Thoughts on Digital Convergence

Written by: Adam Christianson

Categories: Editorial

The MacCast always seems to get me thinking. This time, Adam, you got me thinking more and more about the topic of Digital Convergence. There are so many things going on in this area right now, I thought I’d share with you some of my observations.

The impact of the following issues are nothing less than dramatic . . .

  • Professional music and video is now competing with amateur music and video (the democratization of content).
  • New devices are being introduced daily that can support all different kinds of media.
  • People don’t have any more TIME to spend on content/media absorption
  • than they already do today (most important).

  • Viewing habits of an attention-span challenged generation are kicking in (people want shorter bursts of content).
  • VOIP is now ubiquitious and PC video chat applications actually work.

Traditional media, brick and mortar retail stores, service providers, and new network-based services are all hardening for battle. The consequences of this battle will be severe and permanent.

How are things changing? Let’s look at some examples . . .
Many frequent travellers and just about anyone who is mobile has realized that they can take their media with them. Not just on their physical devices like iPods, but by leveraging easy access to media anywhere there’s a network connection. Look at the success of devices like the slingbox – people now have true location independence and can literally stream their own personal media where ever they are. A traveller, instead of watching a pay-per-view movie or other show on a hotel television, might download a movie or a missed episode of a favorite TV show from iTunes. That’s one less pay-per-view movie sold in a hotel and perhaps a few less shows watched on traditional network TV (where an individual is no longer exposed to advertising).

Services like YOUTUBE and iTunes are competing more and more with traditional content and delivery mechanisms. Networks are starting to feel the pain and are offering clips and shorts of their most popular segments to try and retain audiences. You will find most people starting to split their time among all these different sources of content (including, of course, The MacCast). And, this content revolution is centering on the mobile computing platform.

To the point . . .
What I find that people most often fail to realize is that this is that all these shifts result in a ZERO-SUM GAME. It’s no wonder that it’s got everyone scrambling – there are real dollars at stake. When you move to a different form of content or a different delivery vehicle, you often don’t go back. In the early days of the Internet FEDEX started moving customers to “self-service” on the web – it was instantaneous, it was open 24 hours a day, and it was extremely convenient (accessible right from your keyboard). How many people who starting using the web-based tracking tool do you think went back to calling on the phone? Virtually no one…

I get most of my content through my PC or MAC today. I enjoy watching programs WHEN and WHERE I want (even if I’m just sitting in an airport with my EVDO broadband wireless connection. I’m not likely to go back to buying those shiny round pieces of plastic (DVDs) at Walmart. We all know what has happened to the market for CDs (latest victim – Tower Records). People simply don’t want to buy pieces of plastic – they scratch, they break, and they get lost.

Even on NPR’s “Talk of the Nation” they got it wrong. Their “expert” predicted that the 15 minutes of fame for YOUTUBE was up and that the pendulum was swinging back to professional content. WRONG! This cat’s out of the bag and he’s not going back in…

So what’s the bottom line?
The first thing is easy to predict because it’s already happening – DILUTION. More players means that people are going to have to split their limited viewing times across more products. Products that are probably a better fit for them because their choices are expanded. That means that advertisers will have a field day and will enjoy lower rates with better targeted demographics (new opportunities will abound).

The second thing that is going to happen is that digital media will continue to converge. People will MOVE to devices that can deliver all their content. I don’t know that this will be one specific device, in fact it will probably be a lots of different types of devices that will meet the demands of their owners. This is all just an extension of the move to digital content. Just as we are seeing the disappearance of the record store and CDs, so will we see the disappearance of DVDs.

Remember also that special types of media need special types of media players. You can’t play a DVD without a DVD player, but you can watch a movie on your computer or other digital device without a motorized “spinning” piece of plastic.

Speeding toward convergence . . .
Bandwidth continues to propel the digital revolution. Did you ever think 5 years ago that you could have a 6Mb/sec connection to the Internet for less that $50 per month? I sure didn’t. I still can’t believe that I’m sitting here now with almost 2Mb/sec over EVDO wireless (from Verizon). My kids can watch streaming videos or play games on the Internet in the back seat of the car while I driving around town.

Obstacles . . .
Battery life for digital devices is one of the biggest problems that we face today. As vendors boost the capabilities of their devices and platforms they consume more and more power. In reality, I believe that battery technology is improving – we are just consuming the additional power as quickly as it becomes available (so we’re not actually achieving improved usable times).

Retail loyalties and politics will also come into play as groups ban together to slow the progressive move to increasingly digital content. Walmart was said to recently threaten studios who might make their movies available through iTunes. Target reportedly removed all of the Disney advertising displays from their stores due to the unfair pricing advantage of digital downloads on iTunes – $12.95 for the recent iTunes release of the movie “Cars” vs. the DVD cost which was substantially higher.

Digital convergence is well on it’s way. It’s all good for the consumer because it gives us what we want when we want it. I hope this helps provoke some thoughts and comments from your readers on the issue.

There are 5 comments on Thoughts on Digital Convergence:

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  1. Jamie Davis | Dec 14 2006 - 09:41

    I think this is right on the mark. When I listen to Adam on the MacCast, he points out one of the downfalls of the iTunes Store video DRM is the inability to burn that video to a DVD.

    I think this is a case not of a missing product feature (ability to burn content to DVD), but a recognition that DVD’s are no longer necessary to present, preserve, and transport content.

    You can carry more movies on your iPod than you can carry on a DVD that is twice the size (in it’s case). You can use Front Row, the upcoming iTV, or a docking station to view content on a television. You can carry your laptop and a projector to any location and screen content for an audience.

    Excellent article — well done!

  2. Avner | Dec 16 2006 - 08:07

    I totally agree.

    Last week I cancelled my satellitle TV subscription. Between podcasts (thanks, Adam) and the iTunes Store, who needs (or has time for) broadcast TV? The new media is both interactive and time-shifted. I’m never going back!

  3. TK-421 | Dec 16 2006 - 10:53

    I think you’re close Scott, but a bit ahead of yourself. I don’t see iTunes movies threatening DVD’s for a while yet simply due to the large gap in quality and missing interactivity of a DVD. Until download speeds and Wi-Fi catch up to HD, and instead of just downloading the movie you download a disc image with extra features, I think the DVD will prevail.

    Portability’s great, but I think the masses still want quality.

  4. Reg Crandall | Dec 18 2006 - 05:36

    Digital Convergence? Companies are scrambling – and the crucial solution is two-fold: copyright protection and residual royalties to content creators.

    I found a new company – – that offers these solutions.

    The 9thXchange marketplace is the newest way to bring together buyers and sellers of digital content. The service dramatically reduces content piracy by offering the seller lifetime royalties — even on exchanges between consumers. Moreover, the service accommodates all technology platforms, file types and creators. I read about The 9thxchange in Crains Detroit recently.

    Reg Crandall

  5. Eric C. | Dec 18 2006 - 12:37

    I agree Adam does get you thinking and I agree with many of your points. I think one of the biggest issues as the established blend in with amaetur is people being over whelmed with content.

    I think this happened with the internet giving rise to the current power of google. Yahoo the former heavy weight was had their mostly directory based system turned upside down by search.

    I think finding the next generation of entertainment content is going to be through the age old system of recommendations.