, one thing we can guarantee - these will be sold hard to consumers, but we think it will be a hard sell as well.

Some interesting research about women on the Social Nets (from The Inquisitr):

According to a recent research report from BSM Media it isn’t just women bloggers that are having an influence as a growing number of women are an increasing presence in the technology world and the web. The report points out the two-thirds of moms use five or more forms of technology every day to keep in touch with their families. They also use this technology to consume a growing amount of content; this is besides those that also create it, as well as use technology to manage their lives.

For this segment of technology users things like podcasts and video blogging are more relevant to how they want to consume information. This goes against the perceived idea on the tech blogosphere that podcasting is diminishing in popularity. In this area the report predicts that in fact podcasting and video blogging could see a resurgence in popularity being driven by these new tech moms

.

Yet more evidence for our hypothesis that women will drive the "Next Net" far more than people currently imagine.

Article in the FT today about issues in the VC industry:

The US venture capital industry, which has become an important source of capital for technology start-ups around the world, is facing a severe shake-out that will lead to a contraction in future investments, according to some of Silicon Valley’s leading financiers.

These warnings follow one of the weakest years ever seen for profit-taking by start-up investors, and come amid predictions of an even worse period ahead. Only six companies that were backed by venture capital went public last year, the lowest numbers since the 1970s.

The other main way for start-up investors to realise gains – selling out to other companies – also hit a low point in 2008. Only 325 were sold, the lowest number since 2003, according to Dow Jones VentureSource. This lack of profitable “exits” for investors has come just as venture capital firms were hoping finally to recover from the dotcom hang-over – since many of the companies funded at the peak of the boom are now mature enough to be sold or floated publicly.

Add to this the point that many tech startups right now don't need a lot of capital to get going. A rare (in the history of tech evolution) combination in the last 3-4 years of of many defined/de facto standards, open source software building blocks and powerful new broadband pipes used by large numbers of people has created a rare opportunity to build services on powerful and as yet scarcely exploited platforms.

Prediction for 2009 - the VC industry is going to have to apply many of those "synergy" activities it uses on its investments - but to itself.

Patrick Smith, writing over on paidContent UK, has some interesting thoughts on print media's future :

....there’s a strong case for saying 2009 will mark a shift from seasonal, sensible belt-tightening to the long-term shrinking of the newspaper industry in Britain. Here’s why…

—The old business model is broken: The olde worlde of small, local newspapers with a reporter in every district, high circulation and a steady stream of advertising revenue is simply over. Now that they’re faced with oncoming recession and an advertising slump expected to last until 2010, until there is a scaleable business model for online news, Gannett’s Newsquest, Johnston, DMGT and the rest will simply continue to lower their exposure to a failing market. Don’t expect an upturn - newsrooms emptied of staff in ‘08 are not going to be re-filled if the advertising situation improves down the road. Trinity Mirror (LSE: TNI) CEO Bailey may assure investors the advertising downturn is cyclical, but these cuts are permanent. Newspapers used to monetise a physical, geographic network and monpolised the publishing activities of entire towns and cities. Now that the network is online and unconstrained by geography, it’s Google that dominates, taking more than half of UK web advertising spend.

—Print advertising is evaporating: The likes of Northcliffe Media and Trinity may have invested heavily in transforming their newsrooms for the online age, but the truth is they remain intrinsically tied to the 200-year-old model of classified ad revenue from homes, cars, properties and funeral notices. Media owners can only blame recessionary factors for so long - thanks to the web and media proliferation in general, their business models have been under threat for years. The deterioration peaked in ‘08. Trinity’s income from 26 June to 26 October was 11.4 percent down on the previous year, dragged by a slump in regional print ads with property ads down by nearly half, cars by more than a quarter. Johnston Press fared even worse, its income from print ads down 17.8 percent between January and October from the year before thanks to a halving in property ads. For the nationals, print ad revenue is expected to drop another 21 percent in 2009 according to Enders.

—Digital is still small, and stalling: All of this would be fine if digital revenue was growing to meet the shortfall, but current growth rates are not nearly enough. DMGT-owned Daily Mail (LSE: DMGT) publisher Associated Newspapers nearly trebled its online income to £9 million in the year to September, while regional stablemate Northcliffe made 42 percent more at £17 million. Impressive, yes; but it didn’t stop profits falling nine percent overall to £262 million. Even publishers that haven’t made online pay might have at least hoped a continuing online advertising boom would grow their online wins by default - but now the economy is taking that away, too. Enders Analysis says UK digital ad spend’s annual growth rate will slow from 20 percent in ‘08 to just 2.1 percent next year. Some analysts argue that newspapers should seriously consider giving online-only a shot, but not even Guardian.co.uk, with 25 million unique online users worldwide, is considering scrapping its loss-making print edition - such is the Catch 22, multimedia publishers feel compelled to hang on to the dead trees.

