Both Kevin and I are going to be spending the next couple of days at the WeMedia conference examining citizen journalism, the media and trust. Organised by the BBC, Reuters and The Media Center, it hopes to shed some light on participatory media and help mainstream news companies understand what they need to do to thrive in this shifting news landscape.

OK, so that’s how I wish it was. Instead, look at the schedule and shout Bingo! When you see a real, honest to goodness blogger.

Quiet, isn’t it?

The thing I am worried about is that this is going to turn into a happy clappy back-slappy smugfest, with the Beeb and Reuters competing to see whose day (they each have one) has the biggest names, who can draw the biggest crowds, and who trusts who most. They already have a survey that they’ve completed, and which they’ll be promoting at the event, which shows people trust national TV news the most and bloggers very little. So much for ‘citizen journalism’ being a symbiosis of equals – this sounds more like ‘we Media, you Jane’.

But if you were one of the people who took one look at the $795 price tag and winced, you can still participate and, indeed, I would encourage you to do so. You can watch the video feed, listen to the audio feed, monitor the blogs (including the various official ones), an take part in the backchannel. Your IRC choices are going to be an in-browser client or #wemedia on irc.freenode.net.

I am participating on both days as an Online Curator, so will be on IRC, and in as many other places as possible online, looking out for comments to feed back into the mix. I think I get to sit on stage at times and ask difficult questions and quote people’s opinions, so I’m depending on you to give me something juicy to work with. Without you, I’ll just end up looking silly, so please do pop into IRC and let me know what you think of proceedings.

I’m also talking at the WeMedia Fringe, where all the cool kids are gonna be, on Wednesday night. The Fringe is fully sold out, so no real point coming if you don’t already have a ticket, but it’s cool that there should be so much interest. I’m going to be talking on the three things that media should be prepared to do before they even think about running any sort of participatory media project.

Right, time to go prepare. See you tomorrow.

wemedia

The distribution of the future

Tamar Kasriel, Henley Centre Headlight Vision.

I’m not a media expert. I did have a stint at the Guardian, but I’ve been at the Henley Centre for nine years, and we try to understand consumer trends.

Was some talk about asking consumers what they want and they ask for faster horses. You can’t ask consumers straight what they want but you can identify trends.

One useful way to think about the future is to see what the trends are now, and then push them, look for the extremes. And what can our response be to those? Try and rehearse what we can do in that scenario so that when the future happens we’ve thought things through and can respond better.

Consumer change and technology are chicken and egg. But any technology has to have a clear benefit in order to take it up. People in this room are not typical – more media savvy, interested in change and complexity, but for the vast majority, if it’s not easy and I can’t see why, I’m not going to do it.

The issues we are trying to grapple with are not new. E.g. 17th C debate on whether Catholic Mass seen by telescope counts. Is that participation?

Era of blind faith, collectivism, command. That has waned, towards individualism. Now moving to reasoned faith, elective, collectivism, contract. Rise of the personal network to navigate these things. Net has been very important in this.

Way we build identity is very complex, and the urge is to simplify. Global homogeneity, diverse locality, cultural boomerangs (stuff that goes away and comes back in a new version), hybrid identity.

World is changing, but every era says that.

Paradox. Time lords vs time slaves. Powerful, in control of out time… but we also end up a slave to time. Money-time trade-off. People willing to spend money to save time. Considering other consumer currencies, info, time, energy, money, space. Not perfectly comparable, but can get a view of how people feel about these resources. People think about money more often, but value time and energy more often.

Always on culture. Pizzled – how you feel when you are talking to someone and they just inexplicably take out their Blackberry and look at it. Pi(ssed off and pu)zzled.

Don’t have weekends anymore in the same way. Great to do chores on the weekend, but our weekends are lost now because we do all the weekday stuff during the weekend. Can be a burn on people.

Impact on news – tyranny of immediacy. Dominance of image culture changes the nature of news.

Going through a revolution in time, comparable to industrial revolution. Prior to the revolution it was about seasonal time, but with a rail network precise time became important, and this was when industrial time happened. now we have a flexible, Dali-esque view of what time can be. Being able to tell the difference between a live event and a time shifted-event becomes difficult.

What happens when time becomes this flexible? Talk about end of prime-time, and it being whenever you want it to be. Already major social changes, such as around the mobile phone, e.g. ‘approximeeting’, where you arrange the meeting on the fly using the mobile phone.

Another paradox. Infinite information vs. simplicity. Infinite amount of information, which is empowering. You can never have too much information, but if you have too much you go insane. The same amount of people say you can’t have too much information, but also they don’t have enough time to process it.

Consumers put up shields and barriers. Consumers don’t want junk mail any more, doesn’t get looked at.

Paradox. Closer to brands vs. distanced from brands. Is this a fantastic opportunity to brands, or are brands just desperately running after consumers who are hiding behind their PVR shield.

Idea that buying a famous brands is good because it ensures quality has declined. Consumers don’t believe that anymore. Not to say that people reject brands, but there is a long-term decline.

We have the tech to move closer to the consumer, brands are saying ‘we’re open’, and when you get up close you find an awful things. Can be dangerous to invite scrutiny.

American Apparel invited a journalist in, but she found out about some malpractice (of a sexual nature).

Some brands might prefer translucent rather than transparent.

Co-creation. Smart, savvy consumer who understands brands. Trust and genuine co-creation hard to create and maintain.

Copernican media revolution vs. commercial redistribution. Is the consumer now sitting in the centre now, or is this just another cycle? Exponential power of consumers, people are increasingly recommending and acting on others’ recommendations.

Democratisation of images. Can create, capture, take pictures. Charged visual culture. More disposable. Important to say you were there, and take a picture. Consumers have a love-hate paradox because we know images can be manipulated but we still value them.

So who’s really running the show? In some ways it feels like just a reorganisation of the big media. You have someone who is able to experiment, create something with an independent DNA, but they get bought by the big media.

In ten years time, the heavyweights will be pretty much the same.

Is this an expanding world? Or shrinking? Diffusion of hubs, wonderful things from round the world. Strong sense of serendipity, following leads, and finding people you’d never otherwise meet. But can create a self-imposed ghetto of taste, that you just find more people like you.

Geography is history vs. local revitalised. Communities of interest, and communities of geography. Location-based services, e.g. bluetooth messages tied to a location. Deepen relationship with physical spaces. Talk to people in shops, at point of decision (i.e. the til). Apartments having their own intranet.

Enhancing human touch vs. eliminating human touch. Older consumers find a lot of digital media very alienating. If your’e less used to it you only use it if you have to. Then others find it a brilliant substitute. But in younger people, it’s not a substitute at all, it is a real relationship.

Real and online worlds blur. People mourning online for victims of Hurricane Katrina was the best way for those people to share their grief. Games are real life, it’s not some sad thing they are doing in their spare time. People raised real money online.

What will humanity feel like? What will it look like? How will you be able to touch your consumers and your customers?

Haptic technology that sends touch over the internet, e.g. lover’s cups – glasses that have coloured LEDs, so when you pick up your glass, their glass will glow and you’ll know when you are both drinking. Or pillows that display the imprint of your partner at a distance as they sleep.

Lots of possibilities. Tendency to pick your favourite scenarios, but it’s worth stretching in all directions including the uncomfortable ones. Not about being right, but it is about being ready.

Will generation iPod change broadcast forever?

Chair: Neil McIntosh

Adam Curry, PodShow

James Cridland, Virgin Radio

Chris Kimber, BBC

Neil: Been described as the podfather. Tell us about the origins.

Adam: It’s a lucky convergence of portable media devices, protocols such as RSS so you can load stuff on to your device, bandwidth, and tools on the user end to create stuff. Tools have been a round for a while. Stuff people are creating eventually wants to get out beyond the DVD or CD that you can burn. So the network connects it, and I think that we had the sexy name, podcasting.

Not as big in the UK as the US, but I think that’s because radio in the US just sucks that much more. Still listen to the radio here. More cultural importance.

Podcasting clearly user-generated medium. My five-fifty rule – within 5 years, 50% of media will be created by the people consuming it.

