introduction

methodology

existing scenarios

scenarios

concluding

3. Existing scenarios for the media domain

In this chapter, a set of six scenarios will be discussed and compared. This will shed light on the different ways scenario exercise can be executed. A general question for this chapter is; what can be learned from these different approaches?

3.1 The EPIC movie

In 2006, Robin Sloan and Matt Thompson released their short movie EPIC 2015. As a more up-to-date version of their very popular EPIC 2014 movie released two years earlier, Sloan and Thompson show their vision on the future of digital media, starting in 1989 and ending in 2015. In their view, Google and Amazon come to dominate the online spectrum in the coming years. Forming Googlezon, they combine the search engine Google with the social recommendation system and commercial background of Amazon. EPIC stands for Evolving Personalized Information Construct, meaning that everybody gets personalized information based on preferences, popularity and recommendations, mixing news messages with user generated content like blog entries, photos and podcasts. Sloan and Thompson indicate that in the years to come, a lot of people will get paid for contributing their content. These developments eventually lead to narrow, shallow and sensational content, which causes the withdrawal of all digital content of the New York Times from the internet… The newspaper will only continue to exist in regular printed format, on paper, for the elite and the elderly. 

Figure 3 Image from EPIC 2015 (Sloan and Thompson, 2006)

The EPIC 2015 short is a simple and appealing way to sketch the future. And, considering that Google has just bought YouTube for 1.65 billion dollars, EPIC probably sketches a rather plausible scenario (In a reaction to the Google takeover, one member of the YouTube community even posted a video clip in which she expresses the fear that in a few years, everybody will be forced to wear Google t-shirts). The strength of the EPIC movie is that it is very visible and accessible for many people. Whereas voluminous reports do not easily get read by a large audience, this eight minute movie that is accessible online, has reached thousands of people. The movie has incited the response of hundreds of them. People have taken the movie as a starting point to formulate their own visions of the future. One of the makers of the movie even states that people: ‘(…) connect our narrative to theirs -– what's going on in their lives, countries and hard drives. And they remix EPIC as well, translating it into different languages, weaving it into their own stories, drawing connections we never imagined. And while we watch all of this metatagging, remixing, creating and associating, Robin and I know 2014 won't resemble the future EPIC describes. Because 2005 already does’ (Thompson, 2005).
But EPIC 2015 is only one story, envisioned by two employees of the Poynter Institute (school for journalists, future journalists, and teachers of journalists; www.poynter.org). The movie is based on a feeling and a lot of discussions about the direction the online domain is going. And EPIC is not the only narrative about the future. There are more single stories about the future. Think for example about the novels A brave new world written by Huxley in 1932, Nineteen eighty-four, by George Orwell in 1949 or The third wave, by Alvin Toffler in 1980. These writers all had an idea what would happen in the future. But they do not offer alternative futures. So when the future has arrived, one can only say what came true and what didn’t.
But also scenarios exist that do not simply present the future in a linear way, but give clues about the possible directions the future can take. And they often present more than one scenario.

3.2 Four possible scenarios for media, news and entertainment

Andy Oram presents four scenarios for media, news and entertainment in a blog (Oram, 2005). He sees that, under the developments in 2005 (internet marketing and sales, blogs and podcasts, and the unstoppable flow of the larger economy), the field of media, news and entertainment can take four possible directions. Below, I will summarize his ideas, and quote some of his predictions.

1. The first direction is that practically everything stays the same. No new media develop online. This can be attributed to inactive users and the copyright regime. When economy is slowing down, the media are about to starve. The users turn away from mass media and rather focus on local initiatives like community theatre, dancing and live music
2. In the second scenario, the dominant players in the media industry regain some of their former success. People start buying content again. They might be driven by a desire to ‘understand the inexplicable, such as wars in far-away places involving cultures that view life in fundamentally different ways’. The conventional media profit from this revival and see their revenues from the sale of new books, TV shows, and other offerings rise.
3. The third direction is influenced by a large number of independent producers (bloggers and podcasters for example). These users are effectively generating attention (or buzz, as Oram calls it). Because independent producers (prosumers) do not have large budgets for their marketing campaigns, they depend on a more geographically local following. The risk of this development is, that ‘without professional marketing organizations to define channels, perhaps genres disappear; culture becomes a soup in which everybody tries to do a bit of everything’.
4. In the last scenario, new media will develop that suit the landscape of online digital media. These new online media are highly interactive. Instead of passive consumers, people become active users of media content. New structures are built to accurate views for the news, or multiple observers bring news from different viewpoints. Firms develop new ways to make money. And perhaps these ways are totally different from the old fashioned models from the past like advertising and subscriptions.

The above scenarios are interesting, but do not have a clear methodology, and Oram doesn’t draw conclusions. He probably has developed these scenarios based on his own experiences in the field. The way he describes the four scenarios is interesting, but in this deliverable I am looking for a more structured way to conduct a scenario exercise.   
In the rest of this chapter I will discuss four scenarios which have a more structured methodology than the above scenarios, and that have been developed for the media sector. The first is written during the MUDIA project, a European Commission-sponsored IST project. It is about the future of the news media and was published in 2001. The second scenario is developed by the Danish Technological Institute (DTI) by order of the European Foundation for the Improvement of Living and Working Conditions in 2002. In this scenario exercise, the future developments in the graphics and media sector are analysed. The third scenario stems from 2003 and is written by Gartner02 and The Berkman Center for Internet & Society at Harvard Law School. In this scenario document, five scenarios for digital media in a post-Napster world are discussed. The last scenario exercise is written by Gibbons and Linskey, also in 2003. They present four future scenarios for the entertainment industry in 2010.
These four examples give important clues for the methodology chapter and for the insecurities and drivers present in the media and entertainment industry at the beginning of the 21st century. Each scenario exercise will be described according to scope, the defined drivers for the industry, the methodology and the outcomes and conclusions of the different scenarios. After each scenario description I will mention some strengths and weaknesses of the exercise. I will discuss both methodological issues and issues concerning content. In the second part of this chapter, the scenarios will be compared to each other on more general grounds.  

