I started this scenario exercise because of user activities in the online media and entertainment domain and the questions these matters raise for the future. Users have taken the lead in online developments, but how will this affect the dynamics between users and businesses? By analysing various scenarios concerning the media domain, I compiled a list of drivers and bottlenecks and defined two axes. In the four quadrants of this scenario schedule, four scenarios were written that described the developments in user roles, user-business dynamics and the role of technology.
The scenarios mainly speak for themselves. But to gain some wider understanding about the plausibility of the scenarios and the wider implications they can have, they have been commented on by a group of experts. The group of experts from within TNO that already helped define the main drivers and axes was supplemented with experts from outside. These experts all had experience with scenario practices, the developments in the online media domain or were active in this domain (see for a list of experts and their affiliation Appendix 2). The experts were asked to comment on the scenarios individually. They have indicated some interesting and useful general observations. In this final chapter, I will discuss these comments.
It is clear that the experts not unanimously favour one particular scenario. One thinks the webworld billboard scenario is most plausible, another chooses a combination between this scenario and marketplace m@rvels, another prefers a combination between grassroots hobbyists and marketplace m@rvels. But that is not really a surprise. As has already been described in chapter two, none of the scenarios will predict the real future. This was also underlined by some of the experts; “we unfortunately can’t read tea-leaves”. Although a scenario exercise is well suited to demarcate the outer limits of the future, it is less applicable to sketch a refined view of all complexity. Scenarios have “near- caricature qualities” according to Wilkinson. Each scenario contains more or less plausible aspects. And according to one of the experts, for each scenario you can think of brands, organisations and users that can be fitted in. Most probably, various models will exist alongside each other, open and closes initiatives next to free alternatives and services that users need to pay for. Not all activities in the media and entertainment domain will transfer to the online world. And not all developments will be pushed by active users. For each scenario I will report the experts’ comments. I will discuss current developments that support the plausibility of that scenario, or the shortcomings of the scenario stories.
The first scenario mainly shows how users can direct bottom-up developments. User activities have become more and more visible the first years of the 21st century. At the end of 2006, Times Magazine even voted ‘you’, the user, to be person of the year. According to the magazine, users have influenced the news the most. Collective social networks changed the existing power balance within the media world. Most important threat of this scenario to develop will be if internet would loose net neutrality. The risk of too much free riders is classified as non important by one of the experts. Systems that build their communities on reputation and privileges already exist. And because of viral processes, good content and interesting communities will always rise to the surface. Furthermore, the worries about information overload have indeed largely disappeared. According to one expert partly because searching services like Google are taking up roles as information brokers, partly because ideas about information quality, truth and reliability are shifting. Next to the more traditional ways to present facts (as newspapers do), there has also developed inter-user liability, with large user groups as basis (for example Wikipedia). In many online communities, users value each other’s judgement very highly.
A reaction of one of the experts was that the first scenario story of Tubster can be nuanced. Not all user activity is based on users that are dissatisfied with existing services. Innovation is the consequence of many everyday processes. Small firms (sometimes started up by hobbyists) initiate many new services. The majority will not develop into a viable business model. But they all add up to the innovation process by showing to others what does and what does not work. A part of this innovation will be marketed/ commercialized or taken over by larger firms. Another part vanishes from the scene. This is of course true; real life is much more refined than these scenario stories are.
Also the fact that communities will be charged for illegal content that has already been on their servers seems unrealistic. It will legally be unfeasible. Content providers need to realize that communities are a good tool for viral marketing. It is more likely that developments will take us towards a more Webworld billboards scenario, where content is actively deployed to generate marketing buzz. In that case, firms should have faith that users who like the content will eventually buy it. Also the implementation of a license fee for users within communities will be unlikely. Services will probably always have a free basic service. Otherwise there are enough free alternatives available. As is already happening, many communities offer users extra services online, or additional options for which they have to pay. This model is more likely to be further developed.
Nonetheless these remarks, our present day situation can most probably be best classified within this first scenario. This is the way the internet started. If users can create their own communities with little effort, there is no reason that they keep on visiting the websites of large corporations. This is supported by the fact that until now, little Web 2.0 services already have viable business models. Two popular services for example, YouTube and MySpace, generate income through advertisements. One expert believes that this model supporting free content in the future will not last very long. Social networks will be much more costly if content suppliers (e.g. record companies, film companies and photographers) more seriously do something about copyright infringement on these communities. Google has already been charged for the content available on Google video. And Brazil has blocked access to the website of YouTube. So we will probably move towards more paid alternatives. But it is without any doubt that some grassroots initiatives will continue to exist in the future as well.
Also in this second scenario, users take on active roles. The difference is that they cooperate with businesses. The internet has become much more commercialized. This scenario is currently supported by developments in (among others) the internet community Second Life. More and more users and producers are making money online. One example, notably rather similar to the Dishion story, is the story of Veronica Brown. She is a fashion designer that makes a living of virtual lingerie and other clothes that she sells in Second Life. With this activity, she earns approximately 60.000 dollars per year (Sipress, 2006). The online economy is truly growing each day. One expert nuances this story by saying that only firms that have a target audience present in the communities will expand to the online domain. Firms that aim at other groups (for example at elderly) will not be very keen on developing an online business.
This scenario evokes contradictory reactions. Some experts believe that we indeed are heading towards more commercialization of the online domain. One of the experts remarked that a standardized online currency sounds realistic considering the online developments at the moment. Content (offered by content providers) will be divided between promotional content (fragments of content for example) and fully fledged content which users will have to pay for. Also the rise of user generated content is a fact. Users will be able to make some money online. Another expert endorses this view by saying that at the moment, users start to pay for content on websites and weblogs. Sometimes users even are rewarded by firms if they write about their products on their weblog. One example is Microsoft that has sent a number of laptops with the new Vista operating system to influential bloggers to test and write about.
