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What's ahead for Net, digital entertainment
The Internet and digital technology are changing entertainment at lightning speed. The coming years will scramble concepts of music-making, movies, TV networks and advertising. Last week, USA TODAY's Kevin Maney assembled a panel of some of the industry's most influential players to talk about what's ahead. The discussion took place in San Francisco in front of about 200 members of Silicon Valley's Churchill Club. Maney moderated. Following are excerpts.

Topic: Anyone can create media


Q: Blogs are taking off because now, anyone can create and publish text for the world to see. The same is happening in other media — it's becoming easier to make music, videos and even movies. How will that play out?

Chuck D: The fact that somebody in the Ukraine could just wake up and fall into their (home) studio and make some kind of material and submit it to a situation that can be heard worldwide — that, to me, is incredible. It's almost like a new radio. So that's what really had me understand that the music could run parallel with this new technology and create all kinds of new possibilities.

Q: In that world, how will people find the "good" music or movies?

Chuck D: A lot of people like to play basketball. I could do a different thing with a basketball than maybe Patrick Ewing or Michael Jordan. It doesn't interfere with the NBA. Eventually, the cream does rise to the top.

There's a lot of confusion in the middle part of picking and trying to find what is what. But as that becomes more solidified, then you'll see somebody finding an artist or a filmmaker or a blog writer from the middle-of-wherever in the world.

Ross: Right now, maybe people can figure out how to do basic photo sharing, but they don't know how to do recipe sharing. They don't know how to do anything else that's really interesting to them right now.

We're looking at a way to take all these different types of media, not just movies, not just animation, but anything that people like to do — and figure out how to let people manage that and share that simply and easily. For all the talk about blogs and all, to me, it's still just a buzzword. I don't think that people really know how to do a lot of this stuff.

Topic: Exploring effects of entertainment's 'long tail'

Q: What does the "long tail" mean for entertainment and media?

Ross: Companies can form around these little niche markets where they can sell this out-of-print book and make a killing just because there were enough people out there that were looking for it and couldn't find it for the last 10 years.

McNamee: The people in the middle have tried to be arbiters of what we could be entertained by.

They've been the determinants of what's a hit, what's not a hit. The great thing about the long tail is the consumers get to decide for themselves. They don't need somebody in the middle.

At the margin, what I think you'll see is a more direct relationship between content creators, artists of one kind or another and their fans.

The thing that's truly amazing about blogs is how many of them have seven, eight, 10,000 serious readers a day, which exceeds the average reader of the average column in the average local newspaper.

What's been wrong is that capital, the money, has always been tied to distribution. The reason my firm exists is to change that, to put the capital with the content, with the creative people.

You still have to get this into people's hands. But it needs to have a model that's less based on picking what people should watch and more based on giving them what they want.

Ramsay: We've discovered exactly the same thing in video.


We can measure it. There's maybe only a hundred people who watch bass fishing or speed knitting or whatever. So they watch it, and it's important to them.

What we've found is that the viewing patterns of people who watch live television — and are therefore restricted to prime time whenever they're home — are dramatically different than the viewing patterns of people who have the choice of just picking whatever they want.

Given the choice, people will migrate towards a much greater variety, and the deal is you've got to make everything available to everybody so that they're not restricted. And if you do, the market for that more esoteric, more specialized stuff is just as big as the market of the mainstream stuff.

Chuck D: If you're looking for that fourth Sam Cooke song on an album that's been out-of-print, then everybody sort of relied on file sharing for that.

But then the (record) companies came in and started to say, well, this is thiefdom. So there are brilliant possibilities, but the smoke settling and the dust clearing is a five-year picture.

Topic: Overwhelming choice

Q: If so much entertainment is available online and so much can be stored on hard disks on TiVo machines or personal computers, how will consumers react to that?

Ramsay: There's a lot of anxiety in the industry around just having infinite amounts of storage, where you can store everything and have your own server. It's ironic, because on the consumer side, what we hear is people get storage anxiety.

It's like, "I've got too much on this thing, I'll never be able to watch it." And they get worried about that. Well, why don't they erase something? No, they don't want to do that. You've got two sort of conflicting things there.

McNamee: We don't want to look at everything in real time. We just want to have a ton of stuff on some storage thing somewhere so that when the urge hits us, we can be entertained.


If any of you is an entrepreneur, I'll tell you what I want — I want TiVo for BitTorrent. I want a thing that gives me full automation so I never have to think about it, and every high-quality Cary Grant movie gets automatically downloaded on the hard drive without any intervention by me. Nobody has done that, and it's stupid that they've never done it.

Ramsay: Search becomes a problem. The search tools that you use to find information, like Google and so on, don't generally work in video.

When Yahoo put up their video capability, I looked up (the TV show) 24. I had to go through about two pages before I actually got to the TV program.

There's going to be a growing need for entertainment-oriented search technology and for personalization and recommendations — if you like this, you're going to like that. It's not about a hundred channels or 500 channels anymore; it's about 15 million.

Hendra: Advertising agencies will be able to embed advertising within search so that we can target messages based on what people are actually searching for and their preferences as we get into a more personalized experience.

It's just the early days. There's a ton more that's going to come.

Topic: Changes in music

Q: The music industry is struggling mightily with how to handle the digital era. Can you talk about that?

Chuck D: The artist Prince — he calls himself Prince again — said it's best to be on top of technology or else it will be on top of you. Technology has always ruled the roost, but the companies who are intermediaries are never first to admit it. They always thought that they ruled the roost.

