IGF in Rio de Janeiro, November 2007

Mainstream Media and the Internet

Alexander Shulzycki European Broadcasting Union

The Internet LandscapeCommercial StrategiesPublic StrategiesFuture Developments

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“Internet governance is the development and application by Governments, the private sector and civil society, in their respective roles, of shared principles, norms, rules, decision-making procedures, and programmes that shape the evolution and use of the internet.”

- UN Working group (WGIG) in July 2005

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Global Internet Activity

Online population growth over time (1995-2007)

Source: EBU based on comScore

0

200

400

600

800

1000

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Mill

ion

s

Only half of Europeans use the internet regularly and broadband penetration remains below 20% in many markets.

Global Internet Activity

Internet users per world region (Jun'07)

35,611

53,664

178,372

223,922

286,741

778,310

Middle East/Africa

Latin America

North America

Europe

Asia Pacif ic

Worldw ide

Total Unique Visitors (000)

Source: EBU based on comScore

Global Internet Activity

Average hours per visitor per month (Mar'07)

Source: EBU based on comScore

27.3

27.7

27.8

28.5

30.5

30.6

30.9

31.4

32.7

32.8

32.8

33.4

34.5

37.1

44.1

44.8

Taiw an

Colombia

France

Norw ay

Netherlands

Finland

Chile

US

Spain

Sw eden

South Korea

Brazil

Argentina

United Kingdom

Canada

Israel

Average hours per visitorper month

The Long Tail

The Long Tail - a relatively small number of web sites control vast amounts of traffic flow across the Internet.

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

1 6 11 16 21 26 31 36 41 46 51 56 61 66 71 76 81 86 91 96

To

tal U

niq

ue

Vis

ito

rs (

000)

Top 100 websites in Europe by total unique visitors (000)

Source: EBU based on comScore, May 2007

Global Internet Activity15 most visited Internet properties, August 2007, Worldwide

Source: EBU based on comScore

Rank Site Unique Visitors (000) Difference 06 % Increase

1 (3) Google Sites 561,090 92,794 19.8

2 (1) Microsoft Sites 525,541 19,494 3.9

3 (2) Yahoo! Sites 478,723 -3,255 -0.7

4 (5) Time Warner Network 270,084 46,045 20.6

5 (4) eBay 240,357 1,276 0.5

6 (6) Wikipedia Sites 210,811 72,170 52.1

7 (8) Fox Interactive Media 158,232 36,288 29.8

8 (7) Amazon Sites 151,944 17,001 12.6

9 (11) Apple Inc. 124,069 29,825 31.6

10 (13) CNET Networks 122,240 30,485 33.2

11 (9) Ask Network 121,604 6,139 5.3

12 (10) Adobe Sites 108,728 8,138 8.1

13 (20) Viacom Digital 92,373 37,539 68.5

14 (12) Lycos Sites 76,789 -16,298 -17.5

15 (42) The Mozilla Organization 72,514 37,471 106.9

These top sites have shown an average 25% increase in the last year.

The Long Tail

In the measurable universe of 15,000 sites, the total usage of the first 750 sites equals the usage of all the rest.

The top 5% of the measurable internet universe has the same number of users as the bottom 95%. (Unique Monthly Visitors)

0

100,000

200,000

300,000

400,000

500,000

600,000

1 1192 2383 3574 4765 5956 7147 8338 9529 10720 11911 13102 14293

Brief selected history of the internet

The internet infrastructure was created by large subsidies from the United States Department of Defense from the late 1960’s

Scientific, academic institutions lead development of applications The creation of www and browser software made the internet accessible

the general public In 1995 the US government gave up its backbone to seven private

companies Studies in late 90’s clearly indicated that the overwhelming majority of

users were strongly opposed to advertising. Advertising, subscription, shopping developed rapidly Someone said “Monolithic empires of mass media are dissolving into an

array of cottage industries....” The dot com bust, over-investment by media groups web 2.0, high advertising growth, increasing role of media companies

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Many advertisers shifting budgets from traditional media (radio, Newspapers)

