Media Dojo

(Editor’s Note: this is a family friendly blog so only the title is NSFW. My wife is still getting over the barfing cat graphic from last week)

Last week’s salon on transmedia and Net Neutrality has been uploaded to the web. I suggest skipping through the first 10min or so because it just shows people kibbutzing before Hanson Hosein kicked things off. If you want the condensed version, the UW FliptheMedia blog has a summary of the main points.

Hanson noted that the salon took place at a fortunate point in the news cycle. That very day, the FCC voted to approve the Comcast NBC merger. Naturally, the conversation tacked around the core issue of who owns the pipes and how does that impact transmedia.

In a sentence, I think Comcast is trying to sew up supply right at the point when controlling the demand chain is the most important play in media and communications. By controlling the demand chain, I mean that successful media companies will start acting more like retailers and less like utility providers. Let’s face  the fact that we can’t identify a single $1bn pure-play digital media company that has launched in the past decade. Most every supply-centric channel or title orientated media player to emerge has resulted from some kind of M&A, not a start-up or even an existing corporation getting into media.

Contrast that with Google, Facebook, Twitter, Foursquare, and a gaggle of other companies that use media as part of an ongoing conversation among their audiences. Whereas a Paramount focuses on media audiences (eg. those who line up at the multiplex to buy a ticket), these latter companies are serving audiences that need media as part of their interaction.

Let’s also face another fact. From an economic point-of-view, the only way that 1+1=3 is for existing Comcast customers to start watching more NBC content or NBC fans on other networks to switch to Comcast. All the synergy and efficiency stuff is a distraction if they can’t make that happen. Moreover, both Comcast and NBC are M&A creatures in their own right. I remain sanguine about the merger for those very reasons. Not only is Comcast/NBC potentially TW/AOL redux, it’s happening in a radically different environment.

Effectively speaking, Comcast/NBC are two humping camels trying to make a horse.

Tonight, I’ll be at the University of Washington (“UW”, “yoo-dub”) as a guest of the Master of Communications in Digital Media program. Brent Friedman of Electric Farm Entertainment, Russell Sparkman from Fusionspark Media, and myself will attempt to make some sense of transmedia in the context of Net Neutrality—specifically “those who own the pipes” a la Comcast.

You can catch the event via live streaming. From 6-630pm PST, Brent will be interviewed by Hanson Hosein for UW TV. Then, from 630pm, Hanson will open up things in a salon format with the Digital Media students and the public. That also will be streamed live albeit at a different web address.

I’m sure there will be a healthy dollop of Church/State gnashing of teeth over Net Neutrality, which has evolved into a 9 headed monster that’s feeding the coffers of both industry and advocacy groups. Both sides tend to push a stereotypic binary choice of either embracing or rejecting the dark side of the force—(e.g. discriminating/optimizing network traffic). A quick pass through Content Delivery Networks (CDNs), caching servers, edge servers, mirror sites, packet discrimination based on media type suggests that we’ve been doing this since day one.

Moreover, we’ve moved into a multi-flavored Internet. We’re using the basic protocol suite to have an Internet of documents which we call the World Wide Web. We’re linking sensors and devices into an Internet of Things. We’re linking data, processing and networking into a Cloud. We’ve launched an app-based digital economy on mobile. Facebook and other social networks have created an Internet of ID and personal history. In other words, it’s a hell of a lot more nuanced than either side would have you believe. But then again, nuance doesn’t lend itself to sound bites and fundraising appeals.

Enter transmedia, which pulls from almost all of the previous mentioned Internets. Now, you’ve got media that in theory moves across multiple devices and contexts while carrying with it the ability to transact. By transact, I mean that a transmedia experience doesn’t simply involve the audience “consuming” or even “experiencing” a story, but interacting with a story through making choices—where to enter, which character to focus on, which enhancements to bring into the story, which social objects to contribute to the story, with whom to share those stories. In other words, transmedia crosses almost all of the current instantiations of the Internet model of communications, content and community.