3.3 The MUDIA project; the future of the news media

In 2001, Punie et al. have monitored and analysed current and future trends in European multimedia news markets. They have researched how technologies can change patterns in the production and consumption of news media. The scope of the project is to understand the changing role of information (and information providers) in a digital society. The research group has made a comparison between 1999 and 2000, and furthermore looked at 2001 to 2005 and beyond. Because the burst of the dot com bubble at the beginning of the twenty-first century brought significant changes in (too optimistic) future forecasts, a second research exercise was undertaken. For example the idea that all consumers would become producers was adjusted and dropped in rank. In this deliverable, we will only look at this second study covering 2001-2005 and beyond.
The MUDIA scenario exercise builds on the first exercise covering the scenarios for 1999-2000. The topic and objectives were already discussed and agreed on. In the first scenario research, the key issues and influences were studied, followed by the definition of the key variables or key drivers by expert workshops. The experts clustered and ranked the most important and most uncertain variables. In the workshop concerning the second scenario exercise, the experts only had to answer the questions what had changed in the meantime and if the drivers and scenarios were still valid. Also, new drivers of change were explored. Furthermore, the scenarios were tested and the implications for businesses were analysed. All scenarios should be significantly different from the others and “describe a plausible and consistent pathway to a plausible and possible future” (Punie at al., 2001 p.26). The last workshop activity was organized to agree upon future actions.
In the report, the authors state that the initial assumptions of the 1999-2001 scenarios that internet favours niche markets and individual users were too optimistic. Also the idea that users would become content producers themselves was adjusted. According to Punie et al., the main driver of change rather is the search for revenue for private online content. The drivers (can also be characterized as uncertainties or questions) that were defined for the European news media markets were as follows:

• Finding a revenue model (making a healthy business)
• Branding (helps users deal with information overload, trustworthy gatekeepers)
• Technology innovation (broadband and mobile technologies, standardisation, lowered production costs, delivery costs, billing, micro-billing, etc.)
• Dominance of a push model (maybe a broadcasting type of push model, editorial content model will remain important)
• Consolidation and co-existing development models (joining forces and strong competition)
• Customisation of content; new, emergent (content) demand and flexible delivery strategies
• Everyone ‘can’ become a content producer

In the outcomes of the research, four scenarios are sketched which are positioned along two axes;
1. Strong demand vs. weak demand
2. Free content vs. paid content

Figure 4 Integrated scenario framework MUDIA project, private content media (Punie et al. 2002, p.14)

Figure 5 Integrated scenario framework MUDIA project, public content media (Punie et al. 2002, p.15)

The four scenarios are: (1) strong demand for free content, (2) weak demand for free content, (3) weak demand for paid content, and (4) strong demand for paid content. The scenarios that are sketched in the report are not in narrative form. The focus points are presented in two integrated models that represent market dynamics for the private and for the public content media industries (see Figure 4 and Figure 5). This scenario framework combines three layers: industry structures (consolidation vs. co-existence), market dynamics (free content vs. pay for content and strong demand vs. weak demand) and content provision (push vs. pull). These are all placed together in an integrated framework, but diversified for the public domain and the commercial domain. The framework is meant to make sense of the changes in the media domain from policy or managing perspectives (MUDIA consortium, 2003). In the MUDIA project, the current market situation was determined. Together with stakeholders the project team organized a brainstorm about what would be the most plausible scenario for the future. According to the project team, the media sector is evolving towards more pay for content initiatives. But still, demand is relatively weak. They hope that users in the future will be more willing to pay for content than they are now. They assume that a more professional offering of content is needed to make the necessary changes.

3.3.1 Strengths and weaknesses

The strength of the MUDIA scenario exercise is the ability to describe multiple layers in the scenarios. The scenario is not only directed at content markets, but also covers industry structure and content provision. Furthermore, it has taken shape in a long-lasting process. Because of this, adaptations have been made in the light of real world developments. This makes the scenario more plausible and realistic. The weakness of the MUDIA project is that the scenario framework is not easily understandable without extensive explanation. I suppose the framework is successfully used in workshops with different stakeholders. But reading the scenario report, it is rather unclear what is the exact purpose and meaning of the graphics in the framework. Another weakness is that not all uncertainties defined at the beginning have a very clear place in the scenario framework. For example branding and technology innovation are not included. In a more descriptive approach, these concepts could be better explained.
Because the scenarios are presented in an integrated framework, it is difficult to evaluate the content of the MUDIA project. In the project report, the possible developments are rather briefly described. In the first scenario exercise, more attention was paid to the roll out of the scenarios, and the project team presented five scenarios instead of four. This made the scenarios livelier and better assessable. But still, the focus within the scenarios was mainly on business profiles, and the scenarios were rather briefly described. Looking at the additions made by the second scenario exercise, the MUDIA scenario already seems to be a bit outdated. The disqualification of user roles to be of importance seems premature. The past four years, user roles were increasingly important in the online media domain.

