The New Multimedia: Holding down the hype
By Diana Day
Jon Healey
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When reporting technology stories, beware generalities such as “pretty soon” and “everyone,” said David Lieberman, senior media reporter for the Money section of USA Today.
We may be living in a “magical time” amid lofty promises that new technologies will change everything, he said, but it’s important to maintain a healthy skepticism and report technical stories without hype.
For Lieberman and his fellow panelists—Ben Fritz, a reporter for the entertainment trade journal Variety, and Jon Healey, a staff writer for the Los Angeles Times—awareness of economic, legal and statistical realities in entertainment technology are key to a healthy skepticism.
Wall Street has lost interest in entertainment companies over time, says Lieberman. Instead, new media is now a growth industry, and reporters should understand the financial underpinnings of each new technology in order to avoid another frenzied period like the early days of the Internet. Above all, teporters should ask questions such as, “Who pays for this new technology?” “How much?” and “Who has a clear competitive advantage?”
“Technology and business models go hand in hand,” said Healey, adding that technology often pushes business models to the edge, as in the case of TiVo, which challenges the industry’s concept of advertising, since TiVo users can skip commercials entirely.
Additionally, rampant music and movie piracy challenges the industry to look for new ways to cope with the reality of ever-adapting technologies.
Then again, the huge reports of losses could be another example of a hyped story, said Fritz, since the Motion Picture Association gets its numbers by assuming that every pirated copy would have been a sale.
“Technology is a more boring story than people try to make it,” said Fritz, urging reporters to “make [their stories] realistic.”
In addition to piracy, Fritz outlined three other examples of hyped media technology stories:
• The video game industry is bigger than the film industry. (Not true if you compare numbers closely, he says.)
• TiVo is killing TV. (Not necessarily. After all, many people still can’t figure out how to work it.)
• Consumers want all media on demand.
In general, said Fritz, it is important to understand that the industry measures and reports trends in misleading ways.
For example, video game companies include game hardware in sales statistics, whereas movie companies only report box office sales. This practice makes it appear that video games are crushing movies, when –- if you compare video game software sales only to movie box office sales—the film industry actually outsells video games by 35 percent, or $3.3 billion, said Fritz.
TiVo is another example of media hype, Fritz claimed, because research indicates 72 percent of TiVo users are still watching commercials. This means TiVo is not changing the nature of television watching as predicted, and television advertising is still healthy, he asserted.
However, Healey countered Fritz’s claims about TiVo when answering a question from Western Knight Center Fellow Laura Sydell. TiVo is easier to program than video, and it is “a fundamental switch” in the way we watch television, said Healey. TiVo, then, is what Healey labels a “disruptive technology” because it “changes the basic business model with or without the industry’s support.”
Ultimately, people will want all their media TiVo-like and custom-made to their desires, said Healey—particularly as today’s 18-21 age group ages and has children.
To illustrate, Fritz said that on-demand music services such as Rhapsody and Napster have 74 percent fewer users than programmed satellite radio services Sirius and XM.
So, which view is right? “They’re both right,” concluded Lieberman at the session’s end. People can have content programming, and “people who want choice have that capability now [too],” Lieberman added.
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