Report to the
by

The Content Challenge Techno-Z FH Research & Development
By the COMMISSION OF THE EUROPEAN COMMUNITIES,
Directorate General XIII, Telecommunications, Information and Exploitation of Research.
Neither the Commission of the European Communities nor any person acting on behalf of the
Commission is responsible for the use which might be made of the following information. The views expressed in this report are those of the authors and do not necessarily reflect those of the
Commission of the European Communities.
Any reproduction or re-publication of the contents (including, but not limited to, texts, pictures, diagrams, charts, tables, or any other portion) of this report without prior authorisation is strictly prohibited. All rights reserved. Nothing in this report implies or expresses a warranty of any kind.
Results from this report should only be used as guidelines as part of an overall strategy.
© ECSC-EEC-EAEC, Brussels - Luxembourg, 1997
Editor
Contributors
Peter A. Bruck
Hannes Selhofer, Lydia Würfl
The "Content Challenge" study was written by
T ECHNO -Z FH F ORSCHUNG & E NTWICKLUNG for the
European Commission, DG XIII. We would like to thank Mr. Bernard Smith, the responsible project officer, for his interest in our earlier work and his initiative to adapt our study on Electronic publishing for specialist audience. We would like to thanks also Mr. Kieran O´Hea for his valuable comments and his co-ordinating efforts with other related reports. We acknowledge also the discussions with our colleagues Mr. Uday Phadke, Mr. Paul Ormerod and Mr James van Oosterom from Informed Sources, who have authored the sister report on technical innovations. We welcome feedback and comments from all readers. Please address all correspondence relating to this publication to:
Prof. Dr. Peter A. Bruck Ph.D., MA
Techno-Z FH Forschung & Entwicklung
Jakob-Haringer-Strasse 5
A 5020 Salzburg
FAX: +43 662 45 61 74 e-mail: bruck@newmedia.at
Page 2

The Content Challenge Techno-Z FH Research & Development
This report addresses researchers and developers working in information engineering. As contents become more and more „programming rich“, information engineers have an increasingly important role. They provide the product features and the service functionalities which make new media „smart“ and machine-intelligent. Information engineers are thus a new breed in the media industries, they are at the core of the value added through advanced technologies to traditional contents and their means of production, storage and delivery.
Information engineers come from different backgrounds and different industries.
They are software trained and programming oriented. As their role increases in the production process and their share in the value chain expands, they need to broaden their perspective and include business and media reception issues which hitherto were left to other people and departments. They can do their jobs better in taking into account the general economic dynamic of the newly emerging content industry.
This report addresses the broader issues of a sector most vital to the quality of the information society. Major parts of it are adapted for this target audience from the
EL-PUB 2 study "Strategic developments for the European Publishing Industry towards the Year 2000", which was conducted by
NDERSEN
ONSULTING
and the
IENM (Institute for Information Economy and New Media at Techno-Z FH-
Salzburg) for the European Commission, DG XIII, in 1996.
The emphasis has been narrowed on presenting the business challenges and business models of what we will call the Interactive Digital Media Services
Industry. Right from the start we wish to put the focus on the fact, that content in the future will not be a simple product for reception or reading, for production and reception. Content will expand to vitally include an interactive, customised service.
Peter A. Bruck Hannes Selhofer
Salzburg, August 1997
Page 3

The Content Challenge Techno-Z FH Research & Development
1 EXECUTIVE SUMMARY ........................................................................................................................... 6
2 INTRODUCTION ....................................................................................................................................... 14
3 PARADIGM SHIFTS IN THE MEDIA INDUSTRIES ........................................................................... 16
3.1
T HE CONTENT CHALLENGE .................................................................................................................. 19
3.2
T HE ECONOMIC AND DEMOCRATIC IMPORTANCE OF THE CONTENT INDUSTRY .................................... 22
3.2.1 Size of the content industry ............................................................................................... 22
3.2.2 The content industry and democracy ................................................................................ 25
4 PROBLEMS AND CURRENT ISSUES IN THE DIGITAL INTERACTIVE MEDIA MARKETS... 27
4.1
C HALLENGES OF MEDIA INTEGRATION ................................................................................................. 27
4.2
C USTOMISING AND PERSONALISING CONTENTS ................................................................................... 29
4.2.1 Customisation of content .................................................................................................. 29
4.2.2 Personalisation of content ................................................................................................ 31
4.3
E ND USER REQUIREMENTS : EASY TO USE INTERFACES , FAST ACCESS .................................................. 32
4.4
S OLUTIONS FOR HIGH LEVEL INTERACTIVITY ....................................................................................... 35
4.5
S OLUTIONS FOR TRANSACTION SYSTEMS AND ELECTRONIC COMMERCE ............................................. 37
5 THE VALUE CHAIN AND SKILLS MODEL OF THE INTERACTIVE DIGITAL SERVICES
INDUSTRY ..................................................................................................................................................... 40
5.1
V ALUE CHAIN ...................................................................................................................................... 40
5.2
C OMPETENCY MODEL OF THE INTERACTIVE SERVICES INDUSTRY ........................................................ 41
6 CHANGES IN USER BEHAVIOUR ......................................................................................................... 44
6.1
T HE CONVERGENCE OF LOOKING AND READING .................................................................................. 44
6.2
U SER BEHAVIOUR MODEL FOR MARKET SEGMENTATION ..................................................................... 45
7 BASIC STRUCTURE OF A MULTIMEDIA INFORMATION SYSTEM ........................................... 47
7.1
O VERALL TRENDS IN MULTIMEDIA TECHNOLOGY DEVELOPMENT ........................................................ 47
7.1.1 Decrease of hardware costs for the production of multimedia content ............................ 47
7.1.2 Carriers ............................................................................................................................ 48
7.1.3 Satellite communication ................................................................................................... 49
7.1.4 Overcoming the technological barrier ............................................................................. 50
7.2
D IFFERENCES IN PRODUCTION CYCLES WITH REGARD TO CONTENT ..................................................... 51
7.2.1 Component model ............................................................................................................. 52
7.2.2 Software development using multimedia data repositories .............................................. 53
Page 4