Commercial Media Quarterly Internet ad revenues

Source: EBU based on Interactive Advertising Bureau / PricewaterhouseCoopers

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

1Q'9

7

3Q'9

7

1Q'9

8

3Q'9

8

1Q'9

9

3Q'9

9

1Q'0

0

3Q'0

0

1Q'0

1

3Q'0

1

1Q'0

2

3Q'0

2

1Q'0

3

3Q'0

3

1Q'0

4

3Q'0

4

1Q'0

5

3Q'0

5

1Q'0

6

3Q'0

6

1Q'0

7

$ M

illio

ns

Quarterly Internet ad revenues

With subsidiaries included, the top 3 media companies control 900 million users. (unique monthly visitors not unduplicated)

Commercial Media

Source: EBU based on Comscore

0

50'000

100'000

150'000

200'000

250'000

300'000

Mar-06

Apr-06

May-06

Jun-06

Jul-06

Aug-06

Sep-06

Oct-06

Nov-06

Dec-06

Jan-07

Feb-07

Mar-07

Apr-07

May-07

To

tal U

niq

ue

Vis

ito

rs (

00

0)

Time Warner Netw ork

Fox Interactive Media*

Viacom Digital

Sony Online

Disney Online

Vivendi

NBC Universal

RTL Group Sites**

Groupe Lagardere

Liberty Media Holding Corporation

Modern Times Group

SBS Broadcasting***

ProSiebenSat1 Sites

Evolution of large media groups' web properties

The Long Tail?“I listed every Internet property by subcategory and then distinguished

between the media-related properties and the non media-related ones. Once I’d bifurcated the properties, I calculated a ‘power rating’—a volume metric measuring total user minutes—to assess user engagement,” Miron explained. “While page views and unique audience are important, my power rating reveals share of time: Since interactive-media properties are supported by advertising and subscriptions, this seemed to me a good indicator of performance in today’s environment. Interestingly enough, I found that the 42% of Internet properties identified as being media related accounted for 70% of the power rating. What’s more, the top 10 media properties accounted for approximately 76% of the power rating when compared to the media property universe, and the top 100 media properties accounted for approximately 91% of that power rating. These findings alone do not support the existence of a long tail in interactive media. In fact, they support just the opposite: Interactive media is indeed the ‘land of the large.”

Lex Miron, executive director of CIBC World Markets’ Media and Entertainment

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Commercial Media negative effects of over-commercialization

• Pluralism – diverse points of view not heard; control

• Advertising – most people don’t like it

• Pay Models – exclude part of the population from content

• Diversity of content – homogenised product dominates

• Thwarted innovation – acquisition-monetization cycle

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Public Broadcaster Strategies EBU Members website reach - Aug'07 (% reach among national population)

More than one fifth of internet users in Europe visit an EBU Member web site at least once a month.

3.4

4.2

6.6

8.7

8.9

11.0

12.2

14.7

15.4

16.1

17.6

20.7

21.2

21.3

21.5

24.6

27.4

30.1

32.3

33.0

36.0

36.0

55.9

0 10 20 30 40 50 60

RTBF Sites (Belgium)

Grupo Radio Television Espanola, RTVE (Spain)

RAI Sites (Italy)

ZDF Sites (Germany)

RTP.PT (Portugal)

RTE.IE (Ireland)

France Televisions Interactive (France)

SRG SSR idee suisse (Sw itzerland)

ITV Sites (United Kingdom)

Channel4 (United Kingdom)

Groupe TF1(France)

VRT Sites (Belgium)

ORF.AT (Austria)

ARD Sites (Germany)

Sveriges Television, SVT (Sw eden)

NRK.NO (Norw ay)

YLE.FI (Finland)

TV2 Sites (Norw ay)

TV2 Danmark (Denmark)

Publieke Omroep (Netherlands)

DR.DK Denmark)

MTV3.FI (Finland)

BBC Sites (United Kingdom)

% Reach

Public Broadcaster Strategies

Public radio ranks first or second among radio sites.

PSB Radio Website Usage (in thousands) in Europe April 2007

Country total unique visitors to radio sites % to radio sites PSB rank

Austria 3,721 487 13.1% 1

Belgium 4,728 1,148 24.3% 1

Denmark 3,045 439 14.4% 1

Finland 2,818 399 14.2% 1

France 25,388 5,153 20.3% 2

Germany 32,578 9,344 28.7% 1

Ireland 1,365 107 7.8% 1

Italy 18,086 1,529 8.5% 2

SVT uses interactive solutions and services to invite the audience to have their say in public debates:

• Argument - programme connected to public opinion.