I got involved with the digital online world because I wanted to be able to go peer-to-peer. I wanted to be able to go directly to the public without having somebody judge my art. It's just opened up so many wonderful things. In 1998, I saw that having a allowed me to go to many fans, not just in this country but throughout the world.

McNamee: Technology has transformed not just music, but it is gradually transforming every segment of media by making media mobile. Mobility has changed the demographics of consumption dramatically.

It used to be when you had to go to a movie theater to watch a movie or to your living room to listen to music or watch TV, that distribution could control the experience. It could control the time, place and price of your entertainment. Mobility has created time for people who previously couldn't buy or couldn't really enjoy media. It has given fans above the age of 25 — who still get minimum attention from the industry — it's given them the economic upper hand.

Ross: What the record companies are missing and the movie industry is missing, is that this is a way of life for kids. As kids grew up, (media) was always available to them. They're used to getting it on demand. They're used to going to the computer, and it's right there for them.

It's never been about oh, I don't want to pay X dollars for the CD. It's never been about undermining the record industry. It's always just been about the fact that I know the song is right there on the computer. I know I could download it.

I just can't comprehend the fact that it's there, and yet I'm supposed to go to the store and get it, because that's not the way that anything else works for us on the computer.

Topic: Getting music today

Q: Just curious: How do you find and buy music now?

Chuck D: For me, I have offline, online and midline. Midline is that you can order through the Web. Online means that you can go to places such as, which is an online retail shop which gets into all online retail outlets such as the Wal-Marts and the Rhapsodies and the iTunes.

Ross: On the Stanford network, there's a program that searches the network for any type of media and downloads it instantly, peer-to-peer. Of course, I only download — whatever the law is, that's only what I do. But that's how I find it. Or just through friends.

It's amazing how much content is not produced in a big warehouse but is produced by JibJab or one of these little media companies and makes the rounds on the Internet just through friends.

Topic: Video following music

Q: What do you see happening next in video and television?

Ramsay: The video world is lagging behind the music world in terms of this revolution that's occurring. It's actually evolving in very similar ways, but it's several years behind because of the technology. Obviously, video takes up a lot more bandwidth, and it's harder to distribute.

But there's no question in my mind that over the next few years, we're going to see a massive shift toward getting access to video content via broadband. You're going to see the same kinds of friction-free, self-publishing dynamic starting to happen. It's already happening. You can get on the Internet, and you can publish your video; you can make it available to anybody.

And it won't be too long before you'll be able to do that and charge for it. All the things that occur today in music are going to occur in video.

McNamee: There's a start-up called Akimbo that's about to ship a product. Its initial programming will be soccer from Europe.

It'll have things from India and from other cultures that have never been available because they don't have large-enough audiences to go on satellite or cable, but they have a plenty large-enough, and certainly devoted-enough, audience to go over the Internet.

Ramsay: Foreign programming is an interesting test case, because it fits into that same model that (Blake) was talking about a bit earlier, which is, if it's too awkward to get somewhere else and it's available on the Internet, I'm just going to download it.

If that gets to be really easy, you're going to see a flood of illegal downloading that could parallel what's been going on in music, led by foreign-language programming, because you just can't get it elsewhere.

Hendra: The networks are starting to try to figure out what they're going to do with all their content to fit the new world. They've got to figure out how to make money off it in a different way. It's going to take some people who have grown up on the computer and the Internet to change it inside those big companies.

Topic: Next-generation advertising

Q: If people have total control over their entertainment, how does advertising fit in?

Hendra: It isn't going to happen at 3 o'clock on Friday; everything's suddenly going to be a new paradigm. But I do think the next three to five years, we're going to see a massive restructuring. What's got to take place is big changes on the advertisers' side. They have to decide that they're going to join this transformational process, and they're going to change the way that they do things in terms of marketing and advertising.

Q: Is it hard to bring the advertisers around?

Hendra: There's still a whole generation of marketers and brand managers who grew up on mass media, and that has to change. It doesn't mean the 30-second TV spot will die. I don't even think that's the right question. We're still, even right now, able to use 30-second TV to drive people to that interactive experience. At the same time, we have to figure out — we're going to have these very picky and demanding audiences of one or 200 or 1,000. That takes a whole new set of skills to be able to target people that way.

Ramsay: In (the TiVo) experience, when you offer advertising to people, it's their choice. You say, here's something you might be interested in. You don't have to watch it if you don't want to.

I'm surprised at just how many people go there. You sort of have this notion that people will ignore advertising almost unilaterally, but they don't. And I think it opens up opportunities to do a lot of interactive, more personal ads, more targeted ads and more direct-response ads.

Topic: The state of the industry

Q: What else do you have to say about where the industry is going?

Ramsay: Entertainment is getting better. People have more choice. They don't have to watch stuff they don't want to watch. They don't have to listen to things they don't like. We're just at the beginning of that.

Ross: We can sit up here and talk about digital seismic earthquakes and everything, but the fact is that my grandfather still struggles with e-mail. People still hate computers and can barely figure out what we're talking about.

I want to see my grandfather blog about the war or make a movie about his experiences in his life before it's too late. People are missing that boat. We're designing (technology) for the young males and the hard-core-technology demographic.

As far as what's next for Firefox, it's about making every last bit of the Internet experience simpler until my mom is not yelling for me from the other room.

McNamee: Most major media companies define their technology strategy in terms of digital-rights management. Their view of the world is about controlling access to what they own. The next 10 years are about exactly the opposite. It's about the creative people and their fans getting together. Whatever it is you like, it will be increasingly available. It's time to give customers what they want.

It's now our job and the industry's job to actually do it. The old business models are brain-dead, and the body will die soon.

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