But the experts also identify several problems considering online payments. Firstly, part of the experts does not believe that users will play true business roles in online initiatives. People will not be paid for their content on a large scale. Secondly, according to one of the experts, users will be less and less willing to pay for content alone. Right now it already is difficult to make revenue out of content like ‘news’. Newspapers for example are really struggling to develop alternative services to make some money online. New business models should not depart from the notion of users paying for their content. The users will still mainly pay indirectly, through advertising income. This statement can be nuanced a bit for different sorts of content. Users will probably be more willing to pay different sorts of content (for example high-quality content like financial information or scientific information, but also music, books, travels and pornography) or for extra services to search through and integrate content. Other products and services, like news messages and video content will be much harder to sell. But still, many people believe that for many services, advertisements will be the main source of income. But advertising might be done in a much more effective way than it is done now: personalisation, based on user profiles, will present very specific ads to a person if he/she is searching in Google. Even the results will be filtered, according to user profile.
It still remains unclear which model is going to prevail. But when the online economy is growing, many lawyers, policy makers and judges need to figure out if and how real life laws will be applicable in the online domain. Think for example about property, taxes and criminal law.
In the third scenario, users play a less active role. They still employ a lot of activities online, but are mainly mobilized by firms to promote new products and services. In the 21st century, firms increasingly see the internet as an extra marketing channel. In the beginning, firms only had a website containing information. But more and more, internet is deployed in new ways to strengthen a brand or interest customers for a product. Firms develop advergames; small internet games built around their brand or a product. Or the continuation of a television commercial can be watched on the internet.
One of the experts thinks this scenario is the most plausible of all. The online domain is more and more colonized by firms that try to enhance their brand names. Not all experts agree with this scenario. For example the fact that most content is free of charge for users (they might be paying indirectly because of advertisements), but in use is severely restricted. One expert thinks that the coming ten years, content will still mainly be sold outside the internet. Users in the end want something tangible. Even the younger generation, the users that grow up with free content, will eventually find their way towards paid content – if they have more income.
One of the experts remarks that in the future, content suppliers will be much better equipped to protect their content. The development of Blu-ray and HD dvd support this statement. Also more policy will be developed that allow internet providers to install standard filters. And it will be much more difficult for users to enter the internet anonymously.
The fourth scenario is mainly oriented in a top-down way. Users have few roles except for consuming online. Safety is the most important issue in this scenario, for users as well as firms. Technology plays a very important part in achieving online safety. The plausibility of this scenario is for example supported by the lobby of the content industry against piracy. But also more generally, since 2001 there has been more emphasis on safety, think for example about the ‘war on terror’.
Most experts consider this scenario to be the most unlikely. One expert remarks that this model already partly exists outside the internet. Traditional media, like newspapers, television and radio are very protective about their content and have for a long time resisted changes because of the internet. With content in large quantities available online, users have become less willing to pay for these media. But in the online domain, these media can never protect their content as has been described. This scenario is never tenable because there are too many free alternatives available. It is highly unlikely this scenario will come into being. And users are still not very willing to pay for online content – however this also very much depends on the price of the content. Maybe, when content gets a lot cheaper online, this willingness will rise. Another expert remarks that the limitations described in this scenario will simply not be allowed by international law.
This scenario exercise has been conducted to shed some light on future developments in the online media and entertainment domain. Some scenario stories proved to be more appealing than others. All scenarios have something plausible. Most experts believe that the internet will remain an open environment, but there will still remain some walled gardens inside it. About online payment, there is less agreement. Some experts believe that advertisements will remain the most important revenue stream for online businesses. Others also see different revenue models come into being in the future. This matter will continue to be an important subject for debate the next years, and it will also be an interesting research object. In the coming period, the future will take more shape. And it will be very intriguing to see which scenario or which combination of scenarios is going to shape the online domain.
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Appendices
Appendix one: list of drivers
Economic issues
Finding a revenue model
Market growth/ economic growth
Investment capital
Micro-payments
Internationalization
Political issues
Copyright law
Digital Rights Management
Political intervention; policy and legal frameworks
Policy aspects
Diversity
Technological issues
The advent of wireless broadband connections (always online)
Open source software
TV content distribution: internet broadcast TV and personal video recorders
Software patents
Standardisation/ interoperability
Lowered production costs
Easy navigation
Search technology
Network intelligence
Organizational structure/ sector issues
The BBC
Microsoft vs. Google
Content push
Editorial content vs. user generated content
Consolidation vs. co-development
Convergence
Flexible delivery strategies
Online advertising
Closed networks
Open networks
Social dynamics
Blogs, wikis, podcasts and RSS feeds
Power of social networks
Role of the prosumers
Consumer behaviour
Customization
User generated content
Evolution of an all inclusive knowledge society
Willingness to pay
Branding
Piracy
Global demographics (ageing population)
Content filtering
Appendix two: list of reviewers
Name |
Affiliation |
Assessment of drivers |
Review scenarios |
Peter van Ammelrooy |
Volkskrant |
|
X |
Lisette Derksen |
Hogeschool InHolland Haarlem |
|
X |
Jop Esmeijer |
TNO ICT and Policy |
|
X |
Valerie Frissen |
TNO ICT and Policy |
|
X |
Joke Hermes |
Hogeschool InHolland Haarlem |
|
X |
Miriam van de Kamp |
Erasmus University Rotterdam |
|
X |
Andra Leurdijk |
TNO ICT and Policy |
X |
X |
Matthijs Leendertse |
TNO ICT and Policy |
X |
X |
Sander Limonard |
TNO ICT and Policy |
X |
X |
Leo Pennings |
TNO ICT and Policy |
X |
X |
