Dramatic developments in digital technologies and the diffusion of the Internet protocol as an open and efficient communication standard are wiping out the specialized symbiotic link between content and technology. That’s how Gianvito Lanzolla and Jamie Anderson see the digital world, and here they reveal three trends that companies need to prepare for.
In the past, media and technology industries operated through specialized value chains with clearly defined boundaries. Mobile phones were used to make simple voice calls, Walkmans were used to play cassette tapes, and computers existed mainly to crunch data. But new technologies have made it possible to convert different kinds of content – a radio programme, a book, a magazine, a song, a phone call – into digital data; in digital terms, there is little difference between them. At the same time, the Internet and other communication networks based on Internet protocol have made it possible to distribute this digitized content in costeffective and ubiquitous ways.
The extent and nature of these changes and their consequent strategic implications remain substantially misunderstood. While some studies have been made, they have mainly had an industry-specific focus, with the consequent limitation of overlooking the systemic effect of ongoing transformations. In order to address this limitation, we researched current transformations in media, telecommunications and technology companies and distilled three specific trends – digital interactions, digital distribution and ubiquitous digital reach. We also identified the strategic priorities to seize these trends. Digital technologies use discrete values, represented as binary numbers, for input, processing, transmission, storage or display, rather than using a continuous spectrum of values such as in analogue technologies.
The word digital is most commonly used in computing and electronics, especially where real-world content is converted to binary numeric form as in digital audio and digital photography. The Internet protocol (IP) and internet-protocol-enabled network enable the transmission of digital content to all digital devices connected to the network.
The uptake of digital technologies, and of broadband in particular, is changing the ways in which people interact and consume content. Increasing interactivity – as opposed to broadcasting – means that people will have more opportunities to interact with the content and create it, eliminate it, consume it, when and how they want. The first manifestations of these trends are the exponential rise of search for content, for example, the rise of Web searches; the explosion of blogging, to around 200 million globally; and social networking. In the analogue world, value capture for content producers was largely a function of production, distribution and retail scarcity; and it was extremely difficult for small-scale content producers to break into mainstream channels such as cinema and television. In the new digital world, however, production technologies have become increasingly affordable, and the barriers to content distribution and retailing have been driven down by the emergence of open content aggregators and micromedia platforms such as YouTube and MySpace.
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