Key Digital Media Trends and Events of 2007

– Predictions for 2008

During 2007, the pace of digital media-related events quickened, and it appears likely to accelerate in 2008. For example, just imagine all the announcements we’ll be hearing about portable products that have Wi-Fi and/or WiMAX built-in.

Broadly speaking, there were three major trends:

1. Content owners – record labels, TV networks, studios and musicians – began using the Web to offer content directly to consumers. Think Radiohead, Disney, ABC TV, BBC, ITV, Channel 4, NBC and Fox.

2. The era began for digital media-capable mobile devices that always have a high-speed, wireless Internet connection. Some predict that the number of hours of content delivered to mobile devices will exceed what’s delivered via wireline broadband to the home in a few years.

3. User-generated content increased in popularity as social network sites, both on the PC and on mobiles, added video sharing. Nokia estimates that as much as 25% of the entertainment that’s viewed on mobile devices will be user-generated.

Among the more significant events of 2007 were:

– IPhone and iPod touch. These products seemingly generated more press coverage and buzz than all other events combined. (Wonder what Uncle Steve has in mind for us at next month’s MacWorld?)

– Google’s free Android operating system for mobile devices. Google pulls out all stops in its efforts to get its ad network on every Internet connected device.

– Verizon Wireless declares an open mobile Internet initiative. Oh pray that it actually happens. There are skeptics. After all, Verizon Wireless is the company that turned down Apple’s iPhone.

– Nokia’s launch and expansion of its Ovi portal. The world’s largest handset maker commits to becoming the world’s largest purveyor of Internet products and services for mobile devices.

– US and UK TV networks show new episodes of their TV series on the Net. Was there ever a louder bell proclaiming the decline of traditional broadcasting?

– The NBCU and News Corp Hulu joint venture. Lots of smoke, but not much substance… yet.

– BBC’s iPlayer service. Shows the way forward for delivering current TV episodes.

– Joint venture by BBC, ITV and Channel 4. The largest UK TV networks band together to create one Web portal for all three to offer current and “curated” episodes.

– Verizon’s fiber-to-the-home and 100 Mbps effort. Its FiOS service attempts to drag about 10% of US homes into the 21st century.

– US cablecos demonstrate technology capable of 150 Mbps to the home over their existing infrastructure. If successful, it could force telcos to accelerate their fiber network deployments.

– Radiohead, others bypass labels and begin selling their music directly on the Net. Why not? There’s a worldwide market of millions of music lovers who are online daily.

– Development and deployment of next-generation mobile networks that will offer high-speed, mobile and open-to-all Internet access. Sprint, Google, Intel, Cisco, Motorola and Samsung lead the charge to deploy WiMAX-based networks as direct competition to existing mobile operators.

– Amazon and others offering DRM-free tracks from the major labels. The beginning of the end of the copy-protected music era, just as Apple’s Steve Jobs had forecast.

– Apple loses out on Universal Music’s DRM-free, high-quality music tracks and NBCU’s TV shows. ‘Nuff said.

It’s certain that 2008 will start off with a bang. CES, January 6-11 in Vegas, will have gazillions of announcements. Apple and Steve Jobs will have some surprises the following week at MacWorld, January 14-18 in San Francisco.

Among the trends we expect to see in 2008 are:

– A flood of portable devices – from mobile phones to digital cameras – with Wi-Fi and/or WiMAX built in.

– Significant advancements in wireline broadband technology as the world’s telcos and cablecos begin to realize that every home will need a 100 Mbps pipe.

– Lots of activity in wireless Internet access – from bids on spectrum to build-outs of WiMAX networks to existing carriers opening their networks to continued attempts to use Wi-Fi in wide-area networks.

– More content owners bypassing their traditional media distribution methods and offering their goodies directly to consumers on the Web.

– Google’s initiative to make its ad network available on every Internet-connected device and its continuing launches of online products and services to attract eyeballs.

– Software applications, information services and consumer data will increasingly be Internet-based, making it available to consumers wherever they are and reducing the need for hard disks in mobile devices.

Looking back at what happened in the digital media realm in 2007, and looking forward at what’s likely to happen in 2008 (starting with a slew of announcements at CES in a few weeks), one can’t help but wonder what techno-surprises are in store for us in 2009, 2010 and beyond. And we can’t wait to find out.