Neil: The BBC are launching lots and lots of podcasts.

Chris: I think you’re talking about our tightly controlled trial. Have had the BC radio player for four years, and the problem with that is you need to be connected to the internet to listen on demand. the holy grail is to get them portable. In 2004 offered programmes for download, just single-file download. Then podcasting automates that and in those days there weren’t many people doing it, got good feedback. Then strategy – is this a threat or an opportunity. Clearly it’s both. There are only so many hours in the day, and if you’re listening to Adam you’re not listening to the BBC. But we also saw it as an opportunity to make radio on demand portable. Can also reach new audiences, people who think they don’t actually ;like radio, perhaps we can intorduce people to programmes they wouldn’t have otherwise have heard.

Early success is In Our Time, but we reached people who would never have listened on a Thu8rsday morning to that, so we’ve been ableto reach new auidences.

The main thing, as I’m sure we’ll come on to later, is that this is a way of introducing speach radio to people who thought they might not like it. E.g. Chris Moyles’ is obviously a speech radio, although you wouldn’t have sell it like that.

Possibly a way to discover new talent in the future. 20 or 30 years ago it was local or hospital radio. In the future it will be more about formats and ideas and talent.

Neil: Will the BBC do straight-to-pod shows? Or using others’ shows?

Chris: No one’s done it yet but it will be used. E.g. Radio Five Live use it for people to file reports from people abroad.

James; |the ;rationale for Virgin is similar. We should be out there, but more than that we should be making sure that people can hear our main shows, and put our main shows in front of people who might not actually otherwise hear them.

We did 113,000 downloads in January, so there is quite an appetite. I think it’s interesting that the session is ‘personalised radio’, and podcasting is half that. But where podcasting is ubiquitous, wifi is leading to even more personalised radio – listen to Today Programme without Thought of the Day, Virgin with no James Blunt, or Radio 2 with no Steve Wright. Personalised radio would provide customers with what they want to hear – less ‘the music we love’ and more ‘the music I love’. It’s more than just time-shifted and play-shifted radio.

Neil: Licencing stops you putting much music at all on. Are we closer to a solution?

James: My rather trite answer to journalists that ask that question, my answer is I’m not sure why we’d want to. Virgin Radio by and large is very mainstream. Hear the same type of music in the morning as in the afternoon, so there’s not much to be gained by downloading that. Why compete with someone’s iPod which already has their favourite music on it. Perhaps the trick is to give them slices of content to play alongside the music they really like.

Issues with DRM, the iPod issue, is one that will run and run.

Saw great video from ZDNet which called DRM ‘content restriction, anullment and protection’ – the iPod crap is different to the MS crap.

Chris: We have a commitment to specialist programmes, and so those fans would appreciate having more of their specialist music available.

Neil: Podcast-safe music.

Adam: Podcast is liberating – there are no rules apart form copyright. You can say what you want, do it as long as you want. Early on advocated that podcasters not play mainstream music. Don’t want the RIAA to come in and call us pirates and thieves, which all consumers are to them.

People in podcasting want to be the next Chris Moyles, they have something to say. They want to be the next James Blunt, because they want to make music. And they own the copyright.

So created the podsafe music initiative. Band heard in NY, good music, played on podcast, got picked up, and people started buying the band’s CDs through CD Baby. Good opportunity to pair up with bands.

US radio is so dead. No social recommendation ‘I fucking love this record and I’m going to play this every day til you do to’.

If you take 1000 podcasts, with an ave. of 1000 listeners, and you take one song and you have a million audio impressions of that song. We’re selling them now as MP3s, and we purchased the music because we wanted to support the artist. There are now artists selling 150,000 copies independently which is worth more than 250,000 copies through a label.

Social media networks now surpassing all the problems. I’d love to play older stuff, and I turn to BBC and Virgin for that. But the licensing issues aren’t getting solved.

Radio is on the decline and audience is moving away, and everyone will move in that direction too.

Chris: In the UK, I’m not sure that it is on the decline.

Adam: Listenership is up?

Chris: It’s certainly not down.

Q: Isn’t there a move by AIM to be licensing independent music?

Neil: We were unable to buy one of those licenses.

Adam: They want 12% of gross revenue, which is too much.

Neil: And they can’t tell who you are, so they can’t sell you the licence.

Adam: The artists are licensing it themselves under CC, they are getting it out there.

Q: But most musicians don’t knwo what CC is, they already have a deal.

Adam: Well hopefully conferences like this will help them find out.

Q: I imagine you share our frustrations that US podcasting is so weak. But the kind of rants and personalisation… podcasting could be more aspiration.

Adam: I agree that 98% is crap, by my standards, possibly a different 98% to you. All we do is take user generated content and turn it into a media property. We take that relationship between the producer and the audience and monetise it through advertising. And this is the beauty of it. We don’t stand for ‘this is the good stuff’, it’s more ‘1000 people like this, and it’s not for me to judge if it’s good’.

If I want news I can trust, I go to the BBC for the number of reasons. But it’s hard to build that kind of brand in this space. There are 30k podcasts, and I haven’t listened to all of them, but I know ther are some I like.

James: There’s a role for a trusted guide. If you look at what people are listening to – not iTunes because that’s crap – you’ll see all sorts of stuff, Virgin, BBC, Curry. These are all brands, people already trust these brands for quality. But a podcast where someone introduces you to new and exciting podcasts is valuable, that trusted guide.

We’ve had that in radio for years telling you what new songs to buy.

Chris: I’m not sure about trusted guides. The good stuff will rise to the top. There are some that are good, and a lot that are bad, but what you think is poor quality might be the best one for me. I don’t mind the fact that a lot are rubbish, because someone else might think they are good.

It’s a fantastic thing for radio. Podcasts are a huge attention for what is essentially speech radio. Getting 14 year olds to engage with speech radio is great, and if they call it a podcast that’s fine.

Q: Isn’t the BBC spending public money on an open-ended podcast trial, what is the accountability. And for Virgin, is that an issue?

Chris: Depends where you’re coming from really. We’re not creating new programmes, we’re offering ones we’ve already created so in some ways this is just distribution. It’s going out on FM, Sky, internet… so this is just distribution. We’re not going off and creating a whole new radio stations unapproved.

Q: But you’re doing a news blog.

Chris: Which is great value for money for the tax payer.

Q: But what about Little Britain. You don’t podcast that.

Chris: But there are all sorts of rights issues.

In terms of open-ended, it is a very strictly controlled trial. We’re offering 50 programmes and there is a start and an end point, and if you look at the impact on the market, look at iTunes, we are not dominating. We are doing pretty well, because we have an audience. But there’s great chance for education too. If you have Terry Wogan talking about podcasting, then that encourages people to get into it.

James: The web wouldn’t be the place it is today if the BBC weren’t involved. All of the broadcasters have to play together and pull in the same direction. That’s why all of us are on Sky, all of us are on DAB, on the internet. We all recognise the benefit of moving together.

I would also love to be in the position of having a guaranteed revenue, and to have a lot of lawyers, which the BBC has. But in terms of education they do a great job.

But how we earn money called, and sorry for this, called podverts. There are ads from large brands, some of them are doing it very interestingly, e.g. Bose selling speakers, bands selling music, and then the Special Constables advertising to people with a bit of spare time on their hands. Relevant media use. The money we’re earning out of podvertising is better than the pay-for route.

Q: How closely should a podcast resemble a radio show? Should it be as live?

Adam: There is something fundamental about this conversation which is the distribution. Trad broadcast have to pay for the spectrum, so these layers have been built up to create unwieldy organisational structures, and that’s reflected by the programmes you hear. It’ sin the DNA of the organisation. When you have unlimited space, you’re going to get art, and art creates all kinds of groups of people who like that particular art. So I don’t think there’s a good or a bad way to do it. I do my shows the way I want to do it. But there are at least 135 definable categories of formats in podcasting, and you may not want to listen to it all, but that’s beside the point.

