2. Today’s breaking news: a digital revolution, with impact factor 10, hit the media sector yesterday… Prof. dr. Caroline Pauwels VUB / IBBT-SMIT

3. HEADLINE 1 Historians report a new era,Historians report a new era, driven by ICT innovationdriven by ICT innovation

4. The infrastructural networks are the platform for change & competitiveness THE AGE OF INFORMATION TECHNOLOGY Global digital telecommunications and ICT support networks Electricity, telephone, highways and airways THE AGE OF OIL, THE AUTOMOBILE PETROCHEMICALS AND MASS PRODUCTION THE AGE OF STEEL ELECTRICITY AND HEAVY ENGINEERING Transcontinental communications: Steamships, railways and telegraph THE AGE OF RAILWAYS COAL AND THE STEAM ENGINE Railways, penny post and telegraph THE “INDUSTRIAL REVOLUTION” IN ENGLAND Canals, turnpike roads and mail coaches Innovation curves (Carlota Perez) Source: C. Perez

5. The infrastructural networks are the platform for change & competitiveness THE AGE OF INFORMATION TECHNOLOGY Global digital telecommunications and ICT support networks Electricity, telephone, highways and airways THE AGE OF OIL, THE AUTOMOBILE PETROCHEMICALS AND MASS PRODUCTION THE AGE OF STEEL ELECTRICITY AND HEAVY ENGINEERING Transcontinental communications: Steamships, railways and telegraph THE AGE OF RAILWAYS COAL AND THE STEAM ENGINE Railways, penny post and telegraph THE “INDUSTRIAL REVOLUTION” IN ENGLAND Canals, turnpike roads and mail coaches Source: C. Perez Innovation curves (Carlota Perez) 1.New entrants, new products & services and new organizational principles 2.Search for new business models 3.Old actors refuse to adapt disappear!

6. during this presentation: A REVOLUTION? show us the figures! 14.000.000 status updates 60.000 new photos on Flickr 260.000 music streams on Pandora 26.000.000 videos viewed on YouTube 2.000.000 tweets

7. IT’S ALL ABOUT CONNECTIVITYIT’S ALL ABOUT CONNECTIVITY HEADLINE 2

8. In 2020 6,8 connected devices per person By 2020 more than 50 billion connected devices The number of mobile devices will exceed world’s population by 2012 In 2014: 50% of the households will have a smart TV connected to Internet A connected device revolution

9. HEADLINE 3 CONVERGING YET CLASHING:CONVERGING YET CLASHING: NEW ACTORS APPEAR, OLD ONES REFUSING TO ADAPT DISAPPEAR

10. Innovation leads to explosion of ever new players at a never seen pace: Google barely 13; Youtube 7; Spotify 6, Facebook 8 Innovation comes mainly from global, US based and ICT driven firms… Who prosper on creating convenience of use rather than on creating original content

11. Innovation creates shifting power relations between (1) media companies, (2) telcos, and (3) consumer electronic companies Media industry Content creation, contribution and production technology Consumer electronics industry Consumer platform and application technology Telecom Industry Media delivery technology Source: Technology Strategy Update, based on Lieven Vermaele, EBU 2011 Battle for the consumer Struggle for big data Monetization? ?

12. Content industry networks: cooperation, consolidation, concentration? Source: Future Of Media Report, Future Exploration Network, 2006

13. HEADLINE 4 CONTENT DRIVEN REVOLUTION, YET ABUNDANCE & OVERLOAD

14. 2009 26hrs/min video on youtube 2010 35hrs/min video on youtube 2011 48hrs/min video on youtube years of content every day >> 8 billion videos consumed daily 3 photos/sec 60 iPhone 4 most popular camera on Flickr trillion of video playbacks on youtube (in 2011) 1 35,2 % of all pirated items are movies billion minutes called/day 1. 3 million eReaders sold in 2011 14. 7 billion movies legally consumed through streaming In 2012 3. 4 billion photos taken in 2011 380 million hours spent on online gaming in 2012 407 + 22 million groupons sold in US alone

15. Service and apps revolution Towards an app-economy: –Apple app store: 659.936 total active apps, 532 app submissions/day –More than 24 billion downloads (in less than four years) –“App economy” has created about 466,000 jobs in the US alone –Apple paid over $4 billion to app developers Social media as the new service –More than 900 mio users on Facebook –1 in 7 minutes online are spent on facebook –600 tweets a sec – 50 mio / day –Social media (27,8%) equally used as newspapers (28,8%) as news source

16. Abundance vs. attention as a scarce commodity Selection made through friends and trusted brands or are filtering algorithms the new gatekeepers? Is qualitative, long term creative content a scarce commodity in Europe? Who will pay for that?

17. HEADLINE 5 CONSUMER IN THE DRIVER SEAT: ?CONSUMER IN THE DRIVER SEAT: ?

18. Consumer evolution Homo digitalis entered the scene: consumption of traditional media declines –More ebooks than printed books sold on Amazon Right here, right now: towards an on-demand consumption –Rise of video-steaming services, VOD and time shifting –Mobile consumers watches more media on their mobile devices than on their TV-set Snack-culture: fast consuming A multi-device / multi-screen use –From PC over tablet to smartphone –Simultaneous use (eg. second screen)

19. Out of control?  Old habits die hard, but some very disruptive behavior  P2P downloading & Piracy  In times of abundance -> lower willingness to pay  Ad skipping  … In control?  UGC and pro-ams: the amateur & the professional meet  Techno savvy consumers  Trend to legal payment models  Personal data about consumer as the new currency vs privacy considerations  Internet anti piracy regulation vs freedom of expression  …

20. HEADLINE 6 MONEY MAKES THE WORLD GO AROUND: ABOUT ANALOGUE POUNDS & DIGITAL PENNIES…

21. Perception of internet as free Ads are everywhere: deflationary pressure on value of the ad product Subsidies stabilized, but pressure Legal pay models on rise: 10 Euro limit Crowd financing… If economic relapse -> pressures raise on R&D & ads Revenues probably will have to be based on AND, AND & AND scenario: Is revenue diversification worsification? Media sector definitely in need of new organisation models: costly, yet also, new opportunities to create, monetize.. Annual revenues mobile/internet advertising – IAB (2012)

22. The good old days are over…. But the best is yet to come! Thank you! Have a nice conference! cpauwels@vub.ac.be