January 16, 2006

The Dirty Dozen: 12 Predictions for Digital Audio and Video

With 2006 upon everyone is offering their predictions for the year so I figured I would throw my hat in the ring, especially as it comes to the future digital audio and video. Paul Colligan and Alex Mandossian over at MarketingOnlineLive.com got me thinking about this yesterday during one of their podcasts and 24 hours later I’ve got a list of what I think will transpire in the next 12 months. Enjoy!

1. Device convergence will happen more quickly than anyone realizes. When you’re walking down the street carrying both a cell phone and iPod (or other mobile player) and you bump into your friend who has a killer cell phone will all the same mobile media functionality as your iPod you’re going to want to switch…soon. The number of people who carry a combination cell phone/media player will grow significantly through 2006 and explode in 2007. Here’s a recent quote from Sun CEO Scott McNealy, “It’s going to be hard to sell a lot of iPods five years from now when every cell phone is going to be able to automatically access your library wherever you are.” I don’t think that’s going to take five years. Verizon has a phone with a 4 Gig chip on the horizon. The convergence trend will happen quickly. And when it does it’s likely going to mean…

2. The iPod could become the next TiVo. TiVo is a superior product to any other DVR on the market. It has a great interface and does pretty much everything very well. Yet the general consensus is that unless something changes soon the TiVo will go the way of the dodo bird. The problem? Distribution. Requiring a consumer to buy an extra box and an extra service means asking them to jump through two more hoops than they have to when they get a DVR from their cable company. Apple will face the same challenge with the iPod. As device convergence emerges people will begin to wonder why they need to purchase a separate device and load content on it when they can just do everything through their cell phone. So unless Apple makes significant strides in the mobile phone space their domainance in the mobile media market will quickly fade.

3. Google Video will be bigger than anyone realizes. Google Video appears to be able on the cusp of doing something that no one has really done to date: Allowing individuals a significant opportunity for monetization of video content. Their current video store leaves a lot to be desired but I trust that they will figure this out…after all, they are Google. And when they give people an incentive to produce quality video content and get paid 70 cents on the dollar for their efforts the game changes significantly. They’ll be empowering the little guy to sell video content much the same way that a certain little company called eBay empowered the little guy to sell products a decade ago. And we all know how well that worked out for eBay…

4. Satellite video will arrive…courtesy of the satellite radio guys. Two themes seem to be emerging in video: The ability of companies like Google Video and Netflix to meet the demand for long-tail content and the ability of Apple and others to provide space-shifted content (see Prediction #12). Space-shifting allows people to view video content whereever they are. I can watch content on the train on the way to work, when I’m at the gym, at home on my new HD TV (I wish…), etc. Who is best positioned to provide this? It just might be XM and Sirius, the satellite radio companies. Their mobile players offer a ton of potential and Sirius already has announced plans for video in 2006. It’s very likely the day will soon come when people consider ditching their cable or DirecTV subs for an XM or Sirius-powered satellite video service.

5. Real Rhapsody for the spoken word will surface. I love Real Rhapsody. And their new Rhapsody-To-Go service is killer and would be a huge hit if only Apple would take down the walled garden and let Real license its DRM. But enough about music…let’s talk about the spoken word. It seems to me like a huge opportunity exists to do for the spoken word what Real/Yahoo!/Napster have done for music. Don’t limit someone to just a couple of audio books a month (a la Audible.com). Instead give someone the ability to listen to whatever they want, whenever they want. If you’re an hour into an audio book and it sucks, fine, just jump to something better. There are a few companies right now vying for the non-Apple/Audible/iPod spoken word throne: Sounds Good, Jiggerbug and Simply Audiobooks. A tremendous opportunity exists for one of them to attempt to create a Rhapsody-like service for audio books. I’d be one of their first subscribers.

6. Audible will hit an unexpected snag with WordCast. Audible recently launched WordCast, their podcasting service to enable advertising and/or premium content. There’s just one slight problem. If I’m an author and want to get an audio book up on Audible’s website I’m looking at a royalty somewhere in the neighborhood of 15%. But if I take that same audio book and sell it through WordCast (complete with DRM if I wish) my take jumps to 80%. Does something seem strange here? I think at some point there has to be an acknowledgement that all of the “services” that traditional publishers and companies like Audible provide lose a lot of their luster in a world in which it’s increasingly easy to go directly to the consumer with your products. Somehow the gap between 15% and 80% will have to close and that could be a bit painful for Audible.

7. Podshow will focus on music and Odeo will focus on personalized communication. The two podcast-related companies that received major chunks of funding in 2005 will find themselves in a bit of a tough spot in 2006. The big boys like iTunes and Yahoo! have the directory game pretty well sown up and the market for podcast production software is becoming increasingly commoditized. But all hope is certainly not lost for these companies. The most sensible thing appears to be for Podshow to focus on the music side of podcasting, the area in which Adam Curry and Ron Bloom have the most knowledge. Becoming anything and everything to musicians looking to market themselves via podcasts seems to offer an incredible opportunity for the company and I hope that’s what their focus becomes. As for Odeo, Evan Williams has expressed a desire to be closely involved with facilitating personal communication via RSS. He’s a visionary in that regard and to the best of my knowledge, one of the few people talking about it. To the extent that Odeo makes it incredibly easy for people to send and receive podcasts to and from friends and family I think they have a tremendous business. Like Podshow, they’ll fail only to the extent that they try to dominate podcasting as a whole rather than focusing on a specific niche of what is rapidly becoming a huge industry.