Regarding podverts, we want content. And our audience wants content. I don’t sell ads on time. What if ads just became content? What does my audience want to hear? That’s where you create value for business models.

James: If you are trying to make a podcast that’s serious, but you sound like a poor version of Radio 4 that sounds like it’s been recorded in a cupboard, then that’s not going your brand any good. So how it should sound depends on what you are trying to do.

Understanding the commercial impact of blogging

Chair: Neil McIntosh

Hugh McLeod, EnglishCut.com

Guy Phillipson, Internet Advertising Bureau

Chris Price, Shiny Media

Simon Waldman, Guardian Unlimited

Simon: Blogs are have two sides, they are an R&D lab for things that come in the future. Blogs are a completely different way of publishing. Stuff starts as a blog then develops. the other strand is looking at how our reputation spreads across the web through bloggers. Our health online is dictated by the volume and state of conversation around our content.

Guy: Reputation management for brands. Net has empowered us all, and there are communities of people out there, and blogging embodies this new behaviour and if you play that to the end game you have to stay to what extent do you still own the brand? In the old days you put your messages up, and now consumers have their own voice to put their own views across. Should we take notice of bloggers? Yes, because they are a core audience.

Hugh: About a year ago I was kind of under-employed, and a friend of mine was one of the best tailors in Britain, but he decided to move to Cumbria where I live and he wasn’t getting work because his customers were all keeping him secret. So over a beer he told me about Saville Row, and I said he should blog it.

We build a blog called EnglishCut.com, where we talked about Saville Row suits and why you should want to pay £2500 for a suit. It did very well because suddenly we didn’t have to have a third party to tell our story. If you’ve got a blog relevant, and your market is a few thousand people, and you reach 100 a day, six weeks later you’ve reached them.

An editor of a newspaper promised to do an article, and the article never materialised, and if you have a bespoke product, and you’ve been reliant on the media to getting your word out, it’s interesting to me that that no longer needs to happen. Our market is 7000 people, and we get 200 new readers a day. What we’ve been able to do is have the conversation we want to have with the people we want to have it with, at a level far higher than any of the mainstream media can manage.

Neil: Self-promotion is genuine marketing. Can you attribute sales to the blog?

Hugh: I can attribute a 300% rise in sales in 6 months to the blog.

Neil: Chris?

Chris: There was a fear amongst some companies that blogs would damage their brand, but that’s not happening. We’ve done well on the tech, we bring traditional journalism values to blogging. We’ve had deals with Sony and Dyson, and we have someone full time who is talking to ad agencies.

Hugh: How long have they been receptive? They’ve been slow.

Chris: It’s a very recent thing. But it’s easier now we have someone to go and see them and talk about what we’re doing, and talk about us, say that we are about bringing editorial integrity to the brand.

Hugh: Is it hard to find new writers?

Chris: Not at all. There are people who want to express their feelings on stuff. There’s no shortage of great writers out there. They’re not necessarily journalists – this is a new skill.

Neil: Simon, what’s the benefit for big publishers?

Simon: There’s something about advertising in blogging. People are starting to think not so much of impressions, but of context. This is old-school media planning but it got lost in a blizzard of click-throughs. People are placing more value on targeted advertising. Fine to have great content, but need to have a level of engagement with your audience, and this is the new ecosystem, and understanding it is our challenge. We know how to publish a fixed and closed entity, and that’s where we started from, but things are moving to something which is more open, decentralised, but more challenging?

Guy: Yes, the engagement factor is the one that most people are trying to find out. Yes, the older model was ‘who can we reach online? where are they all?’, whereas now we need tighter, more targeted groups. Same with podcasting, so if someone’s doing a podcast on travel, then that’s a focused topic.

Chris: This is a key, it’s the level of interaction that you see on blogs. People want to interact with other readers, talk about their favourite shoes, that sort of thing. This is very attractive to advertisers.

Q: How do the panel feel about paying bloggers to blog? Is that a good relationship?

Hugh: I think it’s great. The more bloggers get paid the better.

Simon: We have an element of that with Comment is Free, where some of the content is paid. It’s the people we choose as contributers who get paid, same as we do with normal contributors.

Chris: Shiny Media, we have a policy of paying all our writers. It may not be NUJ rates, it’s certainly not paying by the 1000 words, but we are paying them a monthly wage in some cases, and we’ve steadily seen the amount we can pay go up. We’re obviously not paying commenters, but we are paying bloggers.

Guy: Big lesson in the States was Ain’t It Cool, who was a film blog, and it became so popular it affected sales of films, so they started wining and dining him to try to improve the comments he’d make. Should you employ a blogger to make good comments? Well, be very careful. If you fake it, you will be found out. But a good balanced blog, where the blogger can put over their own point of view, could be a good thing.

Q: Like most bloggers I have no idea how to measure my success, but I get more visitors than Steve Bowbrick. I’m a fanatical Guardian reader, but I can’t link to Media Guardian because I need to register.

Simon: Because we’re a business, we register. You can link to it but people need to register to read. It’s only one sliver so I think it’s reasonable. We understand these issues, and we have to balance these things, but this is enabling us to grow as a business.

Chris: This is a dilemma that most trad publishers face. Do they risk cannibalising their own readership by making content free? I think the do, but this is not something we’ve had to deal with.

Q: What do the panel think about niche brands being better placed to blog than big business? Is the ‘pay for blogging’ issue really about transparency?

Guy: Big brands vs. new brands. Online is such a democratic medium that we can all enjoy the benefits. Niche brands, when someone has no visibility, so a small brand can sit next to a big brand on the same page, so there’s a bit opportunity. Low cost. Don’t have to do pay-per-click trick. But corporates really absolutely have to look at it, need to manage brands online. Can’t control it. But need to be aware of what’s being said.

Simon: Blogs are one of the few ways that large brands have of seeming at all human. Done correctly. You see some corp blogging and it’s just cringeworthy. Some, e.g. Sun, is done really well.

Neil: Hugh, blogging for big business, or secret blogging, astroturfing is risky business. What makes one set of blogs ok, and the others dangerous.

Hugh: Our model at English Cut is that we tell the truth. We just say this is what we’re trying to do, let’s have some fun with it. If you’re up front with what your intentions are, then I don’t think anyone has any

Chris: It’s about honesty and transparency.

Q: People are turning to RSS. What impact will that have on the commercial opportunities for blogging?

Simon: Blogging is about R&D. And decentralising through RSS, I can’t make up my mind about whether it’s great or a disaster. It fundamentally shifts our model. There’s no working example of how to deal with that. Some publishers,and agreggators are going to ahve to find a way to make that work. Great way to push content, but no one knows what impact it has on your audience. For everyone person it might brting in, it might stop someone else because they’ve scanned the headlines and don’t need to visit the site. Tricky. Not going to go away. Need to understand that model.

The interesting bit is whether, RSS will go two ways – either 1000 flowers will bloom, or you’ll get a default culture where a handful of feeds are put in to aggregators by default.

Q: Costs a lot to be a member of the IAB. When will you open that up to smaller people?

A: Do have a lot of small members, and we welcome more. But importantly we help advertisers make sense of the internet, and we are format agnostic, doesn’t matter if they are cars or retail or who they are.

Q: Do you talk more about your big members?

A: We talk more about formats, not about advertising on MSN or anything.

Q: People trying to own space.

Hugh: Practice. People will fail and will learn from that.

Chris: It’s neither possible nor desirable really. For big companies it’s about embracing the new technologies. So in the case of Scoble, they have to trust him not to slag off MS too much. Guardian is the same principle. The brands who buy advertising space can’t control the media, and they will try to manipulate it through PR

Simon: Owning a community is like owning a cat. You have to understand that it can leave at any moment. You have to show it a lot of love and affection and forgive it if it shits in your kitchen.

You have to work very hard with communities. When you are working hard, you know you are starting to get there.

Can digital rights management achieve its security goals?

Chair: Nick Higham

Dr Ian Brown, UCL (and also ORG)

Nick Higham

ONe of the things that alarms content owners is what this new technology means for their copyright, their intellectual property, their security. Dr Ian Brown is a computer security researcher at UCL.