KPN, Bankinter

Bankinter, a Spanish bank, has made a deal to use KPN’s network and services to provide mobile phone service at a special rate to its banking clients.

G8wave, AEI, Alchemedia

G8wave, an integrated mobile media company, has teamed with AEI and Alchemedia to bring Metallica to the big TVs of Shibuya, Japan. These will display ads for mobile content like music videos and ringtones.

50% of US Mac Users Paid to Download Music v 16% of PC Users

The NPD Group released data that says consumers who own Macs are much more likely than PC users to pay to download music. NPD quarterly releases its Digital Music Monitor, and in the third quarter of 2007, it said that around half of all Mac users have paid to download music from iTunes and other similar sites, but only 16% of PC owners have done so. Mac users were also more likely to purchase CDs, with a little over 32% of Mac and about 28% of PC users reporting buying CDs in Q3.

A thing to keep in mind about these results, however, is that Mac users make up less than 10% of the total PC market, so it takes a tremendous amount more PC users to hit that 50% mark than it does Mac users.

“There’s still a cultural divide between Apple consumers and the rest of the computing world, and that’s especially apparent when it comes to the way they interact with music,” said Russ Crupnick, VP and entertainment industry analyst for The NPD Group. “Mac users are not only more active in digital music, they are also more likely to buy CDs, which helps debunk the myth that digital music consumers stop buying music in CD format.”

NPD’s data shows that the unit-volume sales shares for Macs increased from under 6% in 2006 to almost 9% for this year, January to October.

Around 56% of Mac users listen to music on their computers, while about 31% of PC users do. Mac users were also proportionally more likely watch videos on mobiles and their computers.

“The more consumers become comfortable paying for digital music, the more chance they will evangelize to others. And at this point in the game, it’s the growing base of Apple consumers that are the industry’s low-hanging fruit when it comes to converting from physical to digital music,” said Crupnick.

kwiry Launches Mobile Message Services

Kwiry launched its mobile and Web reminder service last week, along with showing off a text-based platform for publishers, advertisers, TV stations and radio networks. Using kwiry, people can text personal reminders via mobile device to their online account and e-mail. Once registered at kwiry’s site, users simply text a message to 59479 (KWIRY), and it is stored for the user. The service is easily integrated into sites like iGoogle, MyYahoo and Facebook.

“We built kwiry to help people remember things,” said kwiry CEO Ron Feldman. “But it does more than just store lists. People can easily view search results for their kwiry texts from many different Web sites and share their favorite results with friends.”

When at the Web site, a single click can turn your reminder into search results from places like Google, Yahoo, Wikipedia and others. Users can also mark searches as favorites and can join the community at kwiry’s Web site by adding photos, profiles and comments.

Kwiry is also using this to tap into some revenue from the Web sites and services themselves. Partners can use kwiry’s platform by placing codes in their shows or publications, and asking their audience to text to 59479. The users are then asked for their e-mail, and when they reply they are sent a link to the partner’s site. This works whether or not the texter is a kwiry user, but if he is, the link is saved to his kwiry Web page and can be used and shared with others.

“Currently, companies must use confusing URLs to drive people to specific content on their Web site. Kwiry gives partners a way to drive offline audiences online immediately with a simple text message,” said Feldman.

GamePro Magazine is currently using kwiry to help drive its print audience to its GamePro.com site. HGTV is testing the kwiry application for its show “Don’t Sweat It,” hoping to send users to HGTV.com for project information and complementary videos. They can measure results through online reports or Omniture’s Site Catalyst, a site analytically integrated with the Kwiry platform.

Text messages are reaching into the billions each month, but very few markets have tapped into it. Kwiry offers this niche service touting no new software needed and no additional fees.

Vodafone Spain, Openwave Team to Improve Mobile Net Experience

Vodafone Spain recently chose the OpenWeb application from cell phone browser firm Openwave Systems to provide mobile-formatted Web site content.

OpenWeb is an Internet browser designed to deliver full Internet pages in a user-friendly format to any mobile data-enabled device. It actively defines portions of Web sites as relevant and then places the most relevant information in the first or second segment, increasing the rate at which users get pertinent information.

Hari Haran, senior VP of worldwide field operations for Openwave, said, “Our OpenWeb and security solutions are building on our unparalleled mobile access gateway expertise, market leadership and strong relationship with Vodafone.”