—Synergies wanted, apply within: Few in the industry would argue that more newspapers will close in 2009. But many will merge with papers in the same group and many editorial and commercial teams will be combined or outsourced to agencies as publishers look for ways to knock off unnecessary overheads. Last week Newsquest merged its two Wiltshire titles and Independent News and Media was forced to move its two national papers into DMGT’s offices to cuts costs, even after making 90 job cuts. DMGT’s local division Northcliffe Media is considering outsourcing the majority of its national sales staff to the Mediaforce agency. One media company that may fare well 2009 well is Press Association: the agency was represented at a meeting of Johnston Press executives to discuss the possibility of out-sourcing all subbing duties for the Yorkshire Post and Yorkshire Evening Post, although at least one foreign company is thought to have pitched at the meeting too.

So what happens if he is right?

There are undoubtedly synergies in the industry far greater than it is willing right now to contemplate, but this is early days in the (painful) industry consolidation and restructuring, and over the next few years we expect to see that change in structure.

The key issue though is what sort of media will you pay for?

What does a world look like if the only print newspapers are ad funded freesheets peddling PR spam and Sleb doings & screwings? Is this really what the majority of the public will want?

As we pointed out before, don't count on the online space - if all the blogs in the world were laid end to end then they (to paraphrase ) would not reach a conclusion. It is extremely difficult to tell signal from noise in the current online media.

(Apologies to readers - wrote a whole lot more, but tech glitches lost it and no time to rewrite more till tomorrow)

Friendfeed was one of those Silicon Valley services that launched with great aplomb, with high grade banner wavers like Robert Scoble on board from the get go - that we just never "got". Looks like many others didn't either, based on comments from Stowe Boyd (and the adoption curve he displays) on a Louis Gray post:

Now, the issue is that Friendfeed appears to be intimidating to people, and hard to learn how to get a benefit from it.

It may also be that the benefits of Friendfeed only accrue to very popular people -- like Gray and Scoble -- who have dozens or hundreds of acolytes who respond to their every post with a barrage of commentary. I will also suggest that those who are very active followers of those two and their ilk may also get a secondary, real and significant benefit as well. But the average schmoe, wandering around in Friendfeedland, having not perfected either massive social popularity or the followership model will try the service out and quickly leave never to return because there is no 'it' to get for them. There is no "there" there, as Gertrude Stein famously said of Oakland.

For what its worth, in my case there was just too much "there" there - Friendfeed was the classic device for turning a stream of news into a sewer of stuff I didn't want to see. In fact it was Friendfeed that first made me realise Filtering would be key in future. Louis Gray suggests they now need to have a Friendfeed Lite option - but I would argue that's called Twitter.

Stowe Boyd Points to a comment from Sarah Lacy that I'd concur with:

I'm predicting a modest acquisition in someone's future, with a price tag that decreases as the brutal 2009 wears on. That's a shame for a company that had a bright future and a good product, but it goes to show it's as much about execution as it is idea and attention.

(Clarification - I don't mean by this that I think Friendfeed will sell in 2009, it had $5m funding about a year ago and is unlikely to be burning even $1m pa. It's issue right now is the "what problem does it solve" that others can't rapidly copy or do "well enough", thus what value is it? )

Classic case of something loved by the Valley early adopters, probably given extra publicity momentum from the Founders' ex-Google status, that wasn't really capable of crossing that cruel Chasm.

(By the way, readers of Broadstuff can take the blogfeed on Friendfeed if they desire, look on the top right corner of the bog page)

Article in the FT today about the UK startup industry asking the government to provide more support to help young companies survive the recession:

Among the suggestions to aid start-ups are: a one-off financial stimulus package; a reduction in red tape; improvements in employment law; easier access to government loans; and the fostering of a more entrepreneurial culture.

Recently NESTA (National Endowment for Science, Technology and the Arts) called for the government to create a £1bn fund for “innovative technology ventures”.

But if I am honest, I think the word "innovative" is key. There has been (in the past anyway) a tendency for UK pork to often go to the well connected rather than the deserving. Any "bailout" money should not - in my view anyway - be used for companies that are doing me-too stuff, or are merely e-retailers, online consumer media plays etc.