That makes transmedia one, big fat regulatory hairball. You’ve got QoS performance issues so the pipe owners have a say. You’ve got multi-device experiences so the consumer technology players have a say. As people interact, personalize and share their experiences within the property, you’ve got social and privacy issues that need airing. Transmedia is a full-employment-pay-for-the-kids’-college-tuition Act for intellectual property lawyers. And you’ve got a Great Lakes sized plankton soup for an X-Factor innovation that’ll blow the whole thing up yet again…

….sounds like a party to me!!

If you haven’t read Tim Wu’s Book, The Master Switch:The Rise and Fall of Information Empires, by all means get it. It’s destined to be required reading for anyone hoping to master the Media Remix.

Tim has condensed the story of the rise/fall/rise of information empires in telecom, radio, film, TV and Internet, all without losing fidelity to the larger idea of open vs. closed systems and services that have consumed technology policy debates since the start of the last century.

Beyond the historical analysis, the true value of Wu’s book in my opinion revolves around the idea of whether today’s struggle over “Net Neutrality”—a term he coined—is different from previous battles in 20th century media markets.

I tend to come down on the side of “yup, it’s different this time around”—but probably not for the same reasons as Wu or others might argue.

Rather than a new technology or regulatory paradigm, I believe there’s a fundamental shift in audience behavior that’s driving the bus. I call it the difference between a hacker mentality and a consumption mentality when it comes to digital media. I think the bellows effect of gamer culture and social media has created the opportunity for a hacker approach to media to take root. Lest we forget, “hacking” in its intended sense isn’t about cracking computer networks so much as it is pulling things apart to understand what makes them work and find unintended possibilities. We used to call these people “inveterate tinkerers”.

Regardless of the particular philosophical bias toward media, both a hacker approach and a consumption approach are after the same thing with an audience—engagement. But how they get there are different. In a consumption centric mentality, the media creator and distributor are saying in effect, “we know what you want and it’s all right here”. Engagement is a function of how well the media migrates the audience along a formally defined story arc. It’s a train carrying people very efficiently along a hard coded path.

In contrast, engagement in a transmedia environment comes from the audience hacking into a story to discover new or unanticipated things, finding and even planting digital candy, contributing objects of self-expression and sharing the experience. Engagement in this sense is the media creator saying, “you’ll love discovering what’s inside this experience, especially if you bring a friend along”. There’s a story arc but many more doors for getting into the story at many more points.

Not every audience will want to be hackers on a story. It doesn’t matter. What does matter is that the proliferation of devices and socially infused media objects means that people finally have real choices for deciding how much or how little they want to engage with a story. Given that trend, it’s going to be a lot harder for new information empires to launch based on the traditional choke points of ironclad control over a media title, a channel or a device (sorry Steve).

The new empire builders will have to be more creative….

Over the next few weeks, I’m putting together a series of posts on how cloud computing and a changed media market will remix the digital media industry.

I use the term “remix” deliberately because what were once constraints (eg. bandwidth) are becoming assets and what were once assets (eg. channel specific rights to content) are becoming constraints. This remixing process is changing the face of competitive advantage in media.

A remix of the media industry is inevitable because whenever an economic good can be digitized and experienced on-demand; push oriented business models that depend on scarcity must necessarily yield to pull oriented business models that help consumers navigate a world of abundant choice. The fundamental challenge to today’s media industry is thus: what happens when end-users expect a persistent connection to media, applications and services regardless of their device or context, at a trivial cost or even free?

Murdoch plays Canute ordering the tide back with paywalls. The cable cos and the TV studios are locked in a fight over retrans fees. Netflix has Hollywood and Madison Avenue shitting kittens over near unlimited video (sans commercials) for $7.99 a month. Music execs remember how Apple pegged a music download at $0.99 and what that did to the industry. Of course, the notion of getting everything under the sun for one low price is irrational and short-lived. However, the problem—to paraphrase Keynes—is that consumers can stay irrational a lot longer than many of today’s media companies can stay solvent.

