Living on the Innovation Edge 2008
After being invited to a sumptuous lunch at the Google UK Headquarters and spotting Larry Page and Eric Schmidt in the lunch queue (no word of a lie - they were in town for the Google Zeitgeist), Jonny and I headed to the Innovation Edge Conference 2008 to add to our quota of multi-millionaires for the day. Lo and behold, Michael Birch, Bebo was wandering around in the auditorium as well as Bob Geldof. Geek-spotting over, we headed to our chosen expert seminars. These are the highlights for you...
Creating Access: How the creative industries are forging new ways to market
Patrick McKenna noted how 'fashionable' the creative industries had become of late thanks, he said, to (i) digital technology, (ii) regulatory change, (iii) consumer behavioural change. Those factors together have allowed the arts world to be more economically relevant which, in turn has caused a major shift in the engagement of the creative sector by the business and finance sector. Gone are the days when the large global media corporations stood as the gate-keepers to the world of creative content. Technology has allowed creative businesses to reach consumers directly.
The overall result: consumer benefit - the unit price of content is at an all time low due to piracy, peer-to-peer sharing and the availability of 'free' content on the internet.
Fred Bolza stepped in and was quick to point out that new access models, such as Facebook and MySpace have signalled a shift in focus to the user. No longer is content unit-based (i.e. based on sales of CDs, DVDs), it is user-based (i.e. how many downloads, how many eyeballs) and that often means that there is very little money passing from consumer to creator. Added to that, consumers have become more sophisticated from a young age, have higher expectation and shorter attention spans (i.e. if it's not available to download onto my new 'cam-fone-player', it's not worth having.) Changes in demand, supply and distribution have caused Sony to consider different monetisation strategies, one of which is to create 'licensed networks'. This would mean fees associated with the content carried by these networks would be paid by the individual internet broadcasting channels, which would be governed by some form of royalty payment rules.
His resounding piece of advice to content suppliers was, "Stay friends with technology". It is foreseeable that offering a better quality of output via a considered approach to the technologies available could spark consumer loyalty. In this game, loyalty = royalty.
Charles Cecil offered a unique insight into the effect of technology on the gaming industry and how it has come full-circle. Charles wrote his first game in 1981 in a time when there was direct communication with the end-user - the biggest market for games was at fairs and shows, at which writers and developers would connect with their audience. Investors then seized the market by buying distribution and publishing licenses, often holding little regard for the quality of the games and concentrating more on marketing to gain attention. This caused a period in which many games did not make it to market due to the huge barriers to entry put in place by the corporate investors. Fast forward to now and game writers are once more able to sell direct to the consumer via services such as Xbox Live Arcade where they can command up to 70% of any sales. The vociferous nature of the consumer borne out in feedback forums and blogs also means that writers have a direct nexus to their audience resulting in more consumer satisfaction and therefore, loyalty.
His key advice: If you are purely a publisher with no rights to the market, you are in a dangerous and short-lived position.
Anthony Lilley placed great emphasis on the importance of focusing on the 'architecture of attention'. Noting that the scarcity of attention is the greatest barrier to overcome now, he advised the audience to re-calibrate their consideration of how value is created for the consumer. Ultimately, we need to focus on creating 'attention experiences' (e.g. an enticing viral) or attention filters (e.g. Google) to succeed in the current market.
Simon Danker gave a good insight into the BBC's strategy for managing an audience that is spending more and more time online. Akin to bringing the mountain to Mohammed, the BBC is focused on delivering quality content to a niche audience (e.g. offering good quality clips of Top Gear on YouTube and creating Dave to offer the show offline to a largely 16-34 male audience.)
During question time, Fred offered the best rundown of the method of innovation: (i) understand your consumer, (ii) offer compelling content, (iii) provide access to your content across multi-platforms, (iv) ensure your consumer has a device on which to access your content.
I thought the seminar was highly informative and interesting. The panelists provided a lot of food for thought and different perspectives on the CONTENT : TECHNOLOGY : AUDIENCE debate. It will be very interesting to see which of the strategies outlined will succeed in today's consumer-driven market. For now, I'm off to flag down the free fun bus to Enjoyment via Experience on the information super-highway.