The Content Challenge Techno-Z FH Research & Development
Fig. 1: Synergy of Reports on Multimedia Content ____________________________________________ 14
Fig. 2: Media industry and content industry. _________________________________________________ 16
Fig. 3: Digital content at the core of the industry convergence ___________________________________ 17
Fig. 4: The Content Industry - a highly fragmented market ______________________________________ 21
Fig. 5: Democratic and economic impact of the content industry _________________________________ 22
Fig. 6: Value of the European Information, Communication and Content Industries (1996) _____________ 23
Fig. 7: European Media and Publishing Market Volume (1996) __________________________________ 23
Fig. 8: European ICT Market Volume (1996) _________________________________________________ 23
Fig. 9: Market for CD ROM based Videogame Consoles ________________________________________ 24
Fig. 10: Content Industry Requirements _____________________________________________________ 27
Fig. 11: Trends in service strategies: customisation and personalisation ("100,000 products for 100,000 people") ______________________________________________________________________________ 30
Fig. 12: Stages of technology development ___________________________________________________ 33
Fig. 13: Parallel development of end user technologies _________________________________________ 35
Fig. 14: Hybrid online/offline titles worldwide ________________________________________________ 35
Fig. 15: Electronic commerce software market _______________________________________________ 38
Fig. 16: Changes of the value chain in the converging industries _________________________________ 40
Fig. 17: The two layers chain of competencies in the content industry ______________________________ 41
Fig. 18: Industry structure concept for the interactive services industry ____________________________ 42
Fig. 19: "Information Engineering" in the content driven layer of the competency model ______________ 43
Fig. 20: Multimedia creation and the convergence of "reading" and "looking" ______________________ 44
Fig. 21: Basic types of user behaviour and their needs _________________________________________ 46
Fig. 22: Multimedia price drops ___________________________________________________________ 47
Fig. 23: Timeline of services development and required carrier capacity ___________________________ 48
Fig. 24: Component model _______________________________________________________________ 52
Fig. 25: Multimedia data repositories for software developing ___________________________________ 53
Page 5

The Content Challenge Techno-Z FH Research & Development
1.
1 P ARADIGM S HIFTS IN THE M EDIA I NDUSTRIES
Thesis 1
Content is the key driver and the most important asset in the new digital interactive services industry. "Content" expands to mean a targeted bundle of information, communication and transaction services.
The convergence of the computer and telecommunications industries changes the organisational paradigms of the media industries. Instead of separated industries, a new conglomerate emerges: The digital interactive services industry.
However, "content" - with regard to the "content industry" - gains a different meaning than in the traditional media industries. Strategies to create attractive content will build on traditional media content and skills and add communication and commerce facilities.
Content is being extended through the addition of programmable features. Media rich content thus means also self executing content. Content is further extended through various levels of interactivity. Finally, content has to include e-commerce features to become viable for the new industry.
These developments pose technical and organisational challenges as well as a challenge retain existing markets whilst exploiting new ones.
In addition, content providers have to think in terms of providing services rather than selling discrete products. For many traditional media companies, managing the transition from a product to a service oriented industry will be the major challenge of the next
3-5 years.
At the centre of the digital interactive media services industry lies the competence of companies to build communities of users.
They need to address the needs of highly specific groups by integrating content, communication and commerce services. This includes joining traditional contents with content-related advertising, information from other content providers and a wide range of new services, such as opportunities for customer interaction through chatlines, moderated and not moderated discussion forums, bill-boards and consultation, governmental services and online financial transactions.
Page 6