Ian Brown, UCL

I want to limit myself today to “will DRM do everything that they are sold as doing?”. There are much wider issues to do with DRM, but I want to focus on this specific area.

DRM is an umbrella term for quite a wide range of technologies that give content owners some control over their content. Some control, not full control – you certainly can’t expect to put your new Britney Spears CD out and not see it online within five minutes.

DRM is also not about copyright, because it goes further than copyright law. Copyright law also varies from area to area, for example there is no right to private copy in the UK, but yet people do it anyway. DRM goes further than trying to prevent this, but can control the way people access, print, and copy ebooks, for example.

DRM is present in Windows Media Player, Adobe e-books, RealPlayer, iTunes, etc.

French law which is saying that DRM has to be interoperable between platforms, e.g. can’t put iTunes music on a third party media player.

The basic tech behind DRM is simple – you encrypt the data in a way that is impossible to unscramble directly, even people with the computing power of major western governments. You give the encryption keys to the user via the medium of the media player, e.g. your DVD player has decryption keys so that it can decrypt DVDs. This controls access to the data of the files.

The other type of tech is digital watermarking, which allows people to embed information in audio and video files in a way that is invisible to the user, and hard to remove. Can embed information that controls when the media can be used, e.g. can only be played on computer with xyz ID. Also allows the media owners to track who copies stuff.

DRM is actually very difficult to do. Making it work overall as a system in the way that content owners would like, is a very difficult problem. Some of the underlying reasons for that:

– data is encrypted, but has to be decrypted at some point so you can use it. So at some point your tech has to decrypt it and create an unprotected version of that content.

– watermarks can be removed. All of the watermarks that have been created are fairly primitive and have been a failure. People trying to break these technologies find it easy, and there are fundamental reasons why this is easy – if you distribute a file which is on the one hand the same – all Britney Spears CDs that are the same – but have individual bits that are different, can compare and find the watermark.

– DRM tries to reduce the functionality of your computer as regards specific streams of data, but old equipment doesn’t have the DRM on it, so legacy computers are going to be more functional than new ones.

Previous DRM solutions:

– secure digital music initiative: was tested against world’s hackers, and the hackers won. One research team in Princeton broke all of the proposed technologies. Most sensible companies would have rethought it, but instead STMI tried to sue the academics that had done this work, the conference organisers, etc. The researchers gave a press conference saying that they weren’t going to publish the research because their houses are at risk. STMI said they had broken the DMCA. Researchers got support and published the research anyway.

– CD protection: several record labels have released CDs that play on your hifi but not your computer. Most of these techs are trivially circumvented – one you hold down the shift key as you put the CD in, or draw a black line round your CD. Would have been illegal to tell you this 2 years ago – now it’s only illegal to tell you how to break software DRM.

– CSS: broken by a Norwegian teenager who was arrested under trespass law, so the courts threw it out.

– Sony BMG (XCP and MediaMax): big news over last few months. Sony BMG installed two DRM technologies, XCP from a UK company and used virus-like technology to embed itself deep in Windows. Very difficult to remove. After a lot of consumer protest, they released an uninstaller, which made things worse, and eventually they released something that did allow you to remove it. MediaMax installed even if you said no you didn’t want to install it, and reported back to MediaMax what audio files you use. Sony have had to settle a number of class action cases already. The US govt’s said don’t install it. Lots of gov’t computers infected, so the US gov’t not impressed.

So DRM is crap. But supposedly it will improve soon. Intel, IBM, HP etc. want to put this stuff into hardware. Trusted Computing.

Thinking about all sort of problems of getting round. MS want it everywhere – your computer, phone, PDA, even your watch.

– The analog hole is a big problem: No way not to turn digital bits into an analogue version for human consumption. Lots of ‘anti-piracy’ ads in cinemas because they can’t do anything about it.

– Break One Play Anywhere: Even if only one person in the world can break it, they’ll share it and you really can’t stop P2P. Napster originally weren’t designed with lawsuits in mind, but now they are and they are very difficult to shut down. Lots of networking technology that will stop this.

Some business models that DRM could support:

– Live events: you don’t care if it’s shared the next day, it’s live that counts.

– Highly select, time-sensitivie audiences, customised information provided to individual recipients, e.g. Oscar judges. Last year for the first time it was found that an Oscar screener was leaked, and the judge who leaked it was fined. Customised data that only needs protecting for a short time.

– Highly interactive systems, such as games. Even if someone breaks it, it doesn’t matter, because they can’t keep breaking it.

Very polarised debate.

Nick: So DRM is not workable?

Ian: Content companies have been mis-sold on this. Software companies have sold DRM as solving problems it can’t solve. As people come to understand the technology they see that it’s the business models that need to change.

Q: I agree that DRM is not unbreakable. But we don’t need it to be unbreakable. Can DRM be useful? I would say yes.

Ian: Yes, I think your good point is moot, because no one has produced a system that prevents low-quality copies. But it’s an anti-consumer technology. There aren’t many consumers who have an understanding of UK copyright law.

Nick: Consumers are happy to buy low quality. It’s not a disincentive.

Ian: Early Napster files were very low quality but they didn’t put people off.

Q: An observations, it’s a bit like the war against drugs. Entrenched position. What is stopping people exploring the possibility of radically new business models, and what might thos be?

Ian: The problem is that the big rights holders have expended a lot of energy in lobbying to get the law changed, global copyright law has changed, treaties have changed. They got the DMCA passed. The EUCD. US didn’t need to pass those laws to fit the treaties, but the copyright holders lobbied for it.

There are alternatives, there are indie labels that use non-DRM materials, and the market should be able to decide.

Nick: But the trouble is that sometimes the market can’t decide.

Ian: Well, that’s

Q: Consumer associations have expressed concerns about the rights of the citizens. Do you think their concerns are misplaced?

Ian: No. It doesn’t stop at deterring copyright infringers, it also makes life difficult for say, visually impaired people. RNIB gave evidence at APIG and said they have problems with ebooks.

Q (me): DRM lobbiests more into supporting vertical niche markets than protecting copyright.

Ian: Damaging to copyright law and public’s respect for it, this ‘newspeak’ that goes on around DRM. Industry make blood-curdling pronouncements, conflating opening up standards with protecting copyright which is very damaging.

I believe in copyright, but I don’t think DRM is the way to enforce it.

Q: What about revenue sharing?

Ian: I can’t talk about it in detail, but it’s a positive move. If you have legitimate P2P services, then yes, that might work.

This has always been the flip side to DRM – how do you make a business model not from scarce goods, but from abundance. Grateful Dead, for e.g., or U2 find their music is a loss-leader, and they make their money from merchandise.

How can media owners and advertisers develop a business model?



Chair: Neil McIntosh

Steve Bowbrick, another.com

Tom Coates, Yahoo!

Robert Loch, Soflow.com

Martin Stiksel, Last.fm

Martin Stiksel, last.fm

What’s so social about our social music network? We put the users in charge. Plug-ins to track what music you listen to. Connects you to similar people, compares your music profile with that of others. Recommends music based on what the people with similar music profiles to you are listening to that you are not listening to. Aggregates information about bands on wiki pages.

1.5 million people on Last.fm.

Tom Coates, Yahoo!

Social media. Brief preamble – had blog for 7 years, online community for 8 years, worked at BBC for things like this. No idea what social media means. It’s a ‘theory object’ – something good to think with.

If you think about the internet as a communicative media, see there’s been a shift from that to more publishing-based media. Social media is a hybrid, but it’s more than that, so far, so usergeneratedcontent. The significant shifts are about helping individuals to create and make use of content, whether that’s the smallest engagement such as last.fm, whether it’s youtube where there’s more effort and creativity.

The content produced becomes part of an environment that is greater than the sum of its parts, so you get back more than you put in, as does the organisation you’re hosting it with. So I would push that as this social media idea, that individuals publishing in a social environment where you get something back.