Openwave Secure Content Management (SCM) offers a multiple protocol, multi-service protection for messaging, browsing and downloads for mobiles. Openwave SCM and OpenWeb are designed to support and protect increased mobile Internet traffic, while enabling new servers and applications for merchants and advertisers.

Thumbplay, iLike Offer Ringtones to Social Networking Platforms

Mobile entertainment content destination Thumbplay and social music discovery service iLike have joined together to provide Thumbplay ringtones through iLike.com and iLike’s Facebook application. “With the addition of Thumbplay ringtone links, iLike has just expanded our music discovery features to include also a fantastic ringtone-discovery experience. As the mobile entertainment content industry leader, Thumbplay delivers the broadest and deepest catalog of content to our 15 million registered users, so they can now take their music with them as ringtones regardless of which carrier or phone they’re using,” said Ali Partovi, CEO of iLike.

Thumbplay has some 75,000 pieces of mobile content that includes ringtones, wallpapers, games, videos, voice tones and texting services.

iLike’s social music discovery service is the top ranked app on Facebook with 15 million registered users. The app lets people share music recommendations, playlists and customized concert announcements.

Helio Devices Cooperate with PCs through Helio Player

This week Helio released its Helio Player, a PC application that lets users manage their music, video and picture collections on their PC and transfer them to and from Helio devices through a USB connection. This comes with no additional charge to Helio subscribers, and is an extension of Helio Music.

“Helio Player is designed to make it easier than ever to use Helio’s premium devices as portable multimedia players,” said Rob Gelick, VP of media and community services at the MVNO. “The intuitive design, inclusion of the Helio Music Store and ability to manage a personal library of music, videos and photos gives members new options for enjoying their entertainment on the go and sharing their favorites with all their friends.”

Helio Player was developed through a partnership with RealNetworks, and it is the first PC application from a US carrier that involves importing and managing data from a mobile. The application also allows users to buy the tracks from the Helio Music Store either via the PC or mobile and then transfer them to the other device. One interesting feature from the Music Store is the Gift/Beg option, where users can buy songs for friends or ask for music from other members.

The Helio Player is free and compatible with Windows XP and Vista and the Helio devices Ocean, Fin, Drift and Heat. Songs bought on the PC are generally 99 cents, while songs bought through the mobile run about $1.99.

Firefly Mobile Plays Nice With Kidz Bop

Firefly Mobile, a US company that specializes in developing and manufacturing mobile products for children and teenagers, has signed an agreement with Kidz Bop LLC, producer of the “Kidz Bop” children’s audio series. The two are partnering to enable kids to download Kidz Bop content like videos, ringtones and wallpapers to Firefly Mobile’s newest phone, the flyPhone.

“The new flyPhone gives kids and tweens another way to enjoy mobile entertainment created especially for them…parents can be assured that their kids and tweens are finding age appropriate material at the flyStore,” said Patrick Marry, CEO of Firefly Mobile.

The flyPhone features a MP3 player, video player, camera, games, customizable ringtones and wallpaper that are age-appropriate for their target market. The Kidz Bop content for flyPhones will be made available through Firefly’s online store “flyStore.”

Kidz Bop has been the top children’s music series from 2002 to 2006, according to Billboard. Kidz Bop, which has sold 10 million CDs over the past six years, is a compilation of current popular songs sung by kids in order to create a child-friendly tone.

Orange Brings Setanta Football to Mobiles

Orange has become the first British mobile network to offer sports programs from Setanta, a pay-TV service, making Orange’s mobile TV the only one to offer all the televised Barclays Premiership football (soccer to the US folks) matches.

For £5 a month, customers get access to Setanta Golf and Setanta Sports 1 and 2. Orange already has a partnership with Sky’s mobile TV, so if users don’t mind paying for both they won’t miss a single Barclays Premier League match. Setanta signed one million premium subscribers within four months of its first Barclays Premiership season.

“No serious football fan would risk missing his team’s progress this season and the deal with Orange means that need never happen,” said Timothy Ryan, Great Britain marketing director for Setanta Sports.

Setanta has also snatched up rights to most of the away-game qualifiers for the 2010 World Cup for England, Wales, Scotland, Northern Ireland and the Republic of Ireland. Setanta has secured the right to show the FA Cup and England’s home international games for next season.