• Bobster - users can record their best joke and the video might be shown in TV.

• Folkets kommentator - users could make their own videos commenting a football game and the winner, selected by the audience, was invited to comment an actual game for the World Championship in 2006. This is an example of users’ creativity starting on the web and ending in a TV studio.

• Packat & Klart, travel programme - users are invited to send in pictures from all over the world and be part of a weekly competition to get the pictures published on Svt.se. They are also encouraged to make a video of their own reportage.

Public BroadcastersCase Study: SVT

Attitudinal research shows that SVT's most prominent quality is trustworthiness. Professionalism, quality and diversity are other characteristics that are associated with the SVT brand.

• As one of SR's missions is to make content for children, they launched a special website focusing only on content for this target group in 2002.

• In 2006/07 children became a highlighted focus area and obtained extra resources to create a new distribution form for children, combining both FM content and web unique content.

• SR Bubbel - a new web channel, launched in December 2006, playing only children's music. It was also aimed at supporting the production of children's music.

• Radio-apans ljudjakt (the Radio-monkey's sound hunt) - a game integrating radio and web letting children experience different sounds in an interactive way.

• Additional content - making more in-depth web content in connection to all radio programmes for children.

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Public BroadcastersCase Study: SR

• Website for disabled persons - reflecting the lives of disabled people including features, quizzes, podcasting, blogging, a community message board etc.

• Have your say - users can propose discussion subjects, ideas for a news spot, send their own videos or photos, vote on various topics etc. Sometimes e-mails get read out directly on air.

• Climate change experiment - in partnership with Oxford University inviting users to participate in the world's biggest climate prediction project and contribute to the debate on global warming.

• One day in Afghanistan - project initiated by BBC News Interactive, showing pictures of Afghanistan from people around the world. Raising awareness about living conditions in other countries.

• Live from Ethiopia - UGC project - reportage made live from Ethiopia. e-mailed questions set the agenda and the villagers tell their stories direct.

According to the Superbrands UK Web Survey, the BBC is the most trusted brand on the web.

Public BroadcastersCase Study: BBC

• To promote freedom of speech, democracy and dialogue Dr.dk has established many different services:

• Debate - this forum is led by DR hosts moderators. The hosts invite users to contribute their thoughts and ideas on topics they introduce.

• DR Blogs - consists of blogs from DR experts only and not from users. However, a new expert group made up of users will be added to this section.

• Local Heroes - a local pilot project where citizens could use the site as a platform for ideas and initiatives they would like to carry out.

• Candidate database - candidates in the municipal elections can display their profiles and explain their positions on Dr.dk.

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Public BroadcastersCase Study: DR

Importance of professional content

"...Internet over the past five years: blogs and (more recently) video-sharing websites have opened up new creative outlets to tens of millions of people around the world. At the same time, the appetite for professional produced content....continues to grow.“

“... no matter which medium or platform consumers turn to, the demand for high-quality content will always exist .”

- Vint Cerf, Google VP

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Importance of professional content

Professional videos are preferred to amateur productions online, but amateur content appeals to coveted segments of the young male audience.

Overall, 62% of online video viewers say that their favourite videos are those that are professionally produced, while less than a fifth prefer amateur video. Another 11% say they enjoy both professionally produced video and amateur online video equally. For young adult men there is a much narrower gap: 43% opt for professional video, while 34% say they prefer amateur content.

http://www.pewInternet.org/, July 2007

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Increasing demand for video content

• Social networking and UGC sites have driven the online video market and prompted media companies to act.

• Online video consumption tends to be additive and does not replace normal TV viewing

• Disputes with Apple

• New advertising techniques

• Launch of peer-to-peer networks

• Separation between the PC and the television breaking down

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Net neutrality: a looming crisis?

As online video reaches a mass market capacity problems will emerge resulting in renegotiation between content providers and network owners. Costs are likely to rise for broadcasters and consumers who are heavy online video users.

This may result in a toll-based internet which threatens net neutrality.

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