The future of media in Asia demands a Constructive Destruction

1. The future of media in Asia demands aConstructive Destruction A presentation byPrasena

2. Let’s take the Consumers’ Viewpoint access to:

3. Digitalization The Wheel of Time is Spinning! “The phenomenon of digitalization is much more than a technological revolution. It enables the democratization of information.”Isabelle Michelet, Prasena Whether sound, picture or text-based, all information can now be simultaneously accessible on one support

4. What Consumers don’t really care about • What is behind the tools available to them: • Telephone industry (the technology, the exploitation of channels, the programming) • TV industry (the technology, the exploitation of channels, the programming) • Radio industry (the technology, the exploitation of channels, the programming) • Publishing industry (the technology, the exploitation of distribution channels, the editing) • Music industry (the technology, the exploitation of distribution channels, the editing) • Movie industry (the technology, the exploitation of distribution channels, the production) In other words, the Suppliers!

5. ‘ONE’ exception • The open market of Internet, its capacity to aggregate contents of all types originating from anywhere and using all types of media, its invitation to interact, reminds consumers of their true objectives

6. Have we forgotten the Consumers’ Objective? • To give a call, or check SMS? • To watch TV, or a VCD/DVD? • To read a newspaper? • To listen to radio, or to a CD? NO!

7. But.. • …it is to get a varying mixture of: • Entertainment (music, games, movies, shows, sports) • Education (culture, learning, discovery, research) • Or rather Edutainment (learning in a fun, interactive way) • Information (news, analyses, references) • Or rather Infotainment (get informed in a fun, interactive way) • Contacts with the world (specific or not specific person/community)

8. Knowledge The Wheel of Time is spinning! “If we value the pursuit of knowledge, we must be free to follow wherever that search may lead us. The free mind is no barking dog, to be tethered on a ten-foot chain”.Adlai E. Stevenson Jr., speech at the University of Wisconsin, Madison, 1952 Consumers want the freedom to access whatever knowledge they value

9. Demand for contents is not a concern • Global entertainment and media (E&M) industry spending has risen by 1.5% in 2001 and exceeds $1 trillion. It should reach $1.4 trillion in 2006. (PricewaterhouseCoopersGlobal Entertainment and Media Outlook 2002-2006)

10. But the way contents are accessed is (1) • Clue #1: Consumers turn from passive to active viewing • Pay-per-view (including VOD) will be the fastest growing media category over the next 5 years (20% growth per year) PriceWaterhouseCoopers' Global Entertainment and Media Outlook • Clue #2: Consumers want various viewpoints, various media, on a given topic • 53% Americans say they would be most inclined to trust television if they received conflicting reports of the same news story from radio, magazines, newspapers and TV. Roper Starch Worldwide 1997

11. But the way contents are accessed is (2) • Clue #3: Consumers spend less time with traditional media – to go on the Internet… or not • In 1998, American adults spent an average of 3.7 hours per day watching television. In 2000, this average has dropped to 2.1. <Fairfield Research, Inc. October 2000> ? • “Clearly, the Internet is not the cause of the decline in use of the other media”. <Guido H. Stempel III, 2000>

12. But the way contents are accessed is (3) • Clue #4: Consumers use a combination of media to get best coverage of a topic • Internet users in Hong Kong have been swarming to soccer-related websites in the run up to the World Cup. Traffic to sports sites hit an all-time high of 478,800 visitors during the month of March. NetValue, March 2002 • Clue #5: Consumers want interaction • The number of people playing online games will increase six-fold, reaching 114 million by 2006. DFC Intelligence, June 2002 • “Six months ago interactive TV was in its infancy, but these latest statistics prove that digital TV simply isn’t a niche market. It proves what we’ve been saying all along, that if you create services that are simple and easy to use people will use them”. Scott Gronmark, Head of BBC’s Interactive TV

13. But the way contents are accessed is (4) • Clue #6: Consumers use what is available – legal or not • Around 1.45 million Internet users in Japan have used file-swapping software to download music files. They have illegally downloaded 75 million music files from the Internet since May 2001. <Recording Industry Association of Japan, June 2002>. • Gnutella, the unstoppable Napster… and much more. Developed by teenagers who did not like what happened to Napster, this piece of software gives a hint on the growing irrelevance of intellectual property battles, at least in their current form.