3.4 DTI; future developments in the graphics and media sector

In their report, the Danish Technological Institute stresses that in the past twenty years, ICTs brought major changes to the media industry, this results for example in new production processes, new ownership structure, new business models and new modes of consumption. The changes for the audio-visual industries are, according to DTI, more fundamental and complex than changes in other industries across Europe. They create four scenarios to understand the alternative futures, and to help structure a debate about policy and strategic decisions. The scenarios are developed for 2012.
To create their scenarios, DTI uses the TAIDA methodology. This methodology provides (just like many others) a structured process from analysis of the surrounding societal influential factors and structure to a plan of action. The methodology is developed by Kairos Future in 1993 (Kairos Futures, 2000). TAIDA stands for Tracking (changes and signs of threats and opportunities), Analysing (consequences and generate scenarios), Imaging (possibilities and visions), Deciding (choices and strategies) and Acting (short-term goals). DTI uses different reports to identify trends and uncertainties.

• Economy, market growth and investment capital
• Policy and legal frameworks
• Values and branding
• Technology and platforms
• Socio-economics – the evolution of an all inclusive knowledge society
• Product trends and consumer behaviour
• Organisational behaviour, skills and industrial relations

Uncertainties:

How the demand for digital products and services will develop.
To what degree will the demand for ‘focused, highly tailored digital value added knowledge services’ develop? And in this case, to what extent will branding, and easy navigation stimulate demand?
To what degree will a high-level convergence scenario be based on a growing number of users that are always online through various devices?
How will services be able to develop viable business models, will different types of user populations be willing to pay for digital services and products (directly or indirectly)?
How far will convergence between the media industries and other industries go, and which industries will be the driver for this development?

Four scenarios are sketched, along two axes:

• 1. High level of demand for digital products vs. low demand for digital products.
• 2. High degree of convergence with other sectors vs. low convergence with other sectors.

The scenarios are titled; Not the nine o’clock news (demand is high and the industry has a high level of convergence, Survivor (demand is low, high degree of industry convergence), 60 minutes (demand is high and industry convergence is low) and The nine o’clock news (demand is low and industry convergence is low). All strategies are further developed according to the focus points (1) society, economy and governance (2) consumer demand, (3) platforms and products, (4) industry structure, (5) labour market relations, and (6) organisational implications (skills and education, job routines and management). Because this deliverable is focussed on the user side of the media and entertainment industry, I will briefly summarize the scenario outcomes concerning consumer demand and consumer behaviour.
In the first scenario, Not the nine o’clock news, Europe is experiencing a general trend of liberalisation. A strong legal framework has been developed that secures digital and copyrights of individuals as well as businesses. The demand for new media products – especially entertainment products – is very high. Because of the development of open standards and enabling middleware, technologies are continually innovated. Interaction between different hardware and software components are made possible, and a lot of risk-capital is available. Because of this, technological barriers in the market are decreasing. Entertainment products are in great demand, and most media companies give the consumers what they ask for. This has an effect on the character of the media, but also on politics. The European political scene is becoming increasingly superficial and is often staged as entertaining arena.
The second scenario, Survivor, is sketching a different story. The development within the media sector is very different from what was imagined in the beginning of the century. Driven by technology and entertainment, new products are developed that test the borders of privacy and technological capabilities in many different ways. However, development costs of these niche products were too high, and the products never succeed in becoming successful in a large user group. No new and sustainable business models are developed. As a consequence, most media organizations that are not confined to the business of entertainment begin to focus on a different (and non-entertainment) part of consumer demand. Well researched, high-quality content is the norm and this (in a positive feedback loop) also stimulates demand for this kind of content. News-programmes, products relating to the exchange of opinions, and fact or learning based products are the fastest growing parts of the media industry.
In 60 minutes, the third scenario, it is stated that the world economy is not doing very well for quite a while. Most citizens are very oriented towards individualisation, and society is fragmented. Until 2008, developers of content concepts and services are not very consumer oriented. Technology convergence is the most important issue, instead of content development. Advanced technologies are available in the market, but few media companies have adopted them in their strategies. The main difficulty is to identify new consumer demands that can be matched with these new solutions. Traditional media products provide the main part of the profits in the sector, but turnover has not grown for several years.
Also in the last scenario, The nine o’clock news, the economy is not doing very well. From 2007 onwards, European countries have become very inward-looking. They are reluctant to open their economies for global competition. Some markets are even becoming less global than they were at the beginning of the century. In most European countries, people have become very nationalistic, and the demand for national content is high. International program concepts are no longer easily transferable. This has a repercussion on the export figures, because significantly fewer programmes are exported to more than one or two countries. Because of the negative economic climate, no large investments in the media domain are made. No new platforms for media consumption are developed. Most media companies outsource or sell their business areas and job functions to competitors.