The Content Challenge Techno-Z FH Research & Development
P ARADIGM S HIFTS IN THE M EDIA I NDUSTRIES
Conclusion 1
The new skills of information engineering constitute core competencies to be developed in the future digital services industry. Their technical know-how is needed in content creation as well as in content delivery. However, technologists must be aware that they are enablers but not drivers of the market. The content industry will be a demand driven and not technology driven market.
The convergence of telecommunications and media industries and the resulting paradigm shift in the media industries has been enabled by the rapid development in the area of digital technologies.
The new emerging markets have now reached a stage, in which these technologies, whilst they remain the enablers, are no longer the main
drivers.
Case studies of success and failure show that markets for digital information and communication services tend to be more and more demand driven. User demand may be encouraged, but cannot be pushed. This is a lesson that is still to be learned by many players in this industry.
Information engineers move towards the centre of value generation of the new media industries. Their skills are core competencies in the converging digital media and telecommunications industry. They provide solutions for all sectors of the value chain. The know-how in information engineering is needed to create attractive (digitised) content, expand service functionalities, develop script for self executable content, improve interactive features and integrate them with e-commerce solutions.
Information engineering is also required for content dissemination and delivery over networks, and it is essential for information retrieval, i.e. for the design of user interfaces and search and navigation tools.
Page 7

The Content Challenge Techno-Z FH Research & Development
1.2 P ROBLEMS AND C URRENT I SSUES IN THE D IGITAL I NTERACTIVE M EDIA M ARKETS
Thesis 2
The new content industry needs satisfactory technical solutions in the areas of media integration, secure transaction systems, user friendly end-user devices / interfaces and faster network access at affordable prices.
Due to the economies of digital media production (high "first copy" costs, low marginal costs), companies have a strong interest in content published in multiple media by exploiting the opportunities of digital media.
Cross publishing, i.e. re-using and re-purposing content for distribution in various channels, becomes a strategic aim of corporate publishers as well as commercial content providers. This task demands comprehensive and systematic solution management on how to process different types of content with regard to the specific requirements of digitisation and publication.
Technical solutions to overcome impediments to electronic commerce are the second important area for information engineering within the next 3-5 years. The key will be to provide efficient and secure payment systems. However, "security" has for consumers not only a technological reference.
Content providers need to build up trust and develop close customer relationships. Only well-known and trusted brands will win the confidence of consumers and be successful in launching electronic commerce services. Content providers will also need to develop strategic co-operations with generic solution providers.
However, electronic commerce in the business to consumer market will not be a booming market within the next 2 years, since online penetration is still too low and security issues will need time to mature and become accepted by the consumer.
In the long run electronic publishing together with ecommerce will be a most important revenue source in the online market. The Internet will be the vehicle for commercially viable business applications but will continue to be congested in Europe.
Page 8

The Content Challenge Techno-Z FH Research & Development
P ROBLEMS AND C URRENT I SSUES IN THE D IGITAL I NTERACTIVE M EDIA M ARKETS
Conclusion 2
"Internet congestion" is a serious bottleneck for the development of commercially viable business applications. It will be a critical
success factor for all Internet based services to solve this problem.
Cross publishing demands comprehensive and systematic guidelines for efficient interface management. One focus of research must be to establish standards for the multiple use of content and to invest in software improvement and quality process enhancement.
As increasingly successful e-commerce solutions drive the online market, congestion is becoming a more and more critical impediment for on-line publishing services. The economic viability of the Internet as the dominant platform for interactive digital services is threatened. Even when considering the limitations of switching and packet routing technology, congestion results from a lack of standards and competitive pressure in the Internet Service Provider market. Some of the problems should be resolved in the US and portions of Europe in the nearer future (by 1998), but information engineers have to take into account congestion problems and rationalise traffic volume requirements.
Poor competitive conditions will continue to slow down
Internet infrastructure deployment in Europe. This is crucial, because the demand for Internet service (users doubling every 12-15 months, traffic doubling every five months) will likely to continue to outpace deployment of infrastructure as European players move slowly in the absence of new levels of competition from ISPs and new alternative telecommunications carriers.
New servers and customer service functions, as well as high speed Internet applications, will enable a next generation online services whose offerings will be fully integrated with the Internet platform.
Page 9

The Content Challenge Techno-Z FH Research & Development
1.3 T HE V ALUE C HAIN OF THE I NTERACTIVE D IGITAL S ERVICES I NDUSTRY
Thesis 3 the convergence of hitherto distinct and separate industries. This convergence will be stratified in the value chain and a content driven and a technology driven layer is emerging. Market leaders from these layers strongly compete with each other.
The interactive digital services industry develops through
"Content" is the most valuable and important part of the interactive digital services industry. The value added by content creation and processing will -- in most cases -- be more than 50% of the entire value chain including transport and end user equipment.
Content can therefore be considered the nucleus of the
Interactive Services Industry from which other commercial activities will grow.
Since content is the most valuable asset, competition in the content driven sectors of the value chain (content creation and aggregation activities) will increase.
The convergence of industries will be a stratified one and has to be understood in terms of convergence of infrastructure and content driven functionalities. Transport, delivery support and interface and systems management will integrate. On the other hand, content creation, packaging and market making will coalesce. These two layers will form the industrial base for new forms of concentration and competition.
Telecom carriers and software system suppliers move into the content organising business, content organisers move into the telecoms sector.
Thus, publishing companies enter the market as Internet access providers 1 in order to improve their customer ownership and to broaden the marketing base for their online services.
TV Cable operators, on the other hand, are diversifying into programming companies providing local and regional content in multiple media formats.
T
HE
V
ALUE
C
HAIN OF THE
I
NTERACTIVE
D
IGITAL
S
ERVICES
I
NDUSTRY
1 In Germany, the WAZ publishing group, one of the largest newspaper publishing companies, has started to provide access to their commercial online network. The "Rheinzeitung Online", (online service of the Mittelrhein-Verlag GmbH, the company publishing the "Rheinzeitung") offers
Internet access (E-Mail, access to the online newspaper, Web-Space of 2 MB) to Rheinzeitung subscribers for 5 ECU per month. In Austria, the publisher of the daily "Vorarlberger Nachrichten" has created a subsidiary ("teleport") specifically for the online market. "Teleport" is Internet access provider and content organiser at the same time.
Page 10