And what are the answers being offered to the media industry? Go to most any digital media event and you’ll find a conga line of professional conference whores advising media companies to link and/or twitter their way out of every problem, which is just a riff off of getting other people to whitewash your fence a la Tom Sawyer.

In the face of such uncertainty, I opt for a return to the recurring questions that affect any business: who buys? why do they buy? how do they buy? Media companies are in the midst of rephrasing their tasks as who engages with content, why do they engage, and how do they engage?

I contend that the Internet has solved only half of the problem of media, which is managing supply. The other half, demand is only being scratched. And yet, there’s nothing more powerful than knowing when and how a person comes into a market and is thinking about something they value. That’s scarce.

Moreover, the classic mix of product, place, promotion, and price doesn’t go away. I believe it gets translated into a new vibe—-a remix. The remix of media assets and constraints to create demand chains attacks the basic challenge facing media companies which is to produce media customers as opposed to producing just media content.

In this new world, owning the demand chain should be the goal of media companies.

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I plan to test some of these ideas in front of a live studio audience in a week. Hanson Hosein, who runs the University of Washington’s Master of Communications in Digital Media program has graciously provided a platform on January 18 with my fellow partners-in-crime Brent Friedman and Russell Sparkman. We’re going to riff at a public salon on Transmedia Storytelling and Distribution. If you’re around UW campus on that date, think about dropping in to tell me what’s wrong with this picture.

Back from a six month deep dive into the lowest level of the Media Services cloud. Sony was a hard taskmaster who also helped raise my game. Lots of days spent huddled over the screen or n conference calls to help develop a plausible media OS in the cloud. The main presentation went to the board last month. Now it’s about waiting for the cake to bake.

In the interim, there are a couple of things on the burner. During this month, I’ll be attending a 2 day Content Marketing workshop being putting on by the Langley Center for New Media. Content marketing is a drum I pounded incessantly during the consulting gig as the best means to introduce, educate and persuade people to work with a media services cloud. It’s not about interruption but about becoming an indispensable source for information and connection for your customers. Russell Sparkman has done a great job gathering some of the leading lights of content marketing including Joe Pulizzi from Junta 42, Andrew Davis of Tipping Point Labs, Eleanor Fry from Compass Content Strategy, and many others.

Later this year, I might get involved with Hanson Hosein’s Four Peaks initiative. Hanson directs the Master in Communication in Digital Media at the University of Washington. Four Peaks is an effort to establish the Pacific Northwest as the center of interactive storytelling in a similar vein that New York is the capital of the advertising economy or LA is the capital of the entertainment economy. Four Peaks will launch this year during Q3/Q4 with a big Seattle-wide blowout (the program will be good as well . I’ll update more as details emerge.

Apologies for falling off the map for some months but this Sony project sucked up all the bandwidth and then some. I’m under a pretty tight NDA so can only provide a few glimpses into some of the stuff we did. I’ve start work on the next Media Dojo e-book to complement last year’s Cloud Computing for Media People. Most likely, it will look into some of the stage II issues surrounding cloud-based media, including the two wicked witches—rights management for media in the cloud plus taxation.

So stay tuned. I plan to rev up production.

Here’s a quick shout-out to Sean and the rest of the Ooyala crew for raising $22 million in a D round. New investors hail from Shanghai and Tokyo to give an idea of where the next focus will be. Ooyala was among the first of the cloud-based media services companies to speak with MD when I launched it in early 2009. Looks like we’re all going global with this cloud media stuff. Here’s to raising a glass with you guys when we meet next in Monaco this November!

What day is it?

Summer is quickly drawing to Labor Day and I’ve hardly looked up from the screen, either at home or on a plane, in which I’ve spent a fair chunk of the summer. I’ve not been posting because I’m in the midst of helping one of the top three media companies put together a big-assed proposal for a media services cloud (soup, nuts, everything). We’re racing to a mid-September deadline. Then, like all things corporate, we wait.