Steve Bowbrick, another.com

Important time in the history of the medium, and the net, and this feels a bit of a throwback event, like it’s 97 or 99. Went to a lot of conferences where we heard a lot of this tuff, not just from MS, but also the kilted groover, (Ben Hammersley). I feel there’s a groundhog day effect here and we haven’t broken out of the cycle. One of the things that i see that’s exciting is social forms colliding with the net, and we might be able to break out of this.

You would have concluded from the conferences in 984 that big media would be gone, but they are still here. We are worried about media, but this is about all business. These businesses persist because they represent a storehouse of value of all kinds, not all capitalist values – capital itself – but now we’re worried too about APIs, and other resources. Businesses are full of resources, tech, attention, audiences, expensively produced over many decades.

I’m working for a media company with a product over 150 years old. They represent big pools of brand equity. They have big legal departments, and these are the departments worried about rights and libel and stuff.

How can we start to expose those resources to the communities who make use of our websites? That’s the closest we’ve come to a business model. It may be that advertising drives the whole thing, but how can we think about exposing our business to consumers.

In a few years time we’ll use the phrase ‘API’ as a term to talk about connecting with customers. And via these APIs we’ll connect consumers with resources that have been building up for decades.

What I expect big media busines to do is to support, encourage, direct and enhance the aspirations of their users, of the visitors to their website. Ebayisation – microbusinesses making their fulltime living from eBay. Tiny businesses making a living from borrowing, building on and amplifying resources provided by big media.

Robert Loch, soflow.com

You have to look at time, what people are doing with their time and how that is changing and how these sites are impacting on it.

Kids social time spent on sites, so you can’t talk to them on TV, you have to use these sites (he gives an e.g. but I don’t catch the name). People need to wake up to that. Opportunity for brands to own a category. So Mothercare could set up a site where mothers talk about this stuff, so if you’re a competitor to Mothercare, you have the opportunity to own that space.

So Nike are trying to own the social media space for football. Whether they will or not, but if they do they own it against their competitors. So football fans are spending their time on that site, not the Sun’s.

The threat is… media owners don’t even see it, but if you don’t own the space you are at a disadvantage. Yahoo! buys their social media space. There’s not a single brand in this room that has a success in this area. Look at the Guardian, their online communities aren’t what they could be. They are a difficult challenge, because your PR agency, interactive agencies, won’t know how to do it.

Neil: Tom, saw you pulling faces.

Tom: There’s a real lack of clarity of what we’re talking about. Yes, Yahoo! has been buying in talent, properties, etc, but Yahoo! is one of the biggest chat rooms around.

But i get a bit confused between online communities, or social networks, or social media, os it’s difficult to figure out what people are advocating. But one things that is true is that they all tend to be viral. You don’t get into last.fm unless someone else you know is into it. You don’t get most value from Flickr unless your friends are using it.

One of the things you often find is that social media spaces based around networks is that there are only a certain number of players that can operate. It’s easy for individuals to switch a service, but hard for them to take their network with them. So if you approach a certain demographic, get involved in their lives, then you get a network effect, and it becomes hard for anyone to take over from that.

But it takes a lot of initial investment, and it is hard to make money because you can’t charge for a system that requires the network effect. If you’re aiming for the millions of user point you need to spend a lot of time to build it up there before it can go massively viral, but you can’t just advertise.

Flickr have never advertised.

Robert: It’s not the cost, it’s just difficult.

Tom: It takes time, and time costs money. using Flickr as an example, it’s still 12 people, even inside Yahoo!, and they have over tens of millions of photos, millions of users, in two years. Need support of Yahoo! to scale, because it’s hard and expensive. But it still took them two years to get there even with the best service out there. And there probably won’t be another photo sharing site that will be as successful because it’s hard to get people to switch.

Neil: Where are the business models? You can’t charge if you’re trying to build numbers. If there’s a resistance to adverts, how do you monetise these sites.

Steve: Maybe it is advertising. It’s having a bit of a comeback. I don’t see why users won’t trade a bit of attention for the content that they are consuming. I’m still persuaded that these communities, and it’s hard to use this word these days without inserting inverted commas, but these communities have their own dynamic. Need to be instep with the communities, need to support their own aspiration and goals.

Come back to the phrase ‘popular capitalism’ – these people would love to emulate Flickr, and would love to progress from sharing to trading. Are there ways to get these people an income? Can we make a complicated rights framework available to our citizen journalists so they can start to make money from what they do? Because rights are very difficult and alienating for citizen journalism.

Tom: I agree with everything you said. There’s direct and indirect ways of making money or creating value and I think they really are very varied. My boss was talking about Yahoo! strategy about this, and one of the things Yahoo! is trying to do is create better search through people. If people do things that they find useful and valuable, and you can hang services off that then that’s useful. Social search.

Social networks that create something that’s larger than the sum of its parts, that’s really core. If you can create something that people can build upon then that’s very valuable.

Robert: Well, there’s media on one hand, and monetising media. And it’s more interesting to see how brands can start using social networking. Chance for any brand to own the media, and own the relationship.

Neil: Would your customers be angry if you used their data like this?

Martin: Well, the only thing we are doing anyway is advertising because recommendation, cover art, playlists are all really advertising and music is this social glue that holds it together. But we give the labels the chance to participate, so there’s opportunity for the music industry, from bedroom producer to Sony or Virgin, so it’s a great opportunity.

Neil: Is the industry showing interest in that information?

Martin: They are interested but we are not really interested in passing on the data, we’d rather use it ourselves to help people find new music or recommend music. We’re rather have this knowledge of the crowd from all our plug-ins rather than putting editors in charge to qualify music in genres. We’re using the knowledge of all our music fans. That’s the best way to find new music anyway.

Neil: Sure that helps the industry, but does it not underline the problem with social networks, that because they belong to the people who use them there’s a problem with passing on that data to people with a commercial interest.

Martin: We are not passing the data on, because we ourselves have a commercial interest.

Neil: Robert, about Nike owning media space. Do you think they’ll pull it off?

Robert: They are kicking off during the World Cup, but to continue it and carry it on beyond is going to be reasonably tough. It’s not easy. Interactive agencies haven’t yet done it. How do you get your community to work with your brand.

Q: Can’t work out where the money is. Where is the business model? Martin, you showed us your site, but I can’t see where the money comes from.

Martin: We started it for the love of music, but obviously someone has to bpay for our servers and bandwidth. All we are doing is displaying music all over the place, so it’s simple to put a ‘buy’ button next to it. So there’s a clear endgame to this which is to purchase it. And there is consumer revenue to be made from recommendation. We are a revenue generating company, via commission.

Q: No rational business man would invest in social media. Because the rules are give your stuff away and sometimes it will work. What you have as a business, what you have isn’t important either, it’s what the customers put in that counts. For big media, let someone else succeed then buy them. It’s so against the rules of capitalism.

Robert: We’re in the business space so we get people to sign up, they give us information about them, and they invite their contacts, then they spend time on their site discussing topics and it doesn’t take a genius to work out we’re spending nothing on advertising our service, and can put advertising on our pages.

Once you’ve got a large audience, then you can look at models for monetising, subscription or advertising etc. Any brand who does not use social media has got their head in the clouds.

Tom: I’m always suspicious of people who say ‘what’s wrong with you, you’ve got your head in the sand’. It’s easy to prophecy doom, but for many organisations the scale of social media you want to be involved in it is different. Buying in is expensive, and bad sites tend to fail. If you build a site that’s bad and it fails, that’s not social media’s fault.

Advertising is a fickle business and the money is not always available, but at the moment if people are looking at your site then you can stick ads on and make money. But there are other ways of doing it,e.g. if you create useful data that’s always be valuable.

Q: Flickr appears to be an interesting model because it’s based on me uploading my content and making it available to others that suits me. If I didn’t want to pay I could get a limited service with ads. In terms of last.fm, I’m more confused. I pay $24 a year for last.fm, but what it’s doing is taking the work of others and making money from it. Martin has not mentioned what his major costs are. But what about the music costs? Where are your PPL licences.

Martin: Only 3% of last.fm users are using the radio, so it’s the icing on the cake, but we have arrangements with the rights societies to distribute our royalties that we generate out of the last.fm to copyright holders.

