DeepStrat is Go

I’ll post some goodies here from this week’s ad:tech San Francisco conference, where I was an advisory board member who helped choose 16 startups, just three panels of four finalists, for which were the best. I also was able to hit several interesting speaker sessions, including this one:

USC Professor Jeffrey Cole has been closely monitoring the rise of the Internet and the resulting radical shifts in our media-consumption habits for 11 years, in a process he calls similar to what it would have been like to follow television consumption in the 1950s. 

At the Tuesday evening keynote speech at ad:tech, Cole laid out some of the trends emerging from his very long look at what I like to call our Gutenberg Moment, including: 

—Schedules are almost gone, in media of all types, for most audiences. News doesn’t arrive once a day, TV shows once a week or music albums once every 12 to 18 months anymore. That transformation fueled what Cole calls Rupert Murdoch’s biggest blunder: paying $3 billion for a publishing company that told people when TV shows would be on. He later sold what was left of TV Guide for less than the cost of a single issue. 

—People don’t want too much choice, as retailers continue to find out online. As a result, 90 percent of our Internet time is spent in 15 places. It’s a different 15 places for each person but we tend to return to the same spots. The multiplicity of the Internet leaves most folks overwhelmed.

—The film industry has had its most serious decline in its history, which studios are blaming on the poor quality of their own recent offerings, rather than shifting consumption patterns. Now the studios are picking a fight with theater owners over premium VOD, which will shift the economics of theatrical distribution even further. 

—Music will move to a digital-only distribution platform in the next four to five years, as CDs move to the cloud for convenience, cost, environmental and other motivations. Recorded music already is becoming an ancillary market to merchandising, licensing and touring.

— Per capita sales in books have been “pitiful for years.” Already, 50 percent of us buy zero books a year. A large percentage of those who do buy books only buy one or two a year, and Amazon already makes more from digital than physical books. Books will return to what they were before movable type: expensive and dearly held objets d’art (I’ve been saying the same thing for a while now; It’ll be like the throwback revival of vinyl LPs, for a limited and discriminating crowd of otaku). Most people will own no more than 40 books.

Meanwhile, self-publishing, which was looked at as the last refuge of the vain or desperate writer, increasingly becomes a smart option that allows authors to keep more revenues to themselves. 

— The teen habit of newspaper reading is permanently broken. When Internet penetration hits 30 percent in a country, paper reading dies. Up until then, newspaper growth can be huge, which is why India, with 15 percent Internet penetration, is a great print publishing market for now. Cole recalled telling the newspaper industry several years ago that they had no more 25 to 30 years left in this country. They called him dangerous, and crazy, and wrong. But they didn’t call him what he actually turned out to be: an optimist. 

We’re no longer counting down the remaining two-newspaper towns (there are six). Now, we’re counting UP the NO-newspaper towns, which likely will soon include San Francisco. There will be a few  ”global powers,” such as the New York Times and Wall Street Journal, and not much else in countries with high Internet market penetration. 

— Cole believes the iPad is transformational, and will remain far and away the dominant tablet device for years to come (Gartner believes much the same, in a recent projection). When you talk to teens, they like to say they’re not affected by advertising and brands, but just try giving a teen an MP3 player that’s not from Apple. And the rapid rollout of the iPad 2 means “Apple has moved the goal posts before the other team has taken the field.” 

Apple also has changed expectations for how we interact with computer-like devices. “I turn it on and 1 second later, I’m working.” 

Another interesting point: What the iPad and Kindle do is restore newspapers and magazines to their natural lean-back mode of consumption, giving them a way to be comfortably enjoyed in the places and mindsets where traditionally have enjoyed them. They were never going to do well in the lean-forward world of PCs.

— The death of the mouse is approaching quickly. Microsoft’s Kinect is an amazing system, and builds on what has been happening with touch screens and the Wii controls.

— TV is the medium that grows instead of shrinks in the middle of all this transformation. The gap between the home viewing experience and the theater is narrower than ever, and now TV is escaping from the home. Now we watch it in cars, on planes, in airports. It’s the first thing we turn on when we wake up and last thing we (maybe) turn off when we go to sleep. 

“TV becomes our constant companion,” Cole said.

For further proof, look at the record-setting audiences for live televised events these days, such as the Super Bowl. The reason is we’re having “co-viewing.” 

In the future, TVs will have a social-media crawl across the bottom of screen, and Cole expects there will be an app to coordinate PVR playback across multiple homes so people can watch a show together and comment remotely to each other about it. 

— The amount of time we spend in front of one screen or another explodes to more than 50 hours a week in a few years and for kids, it will be even higher than that (80 percent of teens sleep with their cellphone within arm’s reach). We can’t lose our phone because it’s never far away enough to get lost. 

—Privacy issues will continue to be a concern, but he expects targeted ads to survive and thrive once the shock of their intimate knowledge of us wears away. That said, several things will need to be done for brands and advertisers to increase consumer comfort levels:

• They need to tell consumers what is being collected.
• Privacy statments can’t be written in ways that only lawyers can understand.
• There need to be simple opt-out procedures, but those who opt-out may have to pay for the product or service instead. 

— He expects the same uncool factor that hit Friendster, MySpace and others eventually will hit Facebook in perhaps five years. It may get close to 1 billion users before that happens. Cole suspects there may not ever be another monolithic social media site but a more fragmented, targeted collection of them. As new social-media sites emerge, he urges brands to pay close attention and learn fast but don’t necessarily jump all in. “I think the learning curve needs to be much steeper than the action curve. Study, pay attention, watch.”

—The 2 percent who drop off the Internet each year do so because of they lost their connection when they changed jobs or broke their computer. Many of us have an “enough already” mindset about the Internet, but we want all of its many benefits without the downsides that vex us. It’s made us more productive, but now we’re working all the time, on weekends, at night, on vacation. People want more balance, they want to take control of the Internet, not got rid of it in their lives.

— In 2000, it was a PC-based Internet. In 2004, we saw an asterisk called mobile. “Now, we don’t think mobile is just important, we think it’s everything.”  Only 4 to 6 percent of us really need a full-fledged) computer. The smart phone (and the iPad) is becoming a replacement for the second screen, the computer.

 ”We believe the Internet is going everywhere with mobile,” Cole said (I strongly agree). 

Cole can be reached at cole@digital center.org. 

Getting excited about the upcoming AdTech conference in San Franscisco. I’ll be a judge on three panels of start-up companies. Booked my flight and hotel, and seeing some material on some of the interesting companies out there that we’ll be dealing with.