I’ll pass the time by writing a report on the media business in the cloud for GigaOm and get back to more regular posting and interviews.

Also, I’m going back to Monaco this November for the Monaco Media Forum in order to do a main stage panel on Media and the Cloud. It will be almost evenly divided between media players and cloud players…will provide more detail as we get closer.

In the meantime, I appreciate the patience and will be serving up a lot more tidbits once kids get back in school.

Last week, I went to San Francisco to be a part of GigaOm’s Structure conference. One of the best cloud events by far, Structure gave me an opportunity to sit down with Michael Crandell, the CEO of RightScale. For media players trying to wrap their head around cloud computing, the cloud management space RightScale leads is destined to become one of their first ports of call. It’s not simply a case that a media company needs a control panel for spinning up or shutting down servers. The bigger play hands down involves how to use a cloud management offer as the vehicle that carries a project from sketched on a napkin to hard-core deployment and operations without needing to change a lot of the fundamental plumbing. Bob highlighted some of the work RightScale does with media properties like ESPN and Zynga. As always, you can check the Media Dojo Tear Sheet–RightScale

Media Dojo : Please describe RightScale and the problem it solves

Michael Crandell: RightScale is a cloud management platform that lives on top of an infrastructure as a service cloud. The big problem we solve is allowing companies to get quick access to cloud infrastructure, namely fast provisioning, pay-as-you-go and dynamic workloads. It’s an entire cradle-to-grave environment for delivering cloud-based IT resources. RightScale itself is a SaaS platform that’s a web-based management system. From there, you get a portal if you will into all of your data center resources regardless of where they are, whether they are in the same public cloud, different public clouds and regions, private clouds or hybrids.

MD: How does that play out in practice?

MC: It’s everything from an operational dashboard that gives you real time information around lower level things like monitoring and alerts to a whole tracking and auditing function, which is critical in a cloud environment. In a world where resources come and go, people need to know “what happened on that server that was running last Monday and it’s gone now—and everything about it is gone.” The server may have been part of a cluster of 700 servers that launched to complete a huge batch job or a grid job. It may have been running in a transient, scalable app front end. Now it’s gone. So you need to be able to go back and look at log data. We also track cost data along with the operational stuff. We can cut it any number of ways depending on the goals of the customer. There’s a metering function within RightScale. Related to operations and cost functions, there is a whole set of tools to establish user roles and privileges. You don’t want everybody to be able to push the Big Red Switch that literally stops all servers. There needs to have a high level of admin access.

MD: That’s fine for the cost side of the ledger. What about the revenue side?

MC: There’s also the area of design and architecture. We have IP around a concept we call server templates. These are innovations on the idea of machine images that allow dynamic configuration of boot time servers so they can adopt their role effectively, whether you’re adding another app front end, load balancer, database slave etc. As that server is booting up, it can find out via the server template and RightScale that it’s part of a given load balanced array of web front ends, for example. The server knows where the other front ends are. It knows where the load balancer to register with is located. It knows where is the database that it’s talking to. All of that is set in a template. The configuration is predictable with the variable information being fed in at launch time.

MD: Let’s switch gears to talk about how you work with the media industry..

MC: We work with a variety of media clients like ESPN with their fan profile site during March Madness as well as Sony Music, which uses RightScale to power their artists fan sites all the way to e-commerce. We also work with Sling Media, which uses RightScale to do a lot of back end transcoding so that a slingbox can handle most anything you throw at it. Sling Media’s problem is that they have all this content coming in from publishing partners that needs to be prepped on-the-fly for a variety of devices ranging from a phone to a big screen TV with different resolutions and codings. That’s a big back-end grid transcoding operation. In the music space, we do a similar kind of job with Tunecore. Then there are the social apps and games, Facebook type stuff.

MD: What do you see really pushing the cloud in the media space?

