My friend Sree Sreenivasan asked members an online journalism e-mail list for reaction to Microsoft CEO Steve Ballmer’s interview with the Washington Post, published this morning.
Specifically, Sree asked for reactions to this statement from Ballmer:
“In the next 10 years, the whole world of media, communications and advertising are going to be turned upside down — my opinion. Here are the premises I have. Number one, there will be no media consumption left in 10 years that is not delivered over an IP network. There will be no newspapers, no magazines that are delivered in paper form. Everything gets delivered in an electronic form.”
Okay. Here goes:
Ballmer’s talk about delivery gives him an immense amount of wiggle room. “Delivery” can be defined narrowly, to “last mile” delivery of content to consumers, or broadly, to include delivery at any point along the production process. If one takes a broad view of “delivery,” Ballmer’s prediction isn’t that bold, as IP delivery, within some point of any communication media’s production process, is almost ubiquitous today.
On the consumer delivery side, though, I think that Ballmer’s dead-on about television. He cited examples about video gamers, playing over IP networks, and the development of IP-delivered TV. People are sick of cable companies’ set line-ups of channels and want the flexibility to choose their own channel line-ups and set their own viewing schedules.
Ballmer talked about watching “Lost” over the Web. In my home, the only broadcast TV show my wife and I watched on any regular basis, we watched via NBC’s website. There’s no need for a DVR, or even a cable or satellite subscription. If the network makes the show you want available, you can watch it whenever you want, even if that network is not available in your area.
As fiber optic networks become more common, networks are going to have increased ability to cut out middle-man cable providers and affiliates, and instead deliver their content directly to consumers over IP. With consumer demand for flexibility on one end, and network avarice to keep all the ad or sales revenue to themselves on the other, look for IP delivery to take off in the next decade, as Ballmer predicted.
Of course, soon after, production companies will recognize that they can play the IP-delivery game, too, and cut the networks out of the process, as well. That’s why we’re already seeing networks turn to more in-house productions, to eliminate this potential competition.
As for traditionally printed media, I think the economics are tougher. That’s primarily because we’re here talking about a change in the medium through which readers receive their content. It doesn’t matter much to a consumer whether her TV gets its show via IP network, cable, satellite or over the air, assuming picture and sound quality are equal. But there’s a huge difference, today at least, between reading content on a screen and on a printed page. And, to this point, no one’s figured out how to get a piece of paper to respond to IP input.
I love books. I love reading The New Yorker in its printed form. The Internet, as currently delivered on my laptop computer and wife’s iPhone, serves me well for interactive content and for immediate news. I am a hard-core Web geek. But when I want to read in a more relaxed, contemplative environment, I continue to choose books and magazines.
Switching consumption media places both financial and behavioral costs on the consumer, which many consumers sometimes are unwilling to pay. Perhaps, when a magazine-sized tablet online news reader comes on to the market, one with paper-quality type and graphics, I’ll adopt that. But that product’s been “less than 10 years away” for a decade now. (The media geek equivalent of the Friedman Unit?) I anticipate its arrival about the time I get my flying car and jet pack.
Even if that tablet were to arrive this year, I think it would take far more than Ballmer’s “10 years” for its price point to beat paper, and for the public to adopt it to the extent that the market for printed material evaporated completely. (“Ballmer Unit,” anyone?)
But that’s just the consumer delivery side of the issue. What about delivery of content within the production process?
When I started in newspapers, just 15 years ago, we printed columns of copy from our hard-wired newsroom computer system, then walked them over to composing boards, where production folk waxed them, cut ’em up with X-Acto knives and slapped ’em onto pages. Those were then walked into the next rooms to be shot and produced onto plates which went on to the printing presses in the room beyond that.
Now, at most newspapers, reporters can file their stories over IP-based virtual private networks, where editors retrieve them, compose them onto pages electronically, then deliver the completed pages, again over the VPN, to a remote printing facility. So, even for content that is delivered today to consumers on paper, almost all of the pre-consumer delivery of that content happens over IP networks.
For more than a decade, publishers have dreamed of a day “in the not-too-distant future” when they’ll be able to extend IP delivery to that “last mile,” as well. With Web readers, that’s happened already. But publishers would love to offload their printing and delivery costs on to print readers too, with print-at-home newspapers and magazines.
Unfortunately for publishers, home printing technology hasn’t advanced as fast over the past decade as other computing technology, and the day when end users will be able to print professional quality news publications at home for less than the current cost of home delivery appears as remote as ever.
But that doesn’t mean that IP delivery can’t step in and play an even greater role in the production and delivery processes. National newspapers, such as the New York Times and USA Today, are published at many remote facilities around the country, due to the time sensitivity of daily newspaper production. As fuel prices rise and peak oil looms, it is logical to contemplate a future in which price sensitivity turns more magazine and book publishers to consider outsourcing more of their printing to regional satellite operations.
Of course, the paper still needs to be shipping to those printers. Maybe the business math will dictate that printing then occurs closer to the point of origin of the paper, to save on those shipping costs. Either way, I do believe that IP delivery of content to outsourced remote printing facilities will increase over the next decade.
About Robert Niles
Interesting article. However the stuff about print:
>Unfortunately for publishers, home printing technology hasn’t advanced as fast over the past decade as other computing technology, and the day when end users will be able to print professional quality news publications at home for less than the current cost of home delivery appears as remote as ever.
seems a little misdirected.
Nobody in a home wants to print out an entire publication, though they may well want to save & print a story or a crossword puzzle for various uses.
But what people do want to do is to be able to have more flexibility regarding where & how they read – in bed, bathroom, the yard, the beach, etc.
And the solution that’s in the technological works is ‘e-paper,’ a cheap flexible, portable, bright display-display only reader. The Kindle being marketed by Amazon is a step in this direction, but is not yet the killer ap version. But it’s in the works.
Sheesh. Consider the source. For those having trouble placing the Post story in the proper context, it’s interesting to consider that in August 1995 with the release of Windows 95 there was included along with the operating system disk a CD with a digital version of Bill Gates’ book The Road Ahead. What was remarkable about the original edition of The Road Ahead was that nowhere in the few hundred pages of Gates’s sage-style vision of our collective digital future was there any mention of the Internet. This at a time when almost everyone in the IT realm was not only aware of the Internet but viewed it as an oncoming locomotive. It should also be noted, this from Microsoft’s own anecdotal evidence, that among the pantheon of Microsoft’s very smart guys Steve Ballmer has never been considered the sharpest knife in the drawer. Frankly, if I wanted a prediction on the future of media I could probably find a just as well informed opinion by asking someone at random in a line at Starbuck’s.
The irony here is that the comments are coming from Ballmer, whose company is fighting for its life, just as our industry is.
I agree that broadcast media might be accessed solely from the Internet, but I don’t believe that of print media. I should say, not all print media. Newspapers will go, but I magazines will not lose their print importance. Magazines really aren’t only about the printed text. They’re a synesthetic experience of visual and tactile. There is a satisfaction to that which newspapers can’t seem to give as many people and an eTablet definitely will not be able to replace. The biggest obstacle to this will be, as Niles said, peak oil and access to environmental resources. I can only see people giving up their magazines where the cost of a print magazine becomes prohibitive because prices reflect the true environmental and labor costs of production.