Frictionless Futurists at MIPCOM

I was privileged to be invited to the Digital Minds Thinktank late last week, a meeting of about 40 key players in digital media from around the world at MIPCOM in Cannes.

The goal of the summit was to look at specific issues that exist between traditional media organisations in the face of the tectonic shifts that the digital revolution is bringing. The buzzword for MIPCOM and possibly for the next year seems to be "frictionless". Mark Zuckerberg talks about "frictionless sharing". PayPal talks about "frictionless transactions". "Friction" is a bad word now, except of course for exotic condom manufacturers who will be wondering whether new packaging might be required for the proverbial digital generation.

The event was introduced by the futurist Gerd Leonhard who introduced the concept of Frictionless Society. Futurists are a funny breed. As Gerd put it: "We spend out time looking at what's going to happen in the future, and then thinking about it."

The problem with futurists like Gerd is that there is no timeline of when these cloud-based media companies or flying cars will arrive. And of course this is the information that everyone in the room wants to know. He had some good one-liners ("social networks will become cable TV without the cable") and others less good ("...connecting the cloud with the crowd"), but no concrete timing on when the future will arrive.

In conversation with the other executives afterwards, all the strategies for digital seemed to revolve around the use of video as the base content. While video is certainly an important part of digital growth, it is a small element in the overall digital revenue picture.

At our ThinkTank, representatives from YouTube console content owners that Google is "just here to help". YouTube is undoubtedly growing fast (3bn views per day up from 2bn views per day last year). The issue I have is that while Google, Facebook and Apple are increasingly powerful media distributors, they are not media companies. In the case of Apple, it is a hardware company. It the case of Facebook and Google, they are search and advertising companies. These companies are not commissioning new content in the way that creates new programming as a traditional network or film company would.

As I touched on in my last post, this is not an issue until a greater digital reach can be achieved than on television. At that moment, a brand will see that measurable media provides the perfect alignment of reach, frequency and engagement with absolutely accurate campaign reporting.

This moment is not far off. One of the projects that we worked on recently was last year's ABC show Making Australia Happy, whose website was built by The Project Factory. The number of viewers of the website reached par with the number of viewers of the show earlier this year, and the site's levels of engagement still remain marketedly high. Had this been a commercial proposition, a brand's involvement on the site would have got greater reach via the website than the TV show, and with more return visits from the viewers.

While television viewing is stable overall, and has even increased as whole over the past few years by up to 3% in Australia and overseas, the definition of what quantity of viewers makes a hit show has decreased. As time-shifting, catch-up and rapidly increasing download options close to the broadcast window increase, so this first-run viewership, and thus reach, will diminish.

In a coincidentally useful piece of scheduling, the next morning I was part of the PwC Strategy Forum for what leaders in media should do in the face of the changes in the media industry. They were very clear that their 2015 figures show a revenue impact by digital on traditional television subscription or license fees of only 10% (approx. $25bn digital vs $250bn).

Personally, I believe these numbers are more likely to closer to 30% of television revenues from digital by that time given the flowering of IPTV and online television services away from the current incumbents.

As they quoted Comcast from last year: "The more experience we gain with addressable advertising, the more are excited we are with its potential to transform TV".

The simplified management mandate that they recommend, and which I would suggest applies to management teams across brands, advertising and media industries, is that "traditional players need to start behaving like new entrants", in an impatient, collaborative, and future focused organisation.

When digital media overtakes the reach that television currently provides, a point of no return will have been reached. Advertising logic would indicate that brand dollars will be placed on digital rather than television from this point. Given the rapidity with which this point will occur, and the lead-time that it takes to create original digital transmedia content, it would make sense for brands, Google, Facebook, Apple and portals to start commissioning new content, learning, experimenting and growing audiences as early as possible.

This article was first published by AdNews, October 2011