MC: We see a couple of things. In the gaming space, the console games are now heavily networked, which means there’s a big cloud component anyway. Aside from enabling MMORGS, another important aspect is that games are increasingly being played on lightweight front-ends (browsers and phones). Asia is leading this push not only because of high end phones and networks but also because on average, the discretionary spend once you get out of Japan, Korea, urban China is often lower than what you find in North America and Western Europe. So you might end up spending $3-4 hard currency to go to an Internet café and purchase some Zynga bucks to play whatever game. Those are almost entirely cloud based, resource intensive and are driving a lot of adoption and innovation as the demand scales. Last time I checked, RightScale powers the top ten Facebook apps that aren’t published by Facebook itself.

MD: Last question, looking out 12 months, what are you seeing driving the bus for cloud computing and media?

MC: What’s becoming a reality are hybrid clouds. We started day one with running solely on AWS. More public clouds then came on line as well as low level cloud management software like Eucalyptus, Cloud.com, VMware,etc. It’s now possible to organize your own internal data center resources under the cloud model. From our POV, that’s about more choice for the customer. We’ve been doing a lot of work on the private cloud side. Doesn’t mean you repeal the laws of physics. You’re not going to have your database in Philly and your web tier in Austin or Seattle. But you might want to have a disaster recovery footprint on a separate power grid in another part of the country. In the media industry, I think there will be a lot more streaming simply because the competitive thrust will be about getting media to the customer however, whenever they want it. People will also own copies of their content. Bandwidth has become fast enough to make that a reality. The cloud will be more important for powering that. Never forget, the lighter weight the device you’re using, the more that power needs to be somewhere like the cloud.

Of course I’m biased, but GigaOm puts on by far the best gathering of the cloud computing industry in June with Structure. All the C-level players who count will  be there: AWS, Salesforce.com, Google, Microsoft, IBM, Rackspace, Cisco, AT&T, the list goes on.

I’ve got my 15min of fame on the second day at an “Ask the Analyst” session. Basically, it’s going to be the cloud equivalent of the bullring experience from high school football. For those of you who didn’t play, you get in the middle of a circle of players, coach nods at someone, and they charge at you from any direction to try to knock you on your butt. And as the good book says, it is truly better to give than to receive.

Given that it’s a hard-core tech-savvy audience in San Francisco, I expect some very hard hitters coming my way. Keeps one on their toes.

Equally important to my analyst duties, I’ll be prowling the guest list of behemoths, start-ups and VCs on behalf of my major media client. Cloud is fundamental to a HUGE transformation they’re funding with some serious dosh. I’ll be collecting contacts for a corporate version of “The Bachelor” or “The Bachelorette” depending on the particular execs.

Should be fun.

Post Structure there will be a lot more interviews on site plus some of initial thoughts from the ongoing research I’m doing for GigaOm Pro on the consumer media business in the cloud. This is bullring on steroids.

I’ve been submerged the past few weeks for both personal and professional reasons. On the personal side, we’re selling my 89 year old mother’s house, which has 45 years worth of stuff crammed into it. For those of you who’ve walked in those shoes, you feel the pain.

Professionally, I’ve started a consulting project with the senior operations people at one of the top five global media companies. You love their music, movies and plug in their consumer electronics—get the drift? I can’t give a lot of specific detail for NDA reasons. But it’s no great secret that the physical supply chains for media (eg. from a master file to a CD/DVD sitting on the shelf at Wal-Mart) are undergoing profound change.  I don’t think there’s a clean flip from all physical to all digital production and distribution of media. People still like to own *stuff* at the end of the day.

That said, the transition to a new media supply model has cloud computing written all over it. Go ahead and Google “Digital Supply Chain” to see why. The number of linkages between finished and semi-finished media goods, co-mingled professional and user-generated content, commerce and community functions suggests that the cloud just might be the only institution capable of taming that kind of complexity. There’s definitely no lack of challenge here.

I’ll document some lessons learned in a couple of months.