Q: I’m in education and my background is broadcast, but if there is a potential for something that’s greater than its parts, surely big business must come back into education. If Apple have designed something because it’s easy, surely now is the time for people to back new oral archives and the time that it takes the academics to fuel the system, can be backed by people with a bit of dosh, because the students don’t have money but now they recognise the value of their own community. My appeal is for them to do what TV did with Jamie Oliver’s programme, and back students. Much excitement and potential and talent, but no time or kit.

Tom: Large organisations like Yahoo! are very interested in what the next generation is going to be doing, and to support and engage with that. Also get into problems when you get children to put things online, there are lots of worries about that.

I have no doubt that there are Yahoo! programmes around for youth, although I don’t know what they are doing here.

Q: Anyone who doesn’t understand last.fm as a business model should go home and study hard until they do because it is a killer app.

As someone who has been working for a print property working online. How do we avoid the errors done by print media in the past like putting content behind registration.

Steve: I don’t know how you avoid those sort of problems. Perhaps something like Content is Free, compared to the Mail where the columnists are all behind a paid-for barrier and have zero currency online. My suspicion is that we’ve actually seen the period of subscription funded, paid-for online content in the general and news journalism environment is finished.

Secondary models, which we don’t necessarily understand yet, will replace them. Because you can’t drive passion for your brand in a pay-for environment. The most powerful model is not going to be portals, or the NYT, it’ll probably be eBay which is a model to examine very, very closely.

What is the impact of user-generated content on the traditional business model?

Chair – Emily Bell, Guardian

Ben Hammersley, writer and journalist

Jon Snow, presenter C4 news

Fru Hazlitt, Virgin Radio

Fru Hazlitt

Worked for Yahoo! for 6 years, and that’s a long, long, long time. I resigned, that was amzing too. And there were a few things I did learn, because I left radio in 99, went to Yahoo! for six years and have come back into radio. Whilst I was at Yahoo! there was a lot of talk about the fact that if you really want to understand the advances of technology, watch the consumer because they konw what they want and what they are doing.

And I say to that, bollocks.

Henry Ford said ‘if I listened to my customers I would have invented a very fast horse’,. and that’s right.

The understanding of the consumer always lags behind the advance of technology, and they are all scared of it. As people were scared to get into cars, and they wanted the man who wound up a crank and made sure it wasn’t going to eat you, and that’s how it was. You felt safer on a horse. And that’s still the same today. There’s still that painful moment where you boot up a computer and think ‘is it going to work?’. It shouldn’t be like that. We do not and should never be conscious of the tech behind a thing we’re using and whislt we’re conscious of the tech it’s just not really working for us, and that’s the point I guess. That’s why all these things happen that I call ‘right idea, wrong time’, so for example, the rush of money thrown at the internet, none of which hit me, now I’m back in radio where there’s lots of money, obviously.

What is true is that people rushed to throw money at the net. Right idea, wrong time. Of course people weren’t going to go back – the email was here and here to stay, the internet was here and here to stay. But before we worked out how to monetise it, the money panicked and withdrew. We knew it was an extraordinary change to our time.

Same as in the phone inudstruy. Invested stunning amount of money in 3G, and no return yet. Not that it’s a wrong idea, it’s just a bit early. Because consumers don’t know what killer applications of 3G phones are going to be. But it’s going to take time.

Same with trad media owners, probably with exception of Guardian. Lots of media owners spent millions in the bubble, and didn’t see that it wasn’t the consumer bubble that burst, it was the investor bubble, so they panicked and withdrew.

Of course, now I would say that. Now is the time to do it, becuase it’s not going anywhere.

If you don’t watch the consumer what should you do? The consumer sometimes does do new things, e.g. text messaging which was driven by the young consumer. Not sure I agree with Sir Martin, but the thing I’ve learnt from Yahoo! is watch the kids.

When I look round this room, we are all too old. I remember a time when my parents had to learn to watch TV. Literally learn it. Came into the sitting room, and had to sit ther eand learn to watch it. And what they said was ‘we can’t watch this in the day time, we must watch it after 7pmj’ and they still do.

I did not have to learn to watch TV, I just watched it. What I have had to learn is the internet, and the new fangled phone, which I hate because I can’t use it and I can’t be botherede to read the damn manual. If it’s not instinctive peopel don’t do it.

it’s like learning a language. Learn it at 3 and you’re fluent. Learn it at 23 and you’ll always have an accent. And we will always have an accent. We remember pre-internet, but our kids won’t, and that’s when it is used instinctively.

The other day a DJ called Christian O’Connell complained about technology, and a mother rang in and said ‘didn’t you know all children today are born knowing how to use a Sky remote control’. It’s not about us, it’s about the kids. Most people in the world are boring. You can create wonderful things today with technology, tech democratises creativity, but it doesn’t destroy creators. But it does make damn sure that for once in your life your brand is saying what it should be saying. So make sure that the consumer isn’t laughing at you today, because the consumer can.

[Shows a bunch of slogan remixes – very, very funny.]

Jon Snow, C4

Emily: Jon, is this a threat to quality?

Jon: No, it’s an erosion of crap. There’s a lot of good stuff around, but biggest problem is processing it all. Problem of how you make yourself accessible to citizen media, but it’s a punishing consequence, the problem is that you come in every morning to 200-300 emails. I’m even thinking of getting someone in to process it because it’s a pity, but you begin to look back on what we were doing int he beginning and think it was so damned irresponsible, arrogant. People are producing material that there’s no other way of picking up on it.

People will dare to come out of the woodwork and do stuff, and suddenly you have material that you would never have got before. You calso get a lot of rubbish, and you have to learn to recognise it.

7/7 was the first time we ever used moving images shot on a mobile phone. Partly because images are better quality, but necessity is the mother of invention, and if you have stuff that’s unique you use it. And would never have had prospect of getting in the past.

I think Dr Ali Fadhil (sp?) in Iraq who gave us an insight into the barbarity in Fallujah. This massacre in the Suni Triangle has only been exposed because people have been able to get video, put it on the net and get it to us. It’s liberating. But we need to have to reconfigure our news rooms – our webmaster is our editor.

Through the formal channel of the web, I receive at least 20 direct communications every day.

I have no worries about it at all. We are into a new world, and the issue is how we manage it.

Ben Hammersley

Emily: Ben, is there any need for any of this? Aren’t we all doomed?

Ben: Jon is right, there is a gatekeeping role. Bloggers get wound up about the idea that big journalism is dead. But there is enormous value in good journalism, and that will always be necessary. At the Guardian we act as a gatekeeper for an enormous amount of user-generated content, and more to come.

News media isn’t doomed at all. But general media, and general entertainment media, from waht I’ve heard this morning – which has made me very depressed… If anyone was waiting for Murdoch to say that it was ok to use the net… you are so doomed.

News is the only media that has a need for a gatekeeping role. But for general entertainment, if you’re not embracing user generated content, you’re doomed and have been for the last three years.

Jon: The peopel who are doomed are the crap merchants. The opporutnities are fantastic, and I can’t see the secret societies surviving, because peopel won’t put up with it. They are doignn something about it. We have entered an unprecedented period of anarchy.

Ben: The reason advertising fails on the web is that 99% is bullshit, and it’s proved to be bullshit. You can’t build a brand around a crappy product anymore, because Google will out you. People will kill your brand for you – whistleblowing happens all the time.

The days when you could just say ‘buy this, it will get you laid’ are over. Because people are searching to see how good the product is, and if it’s bad you’ll be outed immediately.

Jon: The conventional media shouldn’t feel threatened, but enhanced. It’s just about manpower. You can ask, if you are out there making KFC, can you tell me what you make it out of?

Our problem is knowing how to utilise this stuff. This morning I found a very angry missive about someone who sent me info on fake malaria drugs, and i had to email a plaintive reply apologising for how slowly they were following it up, because there’s too much stuff there.