3.4.1 Strengths and weaknesses

The strength of the DTI scenario exercise is that it is developed alongside a clear scenario methodology. The scenarios are very well structured and discuss the same subjects, all in the light of the particular scenario. But still, it is rather indistinct how the defined uncertainties have lead to the development of two axes. I think this is a weakness in practically all scenario exercises. After a list of drivers has been compiled, no matter how much experts rank these items, it will be unlikely that they reach total agreement on the two most important drivers. This will depend heavily on the approach and expertise of the experts. This causes the scenario axes to be (to a certain degree) arbitrary. I think this is not making the scenario exercise unusable, but it is something writers and readers should be aware of. The choice of the axes should serve the purpose and approach of the scenario exercise. 
With regards to content, the DTI scenario exercise deals with specific drivers within the quadrants very clearly. For all scenarios, (amongst others) the economic climate, the entrepreneurial spirit, media company strategies, and values in the population are assessed. This makes the scenarios better comparable. The scenarios are much more elaborate than the MUDIA scenarios, and discuss a broad range of issues. This makes the scenarios well embedded into the future society. A weakness of this approach is that the scenarios are somewhat divergent and general.

3.5 GartnerG2 and the Berkman Center; digital media in a post-Napster world

The third scenario is developed by GartnerG2 and the Berkman center in 2003. The main goal of this scenario exercise is to present five possible scenarios for copyright law applicable to digital media in the US. The scenario intends to spark discussion that can assist in the development of new business models for the entertainment industry, artists and technology companies, while enabling consumers to legitimately acquire and manipulate copyrighted digital media.  The scenarios are developed for the next five years. The report does not give an overview of the methodology that is used to come to the scenarios. This might be connected with the fact that this document is only used as input for a working session at a conference.
In this scenario study, the main focus points are revenues, costs, and consumer value. These focus points are analysed for content owners, artists, technology and consumer electronics (CE) vendors and internet service providers (ISPs). Furthermore, the drivers of the scenarios are the developments in: copyright law, technology evolution, consumer behaviour/ value. Because of the focus of this deliverable, I will concentrate on the developments of consumer value. Below, all five scenarios are reproduced.
The first scenario is called No change. In this scenario, the speed of technology development stays the same. In the legal domain, enforcement efforts by copyright holders and government entities achieve minimal results. Legal alternatives do not stop online illegal P2P file-sharing. According to the writers, this scenario is of value for consumers, for they have large quantities of media content at their disposal for free, or content is relatively inexpensive. However, over time, the market can shrink. Because of the developments, copyright holders/ creators are less willing to put their digital products into the market.
This second scenario, Taking property rights seriously, involves legal reform. Holders of intellectual property rights will have more control over their property. Although this scenario benefits artists and content owners, consumer value is very low or nonexistent. Consumers who purchase content online will not be able to move it to other devices. Furthermore, the costs for consumers will rise if ISPs and network providers are forced to increase their fees. This is caused by the added costs for these companies to comply with media companies and law enforcement requests.
Digital Rights Management is optimized in the third scenario; called Effective technology defence. Copyright protection code secures the majority of content. Portability of content will be allowed, but bound to strict rules. For content owners, artists, technology and CE vendors and ISPs, this will be a positive scenario. And when standards are reached, this will also be a positive scenario for consumers. However, costs will increase for all parties and the authors underline that the transition to universal copy protection must be relatively quick, otherwise consumers will seek for alternative sources of content.
Digital content will be treated as public utility in the fourth Utility model scenario. Intellectual property rights holders might be required to limit the amount or the pricing of sales of digital content. This legal model might suppress price-discrimination. The consumer value of this scenario is potentially very high. According to the authors, consumers would be able to access a large base of content, which they can pay for in a monthly bill. Content control and copy-protection issues would be substituted for pay-per-use agreements that specify how the content is to be used. The only difficulty of this scenario is the issue of whether or not consumers would accept the notion of their content being tracked.
The last scenario is called Compulsory license. This scenario departs from the idea that the copyright system we know now would be entirely replaced by a system in which the creators and producers were compensated by the government in proportion to the frequency with which their products were consumed. For consumers, this system would mean a reasonable alternative to free content. A government-run service that only bills them for what they use, along with a minor tax levy on blank recording media. Only consumers do not have to mind that a list of the content they purchase and own is stores on a central government server.

3.5.1 Strengths and weaknesses

The strength of the Gartner and Berkman Center scenario exercise is that the writers present a fifth scenario. This illustrates that more possibilities exist. Especially the fourth and fifth scenario descriptions are rather far-fetched and highly unlikely. But they present interesting ‘what if’ stories. The weak point of this exercise is that the way the axes are constructed is not documented in the report. This makes the process of the definition of the scenarios unclear.
Looking at the content of the scenarios, a strength of the exercise is that the scenarios focus on one particular topic; copyright law. This limits the scope of the exercise, but nevertheless makes it less diversified. A weakness is that the writers have very thoroughly marked whether the scenarios would be positive or negative for content owners, the public, artists, technology and CE vendors and internet service providers. With this assessment, they have stayed very close to the present day situation, while perhaps in the future, the situation would become different due to for example technological developments or changing social circumstances.

