By Bruce May, July 2008  

              Digital media, in its broadest meaning, refers to all media that is created, captured, stored or delivered in a digital format.  This includes all traditional forms of media including print, radio and television.  In fact, with the passing of analog technologies virtually all technology is digital.  This broad definition leaves us unsatisfied.  Films shown at your local theater are shot on digital cameras with special effects computer generated in a digital format but as a practical matter, most of us think of this simply as a movie and not as digital media.

What most people mean when they think of digital media is more accurately described as broadband media which is any media in a digital format that is delivered over a broadband infrastructure.  This includes both the Internet and private networks.  The underlying infrastructure can use fiber, wireless, satellite systems, computer networks or any combination of these.  We prefer this more restrictive definition of digital media because this denotes the digital ecosystem as it is most commonly understood.  Of course we need to keep in mind that digital content can also be transferred by any type of memory card or device as well so distribution is not limited only to broadband connectivity.  Before we look further into the digital media ecosystem, let’s stop and take a look at the market itself

Market Views

The market for digital media solutions is broad, wide, deep, and mostly uncharted.  There is value in looking at this evolving market from different viewpoints.  Here are two ways to categorize the marketplace that give some insight into what is quickly evolving into a new and massive industry.  The first looks at categories based on types of solutions.  It is worth noting that most of these categories did not exist at the end of the first dot com era and more are likely to be added as the Internet continues to evolve. 

Markets Categorized by Solution:

      Broadband Television Entertainment      Interactive News and Information Media      Marketing Solutions      Social Network Solutions      Organizational Communication Systems (Blending Broadcast & Conferencing)      Distance Learning Solutions      Emergency CommunicationsThe second way of looking at the market is more traditional set of categories based on industry sector.  Obviously these segments can be further subdivided as they grow.  Already, Entertainment can be broken into news, sports, live events, films, broadband television and other more exotic slices that drill down into niche markets that are only now emerging.  This list is a very high level breakdown into the main segments.  It is useful primarily in emphasizing the importance of markets other than entertainment which continues to capture most of the attention of the solution providers.

Markets Categorized by Industry Sector:

• Entertainment
•  Marketing & Advertising
• Corporate
•  Academic
• Government
• Organizations, NGO’s & Non-Profit 

Who Uses The Broadband Highway?

Another useful way to look at the emerging digital media marketplace is to specifically look at the major users of the broadband highway.  We split these into two broad categories, public and private sectors.

Private Sector

• Broadband Television Networks
• Live Event Producers
• Social Networks
• Brands & Advertisers
• Advertising Agencies
• Corporations
•  Small & Medium Size Businesses
• Private Learning Companies
• Organizations (Foundations, Non-Profits, NGO’s)

Public Sector

Government Agencies (Federal, State, County & Municipal)

School Districts {K1-K12}

Academic Institutions {Higher Ed & Research Institutions}

Police Departments

Military/Homeland Security 

The Role of Video in the Broadband Revolution

These are all useful ways of looking at the market but they overlook the single most important trend driving digital media today and that is digital video.  Online video has recently matured, brining the film, television and video production industries online resulting in the complete transformation of interactive media.

Video is driving the current development of online content, transforming media solutions and impacting the entire ecosystem of businesses providing services to broadband media companies.  The expansion of traditional broadcast television into broadband distribution is accelerating the evolution from Internet 1.0 to Internet 2.0 systems and applications.  Markets include entertainment obviously but they also include brand marketing, corporate and government communications.  This growing marketplace includes new players that have not previously had access to video distribution channels because of the overwhelming cost of traditional media distribution.  The ensuing years will provide a greatly enriched set of solutions offering more effective interactive advertising, greatly improved user interfaces, powerful distance learning tools, and in general, will create a more dynamic environment supporting interactive communications in all its forms.   This will result in widespread disruption of business models, as it already has, and create opportunities for new solutions that drive new business models in this rapidly evolving ecosystem.   Winners will include advertisers and brand marketers who find new ways to reach and interact with existing and potential customers; private and public learning institutions who create new ways to deliver educational content with a higher level of interactivity; corporate and government organizations that embrace communication strategies that emulate broadcast practices; entertainment producers who create entire new distribution strategies; and consumers who join expanding social networks and participate in content creation. 