Fru: It’s about this thing that people see this as a bad thing. Jon’s aboslutely right. This whole change can create some very, very good things. Stuff that would in traditional ways never have been found. But what I do think it should do is sweep away this notion of… if you go into a new company and you say ‘Oh, by the way I did some research and someone says there are really long queues in your shops’, and that’s brushed away, and you have to think, why not actually do something. You could sweep it aside before because it was myth, but companies should try to take notice. We use the people online to find out if the people online like what they hear. And it’s really cheap. All you do is stick out a question – do you like our new DJ – to the people that listen on a regular basis, and you get a really detailed response.

Ben: There’s a lot of data that you can pull out. There are definitely adverts that people don’t skip, but that they put online and share. But there is stuff that you don’t ifnd online. You don’t find Ant and Dec online, for a reason, because they’re shit. The answer is make better adverts.

The best online video sites show the best ads.

Fru: Launched a new thing, and did a top 20 every friday about office attachments, and got 2 million people a week in the space of a month, and most of these were ads that had been made, that hadn’t been tampered with that peopel thought were good. And that’s a real change.

Ben: There’s a Darwinism kicking in. If you make bad stuff you are going to die.

Jon: I’ve been unapologetically enthusiastic, but we need to judge people on whether they make themselves transparent, whether they post some mechanism for individual citizens to get back to them. They owe it to their readers and listeners to make themselves available for communication. There should not be a one-way-street in media.

The added value of material such as blogging, vlogging, podding, if it’s an extension of your day job and it’s not part of new remuneration, but the difficulty is that it’s easy to stack up a lot of activity and that erodes your day job.

Q: Why is traditional media so reticent to ask for and use user-generated content. Thinking of the tsunami. The first 12 hours of TV coverage was dire, didn’t include anyone from there. Katrina, very little coming in. It was day three before BBC and Sky asked anyone if they know what was going on.

Jon: We got so much stuff after the tsunami that it just swamped the newsrooms. But in Katrina the poor who stayed behind didn’t have mobile phones, and those who did didn’t want to talk about what was happening.

Coverage of 7/7 was ahead of the curve, it happened within minutes, so this will come. We are at the beginning.

Emily: Buncefield, all women with children because that was what time they were up. Sky and News24 only had UGC for the first 1.25 hours.

Q: Is this because it’s in the UK?

Jon: I don’t think we’ll see much UGC from the next flood in Bangladesh for example.

Ben: It’s also hard to do. The tsunami wiped everything away.

Also, if you are a senior journalist, and you look around, then suddenly the newsroom is full of shaven headed people in leather skirts. With Comment is Free, a lot of the user-generated stuff is as good as the lower end of the professional stuff, and it’s clear that if you’re not very good, you’re screwed.

Q: Heard a lot about the journalistic aspects, what about the business models? When will Virgin and C4 going to have user generated content up online?

Jon: Why do you want to ghettoise us? There’s a fantastic amount of content online.

Q: I mean what are the business models.

Fru: Virgin does a lot, but the trick is to monetise it properly. The issue is that the team have done the most incredible job of getting Virgin on a number of different platform.s The question is where is the radio listening habit going to evolve to and where to we monetise it. We have a huge amount of listening online, so we’ve brought online sales in-house. But what’s amazing is that we have 1/4 million people who’ve signed up to a VIP service who respond when we ask questions about new stuff. They are there, and anyone who’s not doing that is flipping mad.

Emily: If you don’t hold the conversation, you don’t hold the audience.

Fru: Radio is not going to be on an analogue receiver in 10 years. It’s going to be on multiple platforms, so your job is to make sure that your content is on as many platforms as possible.

Emily: Guardian are actually making a £1m online profit this year, all from advertising. Been investing in this for the best part of ten years. Losses peaked at well under £10m. So if you looked at how much it would cost to buy Guardian Unlimited now, that’s peanuts.

Ben: The big revolution that’s happening on the web now is that the cost of entry for developers… if you wanted to start Guardian Unlimited now from scratch, it would cost a fraction now. The start-up costs for start-up publishing is so slim that profit comes almost immediately.

You can give your content away for free and make your money from t-shirts. There are people making money from single-man models that don’t scale.

Q: On the commercial side, do you have guidance for brand owners who are fighting in Google against someone small.

Ben: It’s simple. Don’t make products that suck. It really does come down to the fact that Google will out you. If you have a bad products, you will be outed on the web. Same with politicians – don’t be corrupt, you will be found out.

Fru: I think there are still crap products that can be made and well promoted. If something becomes cool very quickly, it can be sent out to zillions of people very quickly, and it may not be very good. And although you’re right, Google will find you out eventually. But a cool thing that may not be a very good thing. The rules of the game have changed and brands need to learn how to play them.

Jon: We can’t forget that the human spirit has not changed. You can’t con all of the people all of the time, but you can con some of them some of the time.

Q: Around the world, there are some countries where citizen journalism is the only free press, and in some where they have become mainstream. Will there be network effects?

Jon: A lot of that journalism was crap to start with. Excellent journalism will win out, and it may professionalise professional journalism. 25 years ago, and I’m not against alcoholism, a lot of journalists just shouldn’t have been journalists. And there is a very sharp, exciting world there which will be made more vigourous by conspiring with the citizen, and I hope that the citizen will conspire with journalists for a long time to come.

Q: The idea that we need more creative ads reminds me of a lot of articles in the PR press. But the standard of advertising here is very high compared to the rest of the world. But the filtering of ads is increasing. Ads may go viral, but that’s because they’re funny not because they trust the brand or it has any credibility. Need ways of facilitating and building trust.

Ben: The point is very correct, there are brands to build. But the way that you build the brand is to make a

Q (me): Does fear of libel put people off?

Jon: Libel is an factor. Lawyers are now everywhere. 25 years ago you couldn’t tell who was the lawyer, now the newsroom is full of them. When I first started Snow-mailing, they didn’t think the lawyer would look at it, and then they started reading, now it has to go through a lawyer.

Emily: Judge in Yahoo! case recently said it doesn’t matter how many people could have seen it, but the fact that something is on the net is enough.

Ben: 80% of my daily work is anti-libel works. It’s the phone call at one am because a Nazi has posted something on the blog. It’s the thing that makes us sweat blood.

Jon: Going to have to sort out the libel laws. we can’t go on like this. This is not protecting anyone, it’s just fattening the lawyer.

Q: Question about astroturfing.

Ben: We know when people form other newsrooms are looking at our blog, when they are commenting. We don’t say so, but we know. So astroturfing is an easy way out, and but it will be exposed.

Here at The Guardian Changing Media conference in London, wondering whether I am going to pay £15 for the day’s wifi access. It’s astonishingly tight of The Guardian and its sponsors – MSN and Windows Live – not to put on free wifi. There are also no power outlets, which is going to be really annoying later in the day as my laptop starts to fade. By turning the screen brightness right down I’ve got my battery life to a little under six hours, but I’d much rather just have a power outlet to plug into instead.

So, Carolyn McCall, CEO of Guardian Newspapers Ltd, is now giving the introduction, but I’m not really listening because I’m still cross about the stingy lack of wifi. Apparently, if the blank pages left at the back of the programme are anything to go by, these old media types are still stuck in the dark ages of pencil and paper.

Chris Dobson, MSN

Now it’s Chris Dobson from MSN with a word from your sponsors. He wants to talk to us about how MSN views consumers, and how MS is changing to adjust to this brave new world. He also mentions ‘we in the media industry’. Hm. I never really think of MS or MSN as media. Do I hear the sound of a ‘content is king’ dot.com bubble building again, let’s face it. Content really wasn’t king five years ago, and it isn’t now… but I digress.

Dobson is saying that the consumer is in control, particularly with TV. He mentions PVRs (personal video recorders) such as Sky+ or TiVo, which is >10% penetration in the US, and likely to reach 50% in the next four years. But the problem is that people are skipping ads.

This puts the wind right up the whole media industry. (And yes, here I am paraphrasing.) 52% of people watch less than 10% of the ads on TV.