3.6 Gibbons and Linskey; scenarios for entertainment in 2010

In 2003, Gibbons and Linskey developed four scenarios for the entertainment sector. The aim of their exercise was to stimulate ideas and provoke debate about the development of the entertainment industries until 2010. They state in the introduction that things are changing. The entertainment sector is increasingly converging and also in technological development, DTI sees a growing pace and complexity. These disruptive trends affect value chains and traditional business models. But investments are costly and rewards remain uncertain. No clear methodology underlies their exercise, but on the basis of the above drivers and uncertainties, they have defined two axes:

1. The pace of technological development and uptake (convergence)
2. The degree of corporate consolidation, both vertical and horizontal (consolidation)

In the quadrants of these two axes, Gibbons and Linskey have sketched four scenarios: (1) e-Giants (high convergence, high consolidation), (2) Digital diversity (high convergence, low consolidation), (3) Land of the monoliths (low convergence, high consolidation) and (4) Lo-tech maze (low convergence, low consolidation).
In the first scenario, e-Giants, consumer demand is high. Multimedia are all around us, and always ‘on’. Content is easily transferable between communication channels, personalized, responsive and intelligent. The industry is predominantly vertically integrated and a few large companies are ‘brandcasting’. Because intellectual property is difficult to protect, companies are trying to make money through packaging around content.
In the Digital diversity scenario, the technological infrastructure is highly developed. Society is egalitarian and inclusive. Communication technologies, IT and media are integrated, and a large number of independent companies and content creators and providers exist alongside each other. The key differentiator of these companies is personalization and specialization. The willingness to pay among consumers is very high; they are willing to pay for both content and delivery. DRM systems are highly developed and widely available. Most consumers are creators of content themselves. And individual artists easily make money. They do not need large corporations and lawyers to ensure protection of their content.
The third scenario is called Land of the monoliths. In this scenario, a small number of media and technology conglomerates have survived and they dominate the marketplace. They are strict gatekeepers that shape consumer desire. The world is influenced by global political uncertainty, which leads to massive slumps in revenues and economic slowdown. Personal security is very important, and the focus is mainly on the safety and protection of existing communications networks. Convergence is low and few people have broadband. The consumer still is a couch potato; a large segment of consumers follow the mass media, and only a small part is taking part in an independent scene, and also contributing to content.
Lo-tech maze, the fourth scenario, paints a not so positive future. Economically, the world is in a recession. Only small companies have survived. To try to stimulate the market, governments are lowering the barriers to entry. Many consumers run their own companies, and are organized into co-operatives of creative entrepreneurs. Demand for local information and local talent is high. Consumer ignorance and a feeling of distrust regarding new technology combined with a lack of infrastructure and clear revenue models have not done innovation a lot of good. People are foremost interested in grassroots entertainment like sports and karaoke. 

3.6.1 Strengths and weaknesses

A weak point in the scenario exercise of Gibbons and Linskey is that just like in the Gartner and Berkman exercise is that they do not clarify their research methodology. Therefore, the two axes appear somewhat out of the blue. The scenarios are rather briefly-worded, which is a pity, because they seem promising. A strong point in the analysis of Gibbons and Linskey is the fact that after the more general scenario exercise, they sketch the consequences per entertainment sector; TV, music, film, games and live events. This clarifies the implications of the different scenarios per sector.

3.7 What can we learn from these scenarios?

A general observation is that although projects follow more or less the same methodology (defining and classifying the main drivers, constructing two axes and developing four (or five) scenarios that can be placed within the quadrants), the outcomes of the scenario exercises can be very different. The MUDIA project very clearly focuses on one scenario that the experts consider the most plausible future, and phrases some important conclusions around that scenario. The GartnerG2 scenario does not conclude anything, but uses the various scenarios to serve as input in a workshop. Some scenarios are much elaborated, while others remain more or less short stories based on keywords, or are minimized to an integrated model representing market dynamics. Gibbons and Linskey for example sketch the implications for the different domains within the entertainment sector according to the four scenarios. And the axes that are defined do not shape the whole exercise. The focus of the scenarios is also very much dependent on the way the quadrants are filled in with the different drivers and which questions the writers try to answer – a scenario directed at copyright law will yield different outcomes from scenarios focussing on new business models.
The way the scenarios are presented is also influenced by the aim and follow-up of the exercise. For utilization in a workshop with different stakeholders, the outcomes presented in a schedule like in the MUDIA project can suffice. When the scenario exercise is presented as a document or movie, the scenarios need to be more descriptive. In this deliverable, the scenarios are a goal in itself. The study is an exercise to explore future user roles. I will therefore pay attention to make the scenarios more lively and narrative. Below, I will compare the scenarios in general.

3.8 Comparing scenarios

This deliverable focuses on user roles. What user behaviour is present in the different scenarios? We will summarize all scenarios in one or two sentences, and compare the roles they ascribe to users and the position of content. Also the EPIC movie and the weblog by Oram will pass in review. Looking at the MUDIA project, only the scenarios for future private/ commercial content media are discussed. The results are presented in a table (see Table 2). At first sight, the scenarios are all different. But focussing on the broader issues mentioned by the scenarios, I have defined four major themes the scenarios cover (only scenario seven is not classifiable). Within these themes, the scenarios are not completely similar. The theme only reflects the general character of the scenarios.
The first theme of the scenarios is no innovation. A couple of scenarios (3, 12, 13, 21 and 22) depart from the notion that the sector will not know any innovation in the coming years, or that we will go back in time. No new players will arrive, users will not participate, no new business models will be developed and also on technical grounds, everything stays the same. This will result in users staying passive consumers that will keep on buying traditional media content, sometimes they will even demand more local content. No new platforms for media consumption will come into existence.
The second theme can be characterised by strict copyright protection (scenarios 2 and 15). Users will not be able to have access to their own content. Due to copyright protection law, users will be very restricted in their behaviour. Because prices are also rising because of service providers must comply with the strict rules, users start looking for alternative ways to get their content. It is even a possibility that users turn away from the online media domain completely.
A lot of scenarios focus on innovation and new business models (5, 8, 9, 11, 16, 17, 18 and 19). In these scenarios, technology, organisations and user practices/ demands will change significantly. New media develop that are better suited for the online domain. Niche players become successful and users are willing to pay for digital content. Content will be of high quality, tailored systems for digital rights management will be developed. These systems will give users enough freedom but still safeguard the rights of content owners and artists. In the scenarios developed by Gartner, they even consider (a little bit far-fetched, but that is allowed in scenario exercises) new payment models when content is a public utility or the government is taking care of the billing of content.  

