Focus: The Future Of The Internet

The Internet is a media in its infancy. It has been with us for only a few years and only recently has it begun to make inroads into the UK. As a medium, it provokes more questions than answers.

Yet the one thing which can be said about the Internet is that it is here and big businesses are beginning to sit up and take an interest in all things “Webby”. Service providers, for example, were once the domain of American companies no one had heard of. Now major communications companies such as BT are offering their own cut-price access deals and major UK cable companies are working on providing customers with interactive services through their TV sets. Microsoft has already launched an online magazine called Slate and is said to be working on an Internet TV channel. Already this year two advertising databases have been launched: UK Plus (by Associated Newspapers) and ADHunter (by New Media Marketing and Sales and some of the biggest names in the regional press including Northcliffe, United Provincial Newspapers, Johnston Press and Trinity Holdings). There have also been Internet sales houses set up by TSMS, EMAP and BSkyB in the last three months and the Electronic Telegraph will be sponsoring MediaTel’s New Media database when it launches next Monday.

Yet still the questions about the Internet’s future remain. Does it even have a future? Will it make money? Will it make business more efficient? Will advertising actually work on the Web? How many people will be using it in the UK within five years? As the views offered by our panel of speakers below show, it is also a medium which inspires controversy and a variety of opinions.

What do you think will be the most important changes happening to the Internet over the next five years?

• Peter Berrie, BT Internet Group Product Manager: there will be much greater ubiquity – everyone will be connected one way or another – home, office, public terminals, libraries, friends, school.
• Colin Donald, Editor at Flextech New Media: the most important changes happening to the Internet over the next five years will be the full integration of audio and video into Internet content as well as the introduction of tiered pricing to consumers to reflect differing levels of Internet usage . A widespread ratings service would also be introduced to overcome consumer fears about the availability of unsuitable material.
• Mark Aldington, Managing Partner at Optimedia: Ubiquity of access will develop from increased penetration via PC-based access at home and work, as well as increased access though TV and public access kiosks.
• Neil Morgan, Managing Director, New Media Marketing & Sales: The Internet will become available via TV sets and on low cost dedicated terminals. This will increase the audience and attract advertisers and sponsors.

Are clients showing more interest in and/or a greater understanding of the Internet and New Media?

• Peter Berrie: Yes and no. A lot of new arrivals are bringing along models from their traditional media which don’t apply. Three examples: the desire to do TV type ads to a customer base that doesn’t want it; the desire to do TV broadcasting over fundamentally the wrong medium; the desire to simply republish traditional media content more or less unchanged. However, at least there is now a lot of attention and creativity going into the New Media from the old media, and newer models are emerging.
• Colin Donald: Yes. Clients are becoming increasingly well-informed, thanks to constant coverage of both by mainstream media and also by the mainstream media themselves entering the New Media and Internet markets, taking their existing consumer base with them.
• Mark Aldington: Clients are not necessarily more informed about new media, they are just more likely to want to experiment than their agencies. The agencies however do not understand its relevance especially as they have not worked out how to make money from the medium. They are also not being pro-active enough to help their clients.
• Neil Morgan: Yes but there is also greater caution as well less rushing into the medium with a quick presence for fear of missing the boat. Importantly, there is now more acceptance that the Internet is here to stay and that a proper strategy is needed.

How will the Internet develop as a medium for making money (if at all)?

• Peter Berrie: Good question! Who makes money and when? Our own business cases show early investment followed by later payback and good returns on investment in ways that are fairly typical for start ups. But the industry offers worrying signs. For example, the latest news from AOL gives cause for concern: if you cannot make money at 8 million customers what does it take? I have trouble believing in advertising as the rescuer, and think in the end people will actually pay what it costs to deliver the killer applications, human communications, at a reasonable profit.
• Colin Donald: Development of Internet content may follow the model established by satellite television – free at first, with subscription later. Large volumes of free content will be ignored or not found by users, who will be attracted to sites run by large media owners, who can afford to promote them heavily on existing media.
• Mark Aldington: Making money from the Internet means being able to understand that old roles can’t necessarily be applied to the new market conditions. The Web is providing a commercial platform on which to manage a company’s entire business from acquisition/manufacturing to packaging to marketing and selling. Those companies that see this and act on it will succeed, those that don’t will fail.
• Neil Morgan: Advertising and sponsorship will be executed in cleverer ways than simple ad banners. Transactions (including pay per view of video databases), however, is the bigger opportunity I believe.

The New Media database will be launched on MediaTel’s website on Monday.