What the government can do for all small companies is to reduce the friction in:

- Overall red tape - I still, after 4 years of running a small tech company, cannot believe all the arcane, irrelevant regulatory crap that one has to take on board as a director of a small company.

- Employment law - you could almost believe that UK employment law is designed to halt small companies forming. By the time every Health & Safety, Equal Opportunity, Protection of Workers etc special interest groups has had its say you wind up in a situation where the hassle of employing.
people is extremely high for small companies, and you need to take (expensive) HR people on board early to de-risk

- Getting Angel/Early Stage funding - as NESTA notes, withdrawal of venture capitalists from early-stage invest­ment has put pressure on business angel investors, making it “critical” government funding helps fill the gap. There are already 50:50 loans available, but many UK startups' experience of UK Angels is enough to make them want to get on a plane to San Francisco (and many do out of sheer exasperation)

- Equality of access to large corporate (and government) budgets - we went through a bidding process to supply to a large UK company last year, the time it took was the equivalent to a moderate project - in the £10-20k region - that sort of resource outlay hurts a small company much more than a large on (and yes, we got it thank you )

- More flexibility - last year we were selected as one of the promising startups for the CBA program, but in speaking to investors they hated the fact that we built innovative technology but also funded ourselves via consulting - they only wanted to fund us if we stopped consulting, which we are not prepared to do. In which sort of world is building a sustainable company model seen as a Bad Thing by investors?

- Make the grants system more realistic for Tech startups' needs - for example, there are lots of grants that are there to increase prospects for depressed areas, but the covenants are often too restrictive for Tech companies that need access to skilled people, high levels of connectivity etc etc

- Very simple and cheap ability to make companies pay on time - late (and increasingly non payment) is rife in the UK and still too hard to enforce for a small company

The trick in my view is to differentiate between the requirements of very small companies (less than 5 employees, c 80% of all UK companies), small companies (less than say 20 employees) and larger ones - currently far too much UK company/employment/regulatory policy is drafted with the assumption that all companies are at least medium sized.

I thought these two passages from the article articulated the key issue however, in that both are right:

Reshma Sohoni, chief executive of Seedcamp, an event held in London and across Europe for young tech entrepreneurs, said backers of start-ups that would in recent years have been allowed 18 months to start generating revenues are now being pushed to do so in two or three months.

Saul Klein, a partner at Index Ventures, said recently: “The best place to get money is from customers, that is the bottom line.”

Getting the balance between having a sufficient runway to actually build a business, but ensuring that the companies are actually viable (and what better way than real customers) is key.

Interesting article in the Daily Beast about the future of - well, itself really - and the Rest of The Media (bracketed comments are mine):

- The Rise of Undernews (no reporters anymore, you must rely on bloggers for investigative reporting)

- Go Online or Go Home (meedja must go online pronto, regardless of the nagging detail that most make no money doing it)

- That Goes for You Too, Newspapers (As above, but even more money lost but hey look at the link love)

- Let's Talk About Sexism (and they will, in droves - but I loved the point made that Sarah Palin has put the whole femist movement in a quandary)

- Alter-Egomaniacs (well known Journos will blog about their hobbies as well as their work)

- Black (Media) Power (as for sexism, but in colour)

- Remember Iraq? Neither Does Anyone Else (the cameras are leaving, time to pull the troops out)

Now far be it for us to point out that this analysis serves the Beast's position rather well, or that what they are pointing to is not a "New journalism" or even "New news" but by and large the rise of Op-Ed sans Facts.

However, we would point out that it seems that the real medium term implication is that a two tiered market for "real" news is emerging - those who want to know what is really going on will buy such as The Economist (which pays its people to do research) and watch the BBC (ditto, well for now anyway), the rest will theoretically exist on their Daily Me of limited width, factless opinion. I see this as part of the same trend that wants to treat scientific fact as but one opinion in a debate, or even treat maths accuracy as a moveable feast.

Quite why, at this point of a fairly productive 300 year Age of Reason, the richest and best educated populations on the planet want to throw all this learning away for something that is in effect not too dissimilar from what would once have been called propaganda (in its widest definition) and return to the information equivalent of the Feudal Age is beyond me.

But then, its free, so that explains it all..................

Or does it? Will this dismal future really emerge, or will the Silent Majority, once they have sampled the delights of such User Generated Content from We The Media, start to go back to edited, curated content albeit with more interactivity?