Table 1 Comparing scenarios

The last theme of scenarios can be called active users. This idea is present in the EPIC scenario, but also in scenarios 4, 6, 10, 14 and 20. It is very striking that some scenarios sketch rather normative (read: negative) images of active or participating users. In EPIC, users start contributing big time to online content. Enabled by Google and Amazon, this content is filtered and combined to match personal needs. According to the EPIC makers, this results in shallow, sensational content that is often untrue. This negative view of users contributing is also present in other scenarios. Also Oram foresees that users contributing to the internet as independent producers will lead to culture as a soup in which everybody tries to do a bit of everything. In the MUDIA project, one quadrant is shaped according to a strong demand for free content. According to the project team, content in this scenario will be pushed by major media companies. GartnerG2 states that when users are not hindered by copyright regulation, artists and rights holders will be very reluctant to offer their content online. This will not be a positive development for the quality of content. And when users demand only entertainment products, the majority of content will be superficial (DTI, 2002).
Why are these scenarios so pessimistic about active user roles? One part of the explanation might be that the online media and entertainment industry was slowed down at the beginning of the 21st century because of the burst of the dot com bubble. Scenarios were drastically adjusted and slowed down too. We should not forget that scenarios try to say something about the future, but also tell us a lot about the present-day opinions of the authors. But our surroundings have already changed. As was illustrated at the beginning of this deliverable, the past few years we have witnessed a significant growth of user activity in the online media and entertainment domain. In that respect, the conclusion of the MUDIA project that users play a significant less important role in driving the developments seems premature. Of course also scenarios exist that put active users in a more positive light, for example the second scenario written by Gibbons and Linskey. But none of the scenarios pays extensive attention to user roles. In the light of the recent developments and the uncertainties within the media sector concerning these user roles, indicates that users might be more important than expected.

4. Designing four scenarios for future dynamics in the online media and entertainment domain

In this section, I will design the outlines of the four scenarios in the following chapter. I will follow the methodology described in chapter two. First, I will clarify the focus of this exercise by determining the subject and formulate the relevant question and the time frame that is used. I will also explain something about the aim and character of this scenario study. Secondly, I will sketch the main driving forces (and uncertainties) that are present in the online media and entertainment domain. This list is based on the listings of a number of structured scenario studies (the studies that are discussed in the previous section). A group of experts has reviewed this list and selected the most uncertain drivers. Based on this assessment, the axes of the scenario exercise are defined and presented in a scenario diagram. This diagram will serve as the skeleton of the scenario stories. I will sketch the components that will be present in all four scenarios. The actual scenarios will be dealt with in the next section.

4.1 Defining scenario focus/ scope

Future users in the online media and entertainment domain are the subject of this scenario exercise. My focus is on users at home, people who use media and entertainment applications in their leisure time. This scenario exercise will look at future user roles.  As was explained in the introduction of this report, users can become active in many different parts of the value creation process. User roles can focus on content creation, but also (among others) publishing, rating, tagging and consuming content. The online media and entertainment domain comprises all internet activities in the sectors of music, film, video, broadcasting, press and gaming. This is a very broad range of sectors. They have in common that (cultural) content is exchanged between users and producers.
The question that needs to be answered is; what can be possible new dynamics between users, businesses and technology in the online media and entertainment domain from a user perspective?The time-frame for this exercise is not precisely fixed, but as developments in the online media domain are very speedy, it will have the capacity to sketch the possible developments for the next five to ten years. This means that our scenarios will expand to the year 2015.
The scenarios that are developed will explore possible future user roles in the online media entertainment domain, and they will be written from a user perspective. This might give some new insights, for user roles were not the focus in other scenario exercises. Within the scenarios I will not only focus on user activities, but also on the dynamics between users, businesses and technology. As has already been noted in the introduction, although a lot of user activity takes place in the social, public domain, this will not be taken along as the main subject. This preference stems from my research interest which is also directed at user-business dynamics.
The scenarios will serve as reference scenarios. The study is an exercise to explore future user roles, and is primarily carried out as an aim in itself. Nonetheless, the scenarios might be interesting for workshops or can serve as inspiration for businesses and organizations interested or active in the online media and entertainment domain and the roles of users in it. They might be less suitable for strategy and government policy development. Furthermore, the scenarios are only applicable for the Western World, considered that no groundbreaking changes are about to happen on economical grounds, and the technological developments will have the same pace (only different directions) in the four scenarios. 