The Content Challenge Techno-Z FH Research & Development
Conclusion 3
Strategic co-operations and outsourcing are gaining importance in the content industries. As a consequence, "coopetition" is the new market rule for big and small players: companies will have to compete in some areas, while co-operating at the same time in others. While big player concentration attracts much attention, numerous small businesses with a clear focus on specific aspects of the creation process are emerging and proving successful.
The value chain of the interactive digital services industry creates a paradoxical situation.
On the one hand, the economies of digital technologies make it easier for all players to build new competencies. Content creators may develop into content deliverers, carriers think about entering the content creation sector.
On the other hand, it remains almost impossible for an individual player to control the whole value chain. Everybody needs partners.
As a consequence, strategic alliances are critical for success and the business landscape is changing rapidly and continuously.
New companies are emerging, focusing on narrow aspects of the value chain and offering their special services to other companies.
In this rapidly developing new market environment with alliances and co-operations changing everyday, companies must remain focused on their strategic objectives. The business model becomes more important than ever, i.e. the clear decision about which competencies to build in-house, and which competencies to outsource.
The game of playing around with alliances and co-operations is an opportunity for entrepreneurial activities, i.e. setting up small businesses and offering services to larger businesses, especially in the area of content creation and processing.
Page 11

The Content Challenge Techno-Z FH Research & Development
1.4 C HANGES IN U SER B EHAVIOUR
Thesis 4 traditional audience reception behaviour. It combines active and passive forms of use and implies a convergence of 'reading' and
'looking' activities. Multimedia services allow the user a combination of different reception modes in a hitherto unknown way.
New media user behaviour is significantly different from
Looking at new media from the side of users and their behaviour, multimedia has to be defined as a combination of hitherto separate and distinct forms. Multimedia requires greater audience involvement, combining point to point with group communication and mass reception. It allows interactivity in a scaleable way and offers an altogether new dimension of combining reading and looking activities. Services that put together text (reading) based information and image/video (looking) based information can create synergies that provide the user with the specific added value of
"multimedia".
Due to insufficient capacities of today's networks, online services can provide this added value currently only to a limited degree. Online multimedia is still in its infancy. Online services are still to a high degree reading oriented, which may explain why print media have been faster to develop new online services than electronic media companies.
Page 12

The Content Challenge Techno-Z FH Research & Development
C HANGES IN U SER B EHAVIOUR
Conclusion 4
New media creation requires a combination of "publishing" skills (traditional skills of print media) and "programming" skills
(skills of broadcasting companies). Motion is not just in pictures, but also in texts.
With regard to digital content engineering, new content requires the combination of the "publishing" skills of producing in pages and chapters (space media skills) and with "programming" skills of producing in clips, sequences and episodes (time media skills). Multimedia adds animated graphics, images and video the text-based content, whilst giving the user control over the sequence of information consumption. User guidance and navigation charting become critical content features. Multimedia thus transcends both print and TV, braking constraints on reading and looking. Hypertexts end linear reception processes. Improvement of compression technologies and the transmission rates for real video and audio transmission over narrow bandwidth networks are business critical.
Page 13

The Content Challenge Techno-Z FH Research & Development
The development of the content industry is rapid, braking century old boundaries between cultural and media sectors and irreversibly changing the bases for human knowledge and interchange. Internet and the emergence of a wide range of on-line applications impact on all sectors of society and the economy. No other sector will be transformed so profoundly and in such a short time as the media and cultural industries.
They provide the symbolic material for the new networks of communication and are thus the key drivers for a value added use of advanced communication technologies and services.
In October 1996, the EC addressed this and presented a study on the "Strategic
Developments of the European Publishing Industry towards the Year 2000".
2 In this report the new challenges facing the transforming publishing sector were addressed. The analysis of user behaviour and needs was linked to a strategic look at market developments and recommendations for business models were suggested.
This study serves as starting point for the present report and supplies the analytical framework for describing the overall developments of the electronic publishing market (technology, user behaviour, marketing strategies, regulatory issues, strategic roles of industries). Drawing from the overview provided earlier, this report specifies the results as far as they are of relevance for information engineering and future multimedia content R&D. Furthermore, an analytical grip for developing a multimedia information system will be provided.
Fig. 1: Synergy of
Reports on Multimedia
Content
Skills required from Media Engineers
"Specialist Knowledge":
Technological Skills
•software engineering
•system integration
•network architecture
"Generalist Knowledge":
Strategic Developments
•industry value chain
•strategic roles of players
•user requirements
EL PUB 2003 reports
The Content
Challenge key technologies for the digital interactive media
"executive briefing" on strategic issues
Source: Techno-Z FH R&D, 1997
2 Study by Andersen Consulting and IENM - Institute for Information Economy and New Media (a department of Techno-Z FH Research & Development) on behalf of the EC DG XIII/E, October
1996. See <http://www2.echo.lu/elpub2/en/infonote.html>.
Page 14

