User Generated Content Catches On

Some 40 percent of 2,200 U.S. consumers between the ages of 13 and 75 surveyed by Deloitte & Touche are making their own entertainment by editing movies, music and photos. You might not be surprised that 56 percentof all Millennials (ages 18 to 24) do so. But you might find it interesting that a quarter of users (65 or older) do so.

More than one in 10 Millennials are actively uploading their own videos on the Internet and 51 percent of all survey respondents are watching or reading content created by others. Some 71 percent of Millennials watch or read content created by others while 56 percent of Gen Xers do.

About 53 percent of Millennials say they would download more videos if connection speeds were faster.

But the survey also shows that traditional media, including television and magazines, remain part of the user mix. About 58 percent of Millennials say magazines help them learn about what’s “in.” Also, about 64 percent of users say they tend to pay greater attention to print ads in magazines or newspapers than advertising on the Internet.About 58 percent say they use magazines to find out about what's "cool and hip," such as clothes, cars and music. Perhaps more important, almost three-quarters (71 percent) enjoy reading print magazines even though they know they could find most of the same information online.

Millennials, though, are most receptive, as you would guess, in just about any area of "converged" or "new media" experience. About 64 percent want to easily connect their television to the Internet for viewing videos and downloading content to their television. About 60 percent want the ability to move their content to any device they own without any problems. Some 57 percent want an entertainment and communication device that lets them "do everything." Nearly half (49 percent) want a computer or similar device that will be the center of their household media experience.

Web, Internet, Unanticipated Consequences

As John B. Horrigan, Pew Internet & American Life Project associate research director points out, the way people use the Internet today was not necessarily the way policymakers were told people would use it more than a decade ago.

In 1993, thinking focused much more on applications related to education, health care and improving democratic discourse, for example, that would use two-way video.

Today, online interactivity means something different. It is commerce, transactions, content gathering and, unexpectedly for many, content production, or user-created or user-generated media.

Simply put, the way content, information, gossip and tastes get produced and distributed is changing. That sort of thing used to be highly centralized and expensive. These days, anybody can speak; anybody can publish; anybody can participate.

That implies a different sort of information economy in the future; a new way of getting messages out; a new set of influencers to work with.

Also, the emergence of user-generated content also shows another common artifact of transformational technology: it gets used in ways even its creators did not anticipate. We should now be preparing for something else that frequently occurs with technology transformations.

Change seems less significant than many would anticipate, in the early stages. But the changes are far more significant as the shift takes hold. We are about to hit that stage.

As one example, what do you think the primary purpose of an enterprise data network is today? What do you think the purpose will be in five years? How do enterprises create networks today? How do you think they will be created in five years?

Tom Austin over at the Gartner Group might surprise you with his answers. He argues that the primary purpose of an enterprise network in five years will be to support social networking (think Facebook). And where enterprises these days tend to create and operate their own data networks, in the future they will find themselves outsourcing a number of those functions, if not the entire basic architecture, to "compute in the cloud" suppliers.

The reason social networking turns out to be so important for enterprises is that it allows very-large organizations, or highly-distributed groups of people, to discover what skills and insights the other people have, in ways that have been impossible up to this point.

One researcher or consulting team might be working on a problem someplace, and not know that somebody else, someplace else, has insight that can help solve the problem at hand. Social networking will help organizations and people create those links. Today, much of that insight is simply trapped inside organizations because nobody can conveniently discover whether it exists and where it exists.

The move to a highly-distributed computing framework is driven by mobility. When most people are mobile or distributed, a highly-decentralized computing architecture, assuming only the existence of Web browsers and broadband access, is highly useful and efficient.

Telcos Practice "Strategic Indifference"

People who like the idea of rapid service and applications innovation typically are frustrated by the glacial speed at which network services operators move. In fact, the thought often arises that "pipes" companies, especially those dealing with actual "first mile" connections to actual users, are incapable of understanding threats to their business models.

Well, they do move slowly, compared with anything in the software world. There is no Moore's Law at work with construction, trenching, installing drop wires and network interfaces. Which explains the attractiveness of wireless alternatives.

That said, it also is true that incumbents do practice "strategic indifference." That is to say, they will seemingly ignore a threat such as VoIP, just as they seemingly ignored the advent of broadband access, in the form of Digital Subscriber Line and cable modem services.

You might not remember, but North American carriers were slow to understand mobility as well. As awareness grew, carriers simply bought the whole wireless industry.

The point is that the indifference is quite planned. If an innovation will harm current revenues, it makes business sense to plan to lose some market share and revenue rather than embrace the trend fully and lose even more money. Up to a point, incumbents will let attackers take share, on purpose.

If the innovation reaches a tipping point, where there are strategic drivers, incumbents simply pile on in a massive way. That's why the VoIP activity on the part of North American incumbents is so different from that of European carriers. In Europe, VoIP is past the tipping point, and incumbents must play. That point hasn't yet been reached in North America.

When the tipping point is reached, they'll move, and aggressively. But this is a matter of maximizing total revenue. If revenue is maximized by delaying VoIP, that's what carriers will do. If revenue is maximizing by making POTS more attractive, that's what they'll do.

Such carrier behavior is not "dumb." It is planned. In fact, other industries have been "dumb."

In fact, the music industry seems not to have understood the threat or the changes posed by digital media.

You can be quite sure the video industry has learned from that experience and is anything but complacent. No serious video executive takes user-generated content lightly. Everybody is taking steps to participate in a broader media landscape, though nobody yet knows how the business models will play out.

Of course, that also means nobody is going to sneak up on video incumbents. They know exactly where to look for opportunities and threats, and are doing so. IP video will not be a replay of VoIP, in terms of executive denial, simply because tipping points might be somewhat clearer, and because change in the video software space will not entail the massive capital spending carriers must yet contend with in migrating to a broadband, all-IP future.

Video contestants will move faster than you might think.