4.2 Defining drivers; analysis of existing scenario exercises

In the above section I have discussed a number of scenarios for the media and entertainment domain. All scenarios are about the media domain, whether it is the news media, the digital media, the graphics and media sector or the entertainment industry. The different projects have tried to identify drivers and uncertainties, which they have drawn up with help of experts in the field.
As explained in the methodology chapter, I have summarized and classified all drivers that have passed in review (see Table 2). They are grouped according to the main themes: economic issues, political issues, technological issues, organizational structure/ sector issues, and social dynamics. As Table 2 shows, the different scenario exercises have come up with rather similar drivers. The drivers can be roughly classified and lumped together within six categories; economic drivers, branding, technology developments, industry organisation, consumer behaviour/ value and policy and legal frameworks. Branding could be placed under a combination of consumer behaviour/ value and industry organization. To complete the list, the drivers are supplemented with other drivers that have been mentioned in literature, for example on the Future Matters weblog (www.futurematters.org). To determine the degree of uncertainty and importance of these driving forces, the list has been judged by a team of experts within TNO (The list of drivers can be found in the appendix of this report, see appendix one; the names of the experts are noted in appendix two). The experts made an assessment of the importance of the different drivers for future user roles.
It is not an easy task to come to a comprehensive overview of most important and uncertain drivers. As one expert remarked, the drivers might differ for different sub-terrains. A driver for User Generated Content can be a bottleneck for the movie industry and vice versa. It all depends from which perspective the scenario exercise is undertaken. Often the drivers linked with each other. Piled up in a list, it is difficult to compare them. As has already been clarified in the focus/ scope part of this report, our point of analysis is the user. Our focus is on user roles, but it is true the online media and entertainment domain is rather large. The only thing the different domains have in common is that content is exchanged and accessible online. The drivers will therefore be discussed in general terms and what they can mean for online user roles. Taken into account this focus point, the literature review and the comments made by the experts, below I will try to summarize and discuss the main driving forces for the online media and entertainment industry, seen from a user perspective. This will not be a list, ranked according to importance, but discussed in the five most important themes.

Table 2 Representing different drivers for the media domain

4.2.1 Economic issues; finding a revenue model

Most scenarios take economic development into account as an important driver for the development of sectors. Start-ups for example benefit from a large amount of investment capital. And when the economy collapses, this will be a bad thing for many sectors. Especially when the products produced are not necessities of life, like in the cultural industries. These developments are interesting and important, but looking specifically at user roles in the online media and entertainment industry, too general. One important driver (or bottleneck) for the online media and entertainment industry is finding a viable revenue model.
Users are accustomed to the fact that online, a lot of services and content is free. Often, the assumption is that advertisements will be the main source of revenue for firms in the online domain. But there also is a lot of experimentation with new revenue models, like micro payments. Some services even reward their users for contributing to the service (for example through generating popular content). As researchers in the MUDIA and the DTI project have remarked, it is an interesting question whether viable revenue models will be developed. When businesses have more options to generate an income from their online endeavours, this will be a driver for online services and applications, and also for the possibilities users have to make and distribute their own content. If they don’t; revenue streams will become a bottleneck. When parties are not able to develop a viable business model, they will possibly redraw from the online domain, which will affect user options. 

4.2.2 Policy issues; copyright protection and the case of DRM

Another important issue in the media and entertainment domain is copyright practice.  This issue is particularly connected to the online exchange of content; violation of copyright law, and especially the rise of peer-to-peer networks. It has received extensive attention in the media and from government institutions.  In the online domain, it is very easy to exchange exact, high quality copies of movies, photos, text and music. Rights holders are worried about the copying and file-sharing behaviour by internet users. They claim to miss out on income. An example is the music industry. The major record companies have employed different strategies to cope with this undermining of their power by suing downloading services and the users of these services, investing in technical solutions to prevent CD’s from being copied, launching marketing campaigns to make users aware of the crime they are committing by copying music and lobbying for stricter copyright laws (Bakker, 2005).
Should governments develop 7and more strictly apply more strict copyright law? In the technological domain, digital rights management (DRM) tools are often presented as the solution to the problem. Software will prevent illegal copying and enable right holders to exactly determine what users may or may not do with the content. Other people claim that DRM also has negative side effects (e.g. Petrick, 2004; Gross 2006). And the strict utilization of copyrights will hamper innovation in the media and entertainment domain, and keep income from the true artists. Alternative rights protection systems are developed, like the Creative Commons system. The way these policy/ legal issues will be dealt with will be important considering user opportunities and roles.

4.2.3 Technological issues; interoperability

There is a long list of drivers/ bottlenecks from technological point of view. For example the advent of wireless broadband connections; this makes internet more and more accessible. But also lowered production costs, easy navigation and new search and filter technologies are important technological drivers (or barriers) for development. An important driver of the developments in the online media and entertainment domain is the interoperability of technology. It will make a difference whether content is made portable to other devices, platforms and services or not. For example if a user constructs a weblog, can it be made accessible from different locations? And can the music that is bought from an online music store be transferred to various devices? It can be argued that interoperability will be a driver for the market, because users do not have to think about where they buy or create their content, after all they can play it on different devices. This driver (or bottleneck) is closely linked to the way organizations are structured. Firms actively deploy technologies to help them achieve their organizational goals.