The Content Challenge Techno-Z FH Research & Development
In addition, attention should be paid to the study published at the end of 1995 by
Meta_Generics Ltd.
3 An update of this ELPUB 2001 report ("ELPUB 2003") is undertaken by Informed Sources parallel to effort presented here. Both research projects have been co-ordinated by the contractors in order to provide maximum synergy for the reader if used together.
The findings of this study primarily address media companies in general and those involved in content and information engineering specifically. The main target is to provide companies and their Information Engineers with a well structured "executive report", containing strategic analysis of the developments in the new media markets.
Furthermore, the report addresses technical managers and project managers of R&D projects in the area of digital media.
This study as well as the EL PUB 2001 study are part of the EC's "Information
Engineering" research. "Information Engineering" is one of 13 sectors and one of the 3
'horizontal sectors' in the EC's Telematics Applications Programme and has a total budget of around 37 MECU.
4
Telematics Applications projects aim at configuring and adapting existing and emerging technologies into useful, user-friendly and cost-effective applications. These are meant to encompass all systems and services that use different combinations of ICT, and their integration and validation in their respective user environments.
The programme initiative in "Information Engineering" aims to improve the content and value of electronic information by applying "Information Engineering" principles, particularly information management, to the production, distribution and retrieval areas of the information chain. Production covers the activity of information generation including authoring and corporate data generation. Distribution includes physical movement of the information and the manner of its storage. Retrieval includes user access to the information that he/she requires, its delivery, and the integration into his/her own information environment.
5
3 "Information Engineering" (ELPUB 2001). Identification of influential technologies, impact assessment and recommendations for actions. EC, DG XIII, November 1995
4 Telematics Applications is one of the Information and Communication Technologies (ICT) Specific
Programmes of the European Commission's 4th Framework Programme, 1994-1998.
5 see < http://www2.echo.lu/ie/en/objectene.html>
Page 15

The Content Challenge Techno-Z FH Research & Development
The current developments in electronic publishing are not merely incremental, but are causing a paradigm shift. This insight is not new, but it’s consequences are only now becoming clear in the economic and business terms. As early as in 1995, the ELPUB 2001 study forecast that the revolutionary impact of the changes would create new ways of doing business and reshape the information markets.
The convergence of telecommunications, broadcasting and computing technologies has indeed caused an increasingly competitive environment for those who are involved in these markets. Formerly separated markets and services are converging into one big market – the „content industry“.
Fig. 2: Media industry and content industry.
Media Industry
Until
1994/95 content production content packaging transport network operators enduser technologies hardware / software
Media Telecom Computer
Convergence
Now
Media
Telecommunications
Computer
"Content Industry"
Source: Techno-Z FH R&D, 1997 6
A key aspect of this convergence and the new business opportunities lies in the fact that content is becoming smarter, with programming entering into all steps of the publishing business process.
This is not surprising. It is the result of the end to end digitisation of the media communication process which has started to be implemented in the last three to four years in Europe. For the thirty years up to the mid 1990s, digitisation had effected only the production side of media industries, and here especially of publishing in the pre-press stages. Now, digitisation is impacting on the reception side, altering the transport channels, products and consumer behaviour in the industries.
Information engineering’s rise to new importance is the direct outcome of this digitisation of distribution and the repercussions it has on all steps on the production side.
6 In: Peter A. Bruck / Hannes Selhofer: Von der Medien- zur Inhalteindustrie. Der Multimediamarkt in Österreich. (forthcoming)
Page 16