14. So what is it the Consumers want? -1 • A set of multimedia access tools adapted to needs: • One adapted to each type of room at home / at the office • One for taking around everywhere • One adapted to each type of public place (indoors/outdoors) • Etc…

15. So what is it the Consumers want? -2 • The possibility to search, select, program and view/use/perform entertainment and/or edutainment and/or infotainment and/or contact whenever, wherever and however desired

16. So what is it the consumers want? -3 • For any subject of interest, the possibility to hear, see, read, ask questions, get specific help, share ideas, play, copy, send to others, buy, sell, meet…

17. Molecularization The Wheel of Time is spinning! “The potential for service aggregation is expected to grow exponentially as our technologies (and our imaginations) allow us to become ever more adept at another new concept known as microsegmentation.” Lloyd Darlington, Blueprint to the Digital Economy, 1998 Each consumer is a market segment of one

18. A key word: Personalization • New technologies for personalizing television, including behavioral profiling products that enable service operators to understand TV viewing behaviors and predict which marketing offers will appeal to each viewer, are a core part of the interactive television platform because they can drive revenue-generating services, such as targeted advertising, t-commerce, targeted video and pay-per-view, or other customized information services. Network operators that incorporate personalization capabilities into their services now gain valuable control over consumer knowledge, enabling them to drive advertising, programming and other relationships, and ultimately become the “traffic controllers” for new TV services. “TV Personalization: a Key Component of Interactive TV”, The Carmel Group, Oct. 2001

19. Globalization The wheel of time is spinning “The Net has the unique -and somewhat paradoxical- ability to break market segments down to the individual while simultaneously reaching and uniting a global audience. In effect, what it does is make geography both relevant and irrelevant as an organizing principle.”Chuck Martin, Blueprint to the Digital Economy, 1998 A consumer may want to view on a British site a Singapore-produced feature on Guatemala

20. Another key word: Multi-linguism English is no more the language of the Internet. The virtual world is fast becoming as diverse and multi-lingual as the real world. This means that all producers of information must make it multi-lingual if they want to be successful. GlobalReach 2002

21. Have you imagined a world where… • The loyalty to a single media, a single provider, a single tool, is irrelevant • The words “TV”, “Radio”, “CD”, “Telephone”, “Newspaper” have disappeared • Geographical, linguistic boundaries have disappeared • No two people view the same information at the same time • Media categorization is replaced by content categorization Wild dreams… or shortly upcoming reality?

22. Innovation is certainly needed… But… “The problem is never how to get new, innovative thoughts into your mind, but how to get the old ones out.” Dee Hock, Chaos Management

23. Innovation The Wheel of Time is spinning “Have you changed civilization Today?.”HP banner add New tools may be needed. But it is a new mindset that will make the difference

24. Are you really questioning the media paradigm? • Each media organization struggles to adapt to new technologies, goes cross-media and/or cross-content category, but keeps the same basic idea: • The consumer should be enticed to choose them, and stay with them faithfully, and should not go and see the competitor • “While everything may be better, it is also increasingly the same”. Paul Goldberger, chief cultural correspondent, New York Times Result?

25. You know what your problem is? • The greatest dangerfor most of usis not that our aim istoo highand we miss it,but that it istoo lowand we reach it. Michelangelo

26. Riddle for your survival • 38 years after its introduction, radio first attracted 50 million listeners • 13 years after its introduction, television first attracted 50 million viewers • 4 years after its introduction, the Internet first attracted 50 million users Yahoo! Internet Life as reported in Brill’s Content, March 1999 • All consumers are waiting for the “all-media-in-one” tool. How long do you think that tool will take to attract 50 million users?... And what do you think will happen to the media that will not have been prepared for it?

27. Will you still be here – in 90 days from now? Thank you! http:\\www.prasena.com contact@prasena.com