Another big change is multitasking. A wired home’s online searches peaks for certain keywords after ads are run, so consumers are using the internet as the interactive part of TV. Multitasking is normal behaviour. Ability to do multiple tasks is a profound difference.

Whilst TV is changing, print is in trouble. The overall share of media $ for print is on a steady decline. Younger ends of the audience aren’t engaging with print in the way that older ones. But content is very important and valuable, and can be published in a different way.

Rupert Murdoch had an epiphany moment in April 05. “…atfer the dtocom bubble burst…”

Thought it was sobering to see real effects on real people’s lives from this media revolution. New York Times is an iconic brand, but last Sept they let 500 people go because of the internet. This is a profound change which is affecting our business and the people who work in it more than we admit. We are in denial, but if you’re one of the 500 you’ll realise that it’s real.

This whole rise of content produced by consumers, e.g. MSN Spaces which allow people to publish their own content. Never been marketed, been launched for a year, but over 30 million people worldwide have signed up. that’s the power of viral, not to be underestimated. We know that Google the power of peer-to-peer that viral is important – Google is a household name but they’ve never spent a dime on advertising.

10% of MSN Spaces users are in the UK.

Regards TV, peak time is not what you think it is. On TV, it’s still evening, but online there’s a new peak time in the afternoon.

Is this the end of mass media? “% day after TV recall” for the US is down to 9% in 2000, from 34% in 1965. Even less now. Big challenge for industry in terms of communication.

Digital Convergence. Online and offline will be redundant terms. All content will be digital, all communications will be digital and the most important thing in your home will be your broadband connection.

How do we sort that stuff out? How do we filter it? How do we present it in a way that is useful? If you look at the stats for Win XP, consumers are waking up to the fact that they can have a PC under the TV and a remote, which does everything you want – TV, PVR, PC.

In Japan, they already have fibre optic broadband that has speeds so fast you can have HDTV with no problem. Penetration for that is 4%. Consumers are ready for this.

Sky+ box is connected to a phone line and a dish. In a few years, you just won’t need the dish, and the box itself will have more capability than it has today. Will look similar, but will have more functionality. As such the devices we know and love, like TVs, will be repurposed and that represents a challenge, in terms of having a voice in that space.

It’s broadband that’s driving the online ad revenue model. It’s not about speed, it’s about the fact that it’s always on, that you don’t have to dial-up.

What does that tell us about today’s consumer?

– intelligent

– empowered

– sceptical

– connected

– time pressed

– no loyalty [very scary – consumer is fickle and will go for the newest and best option]

– ahead of the curve (your curve) [this is the industry curve, because we’re still conservative and not tracking what consumers are doing]

MS are advertisers, and also in media business, and five years ago Gates didn’t expect to be in the media business, and what’s driving this is a fundamental change in the way we use computers. today your laptop contains your life. If you don’t take it with you, you are in trouble. If you lose it, it is a disaster. But that’s about to change. The way that it will be is that MS will stop selling a CD in a box – you’ll get your programming, your data from somewhere else, it will live on a server somewhere distant. [Oopsie, I think this is the Windows Live pitch…]

What’s driving this is broadband and AJAX, which makes you feel that the programming is on your machine, and as such all of a sudden you are independent of that machine. Wherever you are, whichever device you pick up, it will have everything on it, because all your info and programmes will be elsewhere. You may not buy the software, you may lease it.

The final piece that will make this work is security. Windows Vista got delayed to January because we weren’t happy with the security access. [And here’s the DRM pitch…] Consumers won’t buy if they feel something’s not secure.

In the MS galaxy, MSN is on the outer rim, experimenting with web services and advertising. The future of online is not subscription based. The future is advertising-based. MSN has proved you can run a profitable business entirely run on advertising. MS has woken up to the fact that advertising is a major force that will shape the future of software and media businesses.

We formed last year a new division, Windows Platform and Services. We went through a profound restructuring of the company, to reflect that advertising is at the heart of it.

The reason is easy to see. Advertising opportunity is $45 million worldwide. This is a significant revenue.

In the UK, what people do online is very much standardised. They are searching for info or communicating. More and more they are using online for entertainment, but that is dependent on the quality of content that we bring into this space.

So the first thing we’ve done is rethink what an online portal is. Traditional portal models are 10 years old now, and 10 years is a long time. As of this summer, we are providing services for consumers that put them in control and don’t force them down any route. Windows Live will be a suite of services overlaid on Vista that use AJAX. Mail, messenger, search, Spaces etc. Will be entirely funded by advertising.

Consumers have two ways that they want to behave. Some want to be in total control of their content. So WinLive is a fully customisable home page so that consumers can create their own experience.

Some also still want a pre-programmed editorial rich content space. And MSN evolves to be the home of content within this model. We are working on improving the standard of content MSN carries.

So everything is designed to work together; accessible from any device, in any location; underpinned by safety and security. Must be available to everyone you know. If you migrate to WinLive email then will pre-load every contact on your PC. If a contact changes details, it’s just reflected automatically on your machine. Put you at the centre as an individual. More profound than mass media – mass 1-to-1.

Search is important. If there is so much content, and no way to access it, then it goes to waste. Same goes for entertainment. Has to be integrated.

No point creating this ecosystem unless you can monetise it. Whether it’s Google-like clickthroughs or not, there’ll be more information available to the ad buyer provided in real-time. Consumers want three things.

– answers

– social network

– availability on any device/location

MSN is ceasing sales, starting to be an advertising company.

If we don’t re-invent ourselves, the money will slip away. Captains of industry get it. They know they need to change, but they need help to know what that change should be. But further down in the company, people don’t get it. There is a sea change and we need to educate people.

Online is bigger than outdoor advertising, where share of ad revenue is concerned.

1. TV

2. newspapers

3. internet

4. outdoor

What is the problem? Why are people reticent to cough up for online advertising.

People think that

– internet is not a mass medium, but it’s on a part with Times, Guardian and ?? put together

– not measurable, but actually it’s too measurable. too much data to sort through. just need to decide what you want to measure.

– not prime time, but that doesn’t matter. if a consumer wants to compare two cars, they can do it any time of day.

– takes away media $, yes and no. Money follows effectiveness (eventually).

– not impactful, but creative industry has been slow to embrace online, but results = impact. need to work with interactivity., slapping a TV or press add online is only the beginning of really engaging consumers.

Got to let old rules go, and rewrite. Else we’ll be stuck. Like a dinosaur. [ooh, a nod to ad campaign.]

New rules of engagement

– search is good if you know what you want.

– display, shows people what they might want

$30 billion, half will be search, half display.

Relevancy. Consumers who are engaged hate being shown ads that are irrelevant to them, that are obviously not targeted. Great thing about search is that it has relevancy built in. Pretty good targeting. Display is the same. Consumer that’s been on a car web site within the last 24 hours, or few minutes, then they will get ads for cars. [Oh, not sure about MSN tracking what sites I look at! Cheeky.]

Big change happening in real world, but not in our industry. Notion that there will be no difference between online and offline is a big one to grasp. We’ll pick up any device and expect all our content, be able to search, even locally with a GPS-enabled device, and this will affect how consumers behave.

Need to start to put aside the barriers and decide how we are going to live in this world and maintain the industry we’ve built.

—-

Carolyn McCall now responds, basically saying that the Guardian is responding, although some areas of the media aren’t.

Q (Chris): Will news be edited to suit the advertisers?

A: Not necessarily, because of RSS. Content will stay purer than in an old world because you can target keywords so the content and advertising are always in sync. Consumers are more savvy, they know when they’ve been advertised at, and news brands will want to retain their purity.

A (Carolyn): One thing that will be more powerful in future is loyalty in trusted content. We are independent, we can write what we want, and that’s our biggest asset. So we have to be careful about that. So in this world where there is a huge amount more of user generated content, when you have a team of 50 foreign correspondence, there is opinion, and there’s news coverage.

—-

As an aside, it turns out that the wifi is not £15 for the day – that service is not available in the conference room. Here in the conference room it’s £10 for 30 minutes. That is, even by normal standards, absolutely outrageous. If I wanted to be online for the whole of the conference it would cost me £180.