4.2.4 Organizational structure; open or closed

Company strategies can become serious drivers or bottlenecks for the developments of an industry. Just like in technological developments and in dealing with copyright issues, firms can choose to take on an open or a closed strategy. This can be linked to a number of other choices a firm makes. For example, content can be offered in a free environment where everybody can enter, or content is guarded by offering it to a selection of users in a walled garden. The intelligence can be at the ends of the network with the users or reside in the network. The user can be free to make adjustments, or the online surrounding is institutionalized, limiting the options of the user. Firms can make a choice between strategies directed at innovation (helped by users), or try to find clues how to exploit their assets. Firms can decide to take on an open strategy and cooperate with other businesses in the field, or they can focus solely on themselves. As can be seen, the open and closed category has a broad range and can contain multiple important drivers and bottlenecks.

4.2.5 Social dynamics; top-down versus bottom-up

One very important driver in the online domain is the activities of users. One expert remarked that a paradigm shift can be discerned. Traditionally, new developments in the media sector were initiated by firms. These developments trickled down slowly to smaller businesses and consumers. Right now, the reverse is happening. New developments originate from user initiatives in society, become more and more important and find their ways to be commercialized by companies or are adjusted for more professional utilization. Examples are P2P technology and weblogs. This is a very important driver for the media and entertainment domain. An uncertainty coupled with this driver is how businesses will be able to convert these developments quickly into serious applications, with an open character and able to monitor the quality of the content.

4.3 Defining the axes

What will the axes be in this report?  With help of the experts, I have described the main themes of uncertain drivers in the above section. From these themes I have deducted two axes. In the social dynamics theme, user behaviour has been remarked as an important driver for innovation. But since user roles and behaviour is already the scope of this scenario study, it will not be taken along as an axis. Instead, I have defined two uncertainties that are present in the surrounding environment. These will have an effect on the way users behave online, how businesses are going to shape their business model and how technology is deployed by the different parties.
In the economic domain, an important driver and at the same time bottleneck was revenue. It still is an important question how firms are going to make money in the online media and entertainment domain. Especially when users are involved in a company’s business model (for example by adding user generated content) and the firm itself is acting more like a facilitator. How are firms going to make a viable business model out of this? It will be taken as a fact that somehow, businesses need to profit one way or another from the service. Taking this into account, I will define the first axis as; free content/ services for users vs. users pay for content/ services. A variation of this axis has also been present in the MUDIA project.
Looking at the three other themes, it strikes the eye that all themes have something to do with an open or closed character. Strict copyright protection or free flow of content, whether content can be easily accessed on different platforms and transferred from one service to another, and whether firms have an open or closed organization, are open to user activities or not. All these themes can be addressed when the second axis is defined rather generally as; open and free online environment vs. closed and protected online environment.
These axes sketch important uncertainties from an economic and organizational point of view. According to the experts, they will shape the developments in the online domain the coming years. Both uncertainties are to a large extent changeable, they are not fixed. How the online environment will develop depends on many factors.

4.4 Future users scenario diagram and titles

Looking at the axes, four scenarios can be defined. The scenario template is presented in Figure 6. In the four quadrants, the main keywords will be formulated that determine the scenario character.

 Scenario one (free content/ services in an open and free environment) is characterized by bottom-up developments. Users are active participants, creators, producers and distributors. Firms have no clear revenue models and therefore play a small part in the innovation process. This scenario shows some overlap with the Gartner 1 scenario the Oram 3 scenario, but the scenario is not focussed on local productions and the negative image of culture as a soup.

 Scenario two (users pay for content/services in an open and free environment) has the same characteristic as scenario one, considering the open and free online environment. But contrary to scenario one, new revenue models have been developed that let content and service providers (sometimes also users themselves) earn money. This scenario has some elements in common with Gibbons and Linskey’s scenario 2 and 4, Gartner 3 and Oram 3 and 4.

 Scenario three (free content/ services for users in a closed and protected environment) user communities are employed as marketing machines. Users act as gatekeepers and rate and tag content. Innovation is a continuous process and businesses act as facilitators and content providers. If this scenario would be combined with scenario 4, it would have common grounds with Gibbons and Linskey scenario 1.

 In the last scenario (users pay for content in a closed and protected environment) the main characteristic is the utilization of strict copyright protection. Businesses are very scared for copyright infringement, and users fear for their privacy. Users and businesses are strictly separated and innovation is hampered by harsh copyright protection. This scenario shows some overlap with Gartner 2, Gibbons and Linskey 3 and Oram 2. But the scenario will take place in the online domain and not only conventional media will play an important role.

The titles that I have chosen are;
Grassroots hobbyists – users that are developing all kinds of activities in their spare time, not guided or influenced by companies. The largest part of content remains free.
Marketplace M@rvels – users are very active in the online domain, really participating and they even get paid for their initiatives and user generated content.
Webworld billboards – user groups are predominantly used by companies as marketing communities. They are (amongst others) employed to select the best content online.
Bandits & cashcows – users are largely seen as consumers. Businesses try to make money out of the users and furthermore are very worried about the protection of their copyrighted material. They see all consumers as potential bandits that are about to steal their valuable content offerings, or as cashcows which they can relieve of their money.

Figure 6 Scenario template with keywords

4.5 Set-up

In the following section, all scenarios will be further dressed up. For each scenario, a cause for the developments in that particular direction will be presented. Which event, hype or experience has led the scenario to develop in a particular way? Thereafter, the story of the scenario will be sketched, guided by the keywords (see Figure 6). I will elaborate on user roles, the dynamics between users and businesses (e.g. revenue streams, the role of content, innovation), and the role of technology (e.g. copyright aspects, P2P). As a final point of interest, I will indicate some risks that impose a threat upon that particular scenario.