8. OPML matching will arrive on the scene. This prediction strikes me as somewhat obvious but suprisingly absent from the current dialogue. If you and I each subscribe to 20 podcasts and it just so happens that 17 of them are the same then I want to know the three you’ve subscribed to that I haven’t and you would likely want to know the same thing. I’m not certain but this doesn’t seem like rocket science. To the extent that someone launches a service that allows for this and it reaches critical mass you’ll have an amazing discovery service for podcasts, something that will become even more important as tens of thousands of new podcasts come online this year. I’m not sure exactly what AmigoFish and Loomia are doing with their recommendation services but if they haven’t incorporated OPML matching yet it would be a great idea. And get Netflix to do this for movie queues while you’re at it… 🙂

9. Many “mini” multimedia portals will be launched. Music artists have fans. Many fans will buy whatever the artist is selling (hence, $40 concert T-shirts). Artists set up fan clubs. Fan pay annual fees for “goodies.” Everyone is happy. Now why not do this for authors, gurus, etc. Why shouldn’t a Tony Robbins or Tom Peters have their own multimedia portal? You could pay $20 a month and have access to exclusive audio and video content, RSS feeds and other stuff that fans of these individuals would eat up. A lot of big names could literally bring on thousands or tens of thousands of subscribers overnight. Do the math and consider that almost all of this revenue falls directly to the bottom line and you can see that we’re talking about a huge opportunity here. Companies like iAmplify, What is Enlightenment?, Integral Naked, The Great Lecture Library and many others are already doing something of this nature for collections of content. Multimedia portals around individuals are next.

10. Podcast prioritzation will become a reality. I want to be able to communicate to my media player that I have a 45 minute drive ahead of me and have the media player automatically figure out the best content to deliver to me based on the amount of time I have, the latest content that’s been loaded to my player and the preferences that I’ve given it ahead of time. Sound farfetched? It’s not. In fact, Taldia is offering something very close to this right now. The only problem with their system is that they haven’t incorporated prioritization into podcast feeds yet, just for the news feeds they offer. If they (or someone else) offers the ability to give me a “custom commute” I’ll sign up in a heartbeat. When that happens manually locating which podcasts you’ve recently put on your iPod, which you’ve listened to, calculating how much time you have to listen and how long each episode is…all that will seem so 2005.

11. Live event content will start to tap its true potential. Every day, around the U.S. and around the world many thousands of people say things worth listening to in classrooms, seminars, conferences and other forums. A very small percentage of that content is recorded. An even smaller percentage is distributed to a wide audience via the Internet. Why? You tell me. I haven’t been able to figure it out yet. If this content wasn’t worth listening to or watching people wouldn’t pay hundreds or thousands of dollars to attend these events. And while there are some benefits of attending a live event there are also some significant drawbacks. I think the market for the recording and distribution of live events is an incredibly huge one and hope that 2006 is the year when many people wake up to this. We’re hoping that efforts like Doug Kaye’s Conversations Network and our soon-to-be launched LearnDirect service will help provide the match that starts the fire.

12. New words will be coined and gain widespread adoption. This list of predictions wouldn’t be complete without a prediction for a few new words that will enter the lexicon in 2006. Here are some that I think will enter the dialogue this year as well as a couple that I’m definitely hoping will. 🙂

Space-shifting – As previously mentioned, this is the ability of content to be with you whereever you are. To the extent that content can be consumed anywhere it’s value increases tremendously. That’s incredibly important for those providing content and distribution channels to understand.

Dead-time Learning – Thanks to Paul and Alex who’ve used this term on their show for a while. Dead-time learning refers to turning time that is normally thought of as intellectually unproductive (e.g., commuting, exercising, etc.) into prime learning time. It’s taking your hour commute and using it to learn a new foreign language, study for a certification exam or stay on top of trends in your industry. By doing so you’ll free up more time to spend with your friends and family, devote to your hobbies and do the things that you previously thought you didn’t have time for.

DRM-free – People already use the term “DRM-free” but I’m hoping/predicting that it will become thought of as more of a feature in 2006. People will start to actively seek out DRM-free sources of content and show an increasing willingness to pay more for content that hasn’t had DRM applied to it. It won’t be because they’re looking to illegally share such content but rather because they want to have the versatility to share content they legally purchased across the increasing number of devices they own.

Learning Out Loud – My wish for 2006 is that people increasingly talk about their desire to “learn out loud” which I define as using audio or video content for personal and professional development. Part of this is a selfish desire as the CEO of LearnOutLoud.com and part of this is (hopefully) a very altruistic desire to see everyone become more educated this year. I truly feel that education represents the rising tide with the potential to lift all boats. And I also feel that in an era of globalization and increasing competition “lifelong learning” becomes less of an option and more of a requirement if you want to stay ahead of the curve and possibly even keep your job.

So we’ll see how this all shakes out. At the end of the day I’m more excited than 2006 than I’ve ever been excited about an upcoming year and many of the people I’ve talked to lately have expressed the same sense of hope and optimism. There are so many cool technologies coming down the pipe and the opportunity to effect positive and lasting change in the world is more real than it’s ever been.