The Digital Media Ecosystem

We take note of the growing role of video in the evolving broadband marketplace and the need to make a fundamental distinction between applications and content production.  Video production has been a poor step child in the history of the Internet.  This was due to the lack of bandwidth in the early years that prevented high quality video steaming or high speed downloads of video content.  Streaming video at 56Kbs was a bit of a joke even inside the Internet Industry.  In traditional film and television it was not even worth considering.  This all changed with the advent of high speed bandwidth and the evolution of businesses providing the necessary supporting infrastructure to deliver high quality video in a usable form.  Several pioneering companies, including The Platform, Narrowstep, Maven, Whiteblox, Brightcove and others ushered in this new age of broadband television.  The early years of streaming video are over.  In 2008, all the major networks and most, if not all, of the cable channels have embraced broadband distribution of full length programming.  The advertising solution necessary to support these efforts is the last piece of the puzzle that is now being put into place that will make broadband television an accepted part of the television and film industries.  Even to suggest that this would happen a few years ago was heresy in those industries.  Those of us who have been working to help bring this about cannot help but smile as we see this vision becoming a reality.   

             So let’s turn to the evolving digital media ecosystem and see how far it has come.  Having made this important distinction between content and applications, the ecosystem can be described in terms of the following four quadrants.  On the one side is the infrastructure including everything that content owners need to support the delivery of their content.  This includes the Internet “pipes” themselves which can be telephone wires, fiber, an electric grid or wireless technologies.  It also includes all the broadband service companies that provide the servers and supporting services that make it all work. Most importantly today, it also includes the growing number of application providers.  These are the companies that supply the technologies that control how content is ingested, managed, organized, and delivered within an interactive environment.On the other side of the ecosystem are the content aggregators and content users.  These represent the market segments discussed above.  In between these two sides of this ecosystem are the companies that create the content to begin with.  Many Internet oriented business people tend to lump content aggregators and content producers into one category.  This overlooks the most salient point about the nature of the driving force in the Internet today.  Video production has been looked upon as a simple thing that anyone can do.  Simply listen to the Internet pundits that point to MySpace and explain how anyone can create content.  It is simple and easy to produce… right.  All we can say to this is that they obviously know nothing about real video production.  The film and television industries spend millions of dollars creating content, sometimes spending that much on a few hours of finished production.  Trust us, it’s not that easy to produce quality content.    As the broadcast industry steam rolls over the Internet it is bringing its culture, values and ways of doing business along for the ride.  In Internet 1.0, the only advertising products were banners and the pre-roll which could support only short form content.  Now that the television industry is joining the party they are bringing along their favorite ad product, the interstitial video commercial.  Of course now it will evolve into a more complex, interactive product.  The point is that long form content can be supported with interstitial advertising.  All attempts to create other solutions based on interactive banners or ad products embedded in pages next to embedded video players will fall short of this broadcast ideal. Looking at the digital media ecosystem in light of this understanding it is clear that production will play a central and crucial role in the evolving standards and practices of not only broadband television, but also all forms of rich media content.  The other part of content production comes from traditional Internet solution providers, namely web developers and interactive agencies.  Together, these production companies are coming together to create a whole new generation of content that will be unlike anything seen before in either the online industry or the broadcast industry.  Some of this content will look more like traditional television and some will look more like traditional web content.  In between these two extremes expect to see a whole new variety of solutions appearing as the new digital media ecosystem diversifies into a richly exotic landscape.            Here are the four quadrants of the digital media ecosystem as they have been described:

 

 

Revealing the Landscape inside the Digital Media Ecosystem

Let’s come down from the 50,000 foot view and take a closer look at the current landscape inside the digital media ecosystem.   In the middle are quite simply the two production industries representing video and interactive.  On either side there is already a rich array of solution providers and content users.

Revealing the Landscape inside the Digital Media Ecosystem

Let’s come down from the 50,000 foot view and take a closer look at the current landscape inside the digital media ecosystem.   In the middle are quite simply the two production industries representing video and interactive.  On either side there is already a rich array of solution providers and content users.

 

The key questions you should be asking yourself are, “Where do I fit?” and “Who do I need to talk to?”  The first question is fairly easy to answer simply be referring to the above graphic.  The second question requires a little more understanding of the marketplace, particularly in regard to the technologies that support the applications you need to use to fulfill your needs.

 

Understanding the Role of Broadband Technologies 

One of the growing challenges in this complex ecosystem is the ever changing set of technologies available to support new media content providers.  New technology solution providers disappear as fast as they come along, either because of flawed business models, competition from lower priced solutions or because their technology is so attractive that it is bought up by major players in the market who often cannibalize the technology for their own ends.  This creates an almost impossible task for individual agencies, content producers and organizations to assess new technologies and integrate reliable solutions.  Even agencies that have their own interactive departments are not able to spend the time necessary to become expert in this ever changing technology environment.  At the same time, the entire advertising industry is increasing its use of new media as it reduces spending on traditional media outlets.  The need for agencies to understand, create and deliver Internet 2.0 solutions will increase the demand for expertise in the latest technologies and in the business models that use these technologies.  Agency clients are increasingly demanding new media solutions and need to provide expert advice on understanding and implementing these solutions.  Content producers and communicators in both public and private markets face the same challenges.