The Content Challenge Techno-Z FH Research & Development
Definition:
"Information Engineering"
"Information Engineering" is defined here as the software enabled process of transforming any kind of information into products and services which people can actually use by means of new digital information technologies.
7 It applies objective, proven scientific principles and methods to creating, managing, disseminating and using information across all media types.
Due to the convergence of the computer and media industries, there is a close relationship and considerable overlap between the different engineering skills and the electronic media sectors.
For the purpose of this study, we regard "Information Engineering" as the skills that provide the tools to transform the "raw material" information into consumable products and service and the transformation process itself.
Whilst engineers are technological enablers of the development of the interactive digital media services, digital content is at the core of the industrial convergence.
Fig. 3: Digital content at the core of the industry convergence
Media digital content at the core of convergence content
Telecommunications
Computer
The paradigm shift that has occurred in the media and communication industries is not only a shift in terms of technical convergence. Although digitisation technologies are the "enabler", they are not necessarily the main drivers within the digital media markets.
The current market development shows, that the markets for digital information and communication services tend to be more and more demand driven. User demand can be encouraged, but not be pushed. This is a lesson that is still to be learned by many players in this industry. For years, it seemed that technological feasibility was considered to be sufficient to create demand. Industry executives have risked and lost billions of dollars on the assumption that making the mass audience more familiar with interactive electronics would automatically stimulate their demand for online services and products.
7 Definition based on the EC's own definition of "Information Engineering". See "Information
Engineering" Project Fact Sheet of the EC, DGXIII/E, October 1996. A more detailed definition says that "the objective of "Information Engineering" is to use existing systems and networks to develop information resource management methods and tools that provide improved opportunities for suppliers and users to exploit information, and that make information future-proof by protecting it from obsolescence through technological development"; see I'M Europe: General objectives of the
"Information Engineering" Sector <http://www2.echo.lu/ie/en/objectene.html>.
Page 17

The Content Challenge Techno-Z FH Research & Development
This assumption is a mistake. For instance, many trials with interactive TV and related services have not turned out be the type of service requested by users. TCI's test trials with an interactive TV system for about 300 customers in the Denver area, for instance, found that the average household would order one movie (at 3-4 US$) every two weeks. This is hardly enough to drive the network of the future. Industry obviously underestimated the mass audience. People are not willing to buy technology alone, they want content and that to affordable prices (Bruck / Selhofer, 1997).
In order to successfully exploit the market opportunities, the companies involved will therefore need new skills in producing high quality digital media content that meets exactly the requirement of users.
The paradigm shift for suppliers in the transition towards an online economy is from a product oriented to a service oriented view. Compared to the traditional media industries, the new information services are still only small businesses, and in many ways they are not operating in viable and profitable markets yet. Only when they succeed in offering a value added to the customer will the new markets become profitable.
Online services of newspaper publishers may illustrate this paradigm shift from
"product" to "service". In the traditional print markets, publishing companies produce one or several "newpapers" or "magazines" and deliver these to their customers.
These products define their business. In online electronic publishing, new concepts of readership communities, based on interests, needs and lifestyles, are emerging.
Audiences are defining themselves as members of a group of individuals with similar interests who can interact online. This trend id already seen in the explosion of niche and lifestyle print magazines.
But even more than in the print business, online service providers deliver a package of individual service offers rather than a mass product. These services fulfil the needs of such groups by integrating content, communication and commerce services. The new online media provide publishers with the opportunity to offer a whole range of entirely new services, such as
 opportunities for customer interaction through chat-lines
 moderated and unmoderated discussion forums
 interaction with the editors
 consultation services
 new advertising opportunities
 institutional and governmental services
 online financial transactions
All these services have the potential to provide the customer with an added value compared to any print product (without necessarily replacing the print product). To fulfil this task, media engineers are increasingly required to possess a generalist understanding of the information markets themselves, i.e. an understanding that goes far beyond the mere technological aspects of their business.
The profile of future professionals in the digital services industry will be a combination of specialist technical skills with generalist analytical knowledge of the
Page 18

The Content Challenge Techno-Z FH Research & Development overall market developments, including knowledge on strategic roles of industries as well as knowledge on user demand and behaviour.
As we move towards the Information Society, the European Commission has stressed the importance of the development of a strong content industry. It has launched a number of programmes to support and stimulate the content market, e.g. the INFO2000 programme.
8 A parallel R&D initiative is being considered in the context of the implementation of the Fifth Framework Programme.
Indeed, regarding how the "information highway" has developed over the past three years, there is much evidence that content (for definition see below) is the key asset in the new digital communication and information industries, while technology is the enabler, but powerless by itself without being combined with attractive services.
The entire industry has experienced an unforeseen shift from a push to a pull market, from a top-down to a bottom-up mechanism. Information services cannot be forced upon the proclaimed "user", neither in business markets, nor in consumer markets.
To a degree unexpected by most of the top level management, consumers are highly selective and critical with regard to what services they make use of and what price they are prepared to pay.
The important point is that the market development of ICT products and services has been a market driven development for the past 20 years, since the main driver was clearly the rapid technological innovation in the area of digitisation, i.e. the mass production of microchips (information technologies) and of networks (communication technologies).
However, a new stage has been reached in this development, and there are indications that consumer demand will determine the future development -- rather than technology --, as applications and content become more important.
The supply driven approach becomes increasingly less effective the more ICT developments move from the hardware side to the software and the content side. While in software the gains of innovation and performance are still considerable, the prices are not being reduced in the same way as in the hardware industries.
In the content area, the techno-economic logic of the ICT development (improving performance at constant prices) might not even apply. Contents are not innovated in the same manner, and the price-performance spiral is not at all on a downward spiral. As ICT development moves from being a mainly hardware driven phenomenon where the computer-communication technology occupies centre stages to a more content driven phenomenon where multimedia products take on importance, the hitherto used concepts and understandings of the customer, consumer and user seem less and less workable.
9
8 see < http://www2.echo.lu/info2000/>
9 for a detailed discussion of the shift from a supply to a demand driven market see Bruck/Selhofer
(1997)
Page 19

The Content Challenge Techno-Z FH Research & Development
Content is said to be the most important asset in the value chain of the interactive publishing industries. This holds true if some specifications are made in terms of what the concept of "content" is.
In particular, it is very important to understand the transition of the media industry from a product towards a service oriented industry, since this transformation determines the concept of "content" in the digital interactive services industry.
The term "content industry", which is becoming widely used, has rarely been defined in detail. Whilst in the traditional media industries "content" was usually media
content, i.e. information (such as newspaper reports, broadcasts, etc.) and entertainment programmes (such as features, movies, talk shows, etc.), in the digital media industries the term "content" has a broader reference.
Content, seen in terms of the new content industry, is more than the total of texts and images. Rather, content is programmed and an integrated (information / entertainment, etc.) service package for a certain target group. In addition to the media concept, it also comprises communication services (such as chat services, mailing lists etc.) and transaction services (such as online shopping services).
Definition:
Content
In the interactive digital services industry the term
"content" refers to a wide range of information, entertainment, communication and transaction services that combine smart texts, intelligent graphics/simulations, motion in images and texts and are made available to an identifiable user group. The distinction does not matter whether these services are created to be sold (commercial services) or if they are available for free of end-user charges
(e.g. corporate publishing and advertising).
The "content industry", however, is more than just the media industries who provide the basic content. It comprises all businesses that are part of the value chain, beginning from content creation and ending with the devices the customers need in order to access and use the final product or service.
10
This implies that, with varying degrees, the traditional media industries
(publishing and broadcasting companies, film industry) are involved in the content industry as well as independent digital studios, Internet access provider, telecom operators, cable TV network operators and hardware and software companies. From a technical viewpoint, the content industry comprises each of three areas - content production, network distribution and information retrieval.
10 The value chain of the content industry will be discussed in detail in chapter 5.
Page 20

The Content Challenge Techno-Z FH Research & Development
Definition:
Content Industry
The content industry comprises all businesses that aim at generating value by means of creating or delivering analogue or digitised texts, images, video and/or sound based services to an identifiable user group. This includes media companies and studios who focus on content creation as well as telcos, hardware and software suppliers and cable operators who deliver contents to end users or provide those devices the users need in order to access and use the delivered services.
The notion of a "content industry", however, is not without problems, since it is today definitely not a homogenous industry. It would probably be more correct to talk about the "content industries", since there are enormous differences between the various markets.
 different target user groups
 different types and purposes of "content"
 different media sectors
 cultural differences and linguistic biases
Fig. 4: The Content Industry - a highly fragmented market
Segmentation:
Type of Content
"The Content Industry" production distribution access
Segmentation:
Media Sectors
Information Services
Segmentation:
User Groups
Segmentation:
Language / Culture
Print publishers
Entertainment / Games
Broadcasters
Business Northern Europe
Corporate Publishing
Online Service Prov.
Consumer Southern Europe
Source: Techno-Z FH R&D, 1997
Each of these segmented markets within the content industry has different drivers and impediments, requires different measures and initiatives to encourage market development and is at a different stage or level of market maturity. Accordingly, the value chain differs.
Page 21

The Content Challenge Techno-Z FH Research & Development
The content industry can be regarded as an offspring of the converging telecommunications and media industries. Its development and growth have far reaching economic and democratic implications.
Fig. 5: Democratic and economic impact of the content industry
Virtual democracy
• New ways of interaction between citizens and government / admin.
• Better access to information
Democratic
Impact
Quality of content is key to success of knowledge based society
• Changes in learning
• Provide orientation and context ("knowledge") direct impact
indirect impact
Industry is growth market by itself
• Creation of new jobs
• Growth of GDP
• International competition
Economic
Impact
Influence on organisation of work in general
• Re-engineering processes
• Intranet
• Electronic commerce
Graphics: Techno-Z FH Research & Development (1997)
3.2.1
Size of the content industry
The economic importance of the content industry has considerably increased over the past 10 years. Firstly, the share of the content industry of the GDP increases. Secondly, the growth of this industry and the development of completely new media formats creates new jobs that are badly needed in times of high unemployment in other areas.
Market statistics have to consider that the content industry is a result of the converging telecommunications and media markets. Although revenues from telecommunication services such as telephone or mobile communications are certainly not part of the "content industry", for comparative purposes, these services have also been included in the following analyses.
The content industry, together with related industries (telecommunications, information technologies etc.), had a volume of about 460 billion ECU in 1996. 315 billion of these were generated by the European information and communication technology industries, including the telecommunications sector. The volume of the publishing and media industries was about 145 billion ECU. Among the traditional content providing industries, the TV & radio sector and the newspapers are still the biggest markets (35 and
32 billion ECU).
Page 22

The Content Challenge Techno-Z FH Research & Development
Fig. 6: Value of the European Information, Communication and Content Industries (1996)
Industry
Media and Publishing
Print Markets
Corporate Publishing
TV & Radio
Video & Cinema
CD & CD-ROM
ICT Markets
IT Hardware
Software
Office Equipment
Telecom Equipment
IT Services
Telecom Services
TOTAL
Components newspapers & magazines (sales and advertising revenues), books (sales) catalogues, directories, etc. subscriptions, fees, advertising revenues box office revenues (cinema), rental and sale
(video) sales computer hardware (PCs, servers, etc.) systems and applications copiers, scanners etc. public network and private network equipment
(switching, transmission, etc.) professional services, processing services, maintenance and support telephone, mobile, switched data, CaTV
Fig. 7: European Media and Publishing Market
Volume (1996)
Print
Audiovisual
CD and
CD-ROM
6%
Video & Cinema
7% 8
10
32 b ECU
77
Newspapers
22%
13
35
10
52
138
458
58
8
31
8
29
TV & Radio
24% 35 b ECU
21 Magazines
15%
Corporate
9%
13 24
Books
17%
Total Market (1996): 143 billion ECU
Estimate based on data by EC (EL PUB 2 Study), KPMG, DMMV
Fig. 8: European ICT
Page 23

The Content Challenge Techno-Z FH Research & Development
Market Volume (1996)
TC Services
43%
Services
138 b ECU
37
IT Services
12%
58
Hardware
18%
Infrastructure
29
8
31
Office Equipment
3%
Software
10%
15
HW Maintenance
5%
TC Equipment
9%
Total Market (1996): 315 billion ECU
Source: EITO (1997)
Fig. 9: Market for CD
ROM based Videogame
Consoles
4
3
6
5
2
1
0
10
9
8
7 million consoles sold (Europe)
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Source: Datamonitor
The market for videogames based on proprietary consoles has not been included in these statistics. They are a good another example of the booming interactive services industry and may throw light on the market opportunities for multimedia online services once advanced (broadband) network access will be available at lower cost.
Sales revenues for game consoles and software have considerably increased since mid 1996. Especially Sony, Nintendo and Sega are targeting the game markets with proprietary hardware and software systems. For users, consoles offer easier handling than CD-ROM based games for computers (quick installation, less instability of system).
Datamonitor estimates that in 1996 about 6 million consoles were sold in Europe. Sales will reach a peak in 1998 with over 9 million consoles. By the year 2000, about 20% of
European households will be equipped with a proprietary game console. Software for multimedia games will therefore become an important market within the next three years.
Page 24

The Content Challenge Techno-Z FH Research & Development
There is a lot of speculation about exactly how many "new jobs" exactly will be created in the wake of the growth of the content industry and about what its impact on employment will be over the next 5-10 years. Estimates forecast that about one million new multimedia-related jobs will be created in the fifteen EU Member States within the next ten years. Demand for content creators and developers is expected to show the highest growth rates (+95% by 2005).
11 Most of these jobs, however, will be provided by traditional media enterprises.
While there is broad agreement that the content industry will in fact contribute new jobs, it seems impossible to provide a simple and single figure on how many jobs this will be. This is due to the fact that there are two major difficulties in "accounting" these jobs:
 New jobs in the content industry are closely related to the use of new information and communication technologies (ICT) in businesses as well as in households. ICTs accelerate the shift from automation to "informatisation". So, it is hard to balance the creation of jobs against the evident destructive effects on employment, since both are caused by the same engineering tools. If the content industry is, on the one hand, regarded as one of the major new employment opportunities, providing knowledgeintensive jobs, it is in part "only" compensating for the destructive impact of the same engineering tools on jobs in other domains. Even within the content industry - especially in the traditional media industries - many jobs will disappear. However, it is clear that the business with electronic information will be one of the employment sectors with highest employment growth rates.
 The second difficulty in forecasting employment effects of the new ICT is that, in many job relations, "employment" in the information society will not be of the type it used to be in the industrial society. The clearly divided roles of "employer" and "employee" will gradually be eroded. The actual number of "jobs" in today's world (an employee working for one employer and receiving a regular wage for it) will certainly decrease.
Instead, new forms of work and employer-employee relationships will emerge. Many people with knowledge-intensive jobs will start their own "business" instead of being
"employed" by a company, even if only one or two larger companies are their
"customers" (employers?). Some of these people will prefer to remain self-employed because it is profitable for them, others will be forced to do so because they cannot find a (traditional) "job" in an increasingly competitive labour market. That being so, it is certainly difficult to compare the number of today's "jobs" to those new forms of working relations in the information society.
3.2.2
The content industry and democracy
In addition to its economic importance, the content industry also impacts on democratic principles and institutions. The transformation from an industrial towards a
11 cf. EL PUB 2 study (EC 1996)
Page 25

The Content Challenge Techno-Z FH Research & Development knowledge-based society results in new information exchange processes, i.e. the dissemination, structure and economy of information are undergoing fundamental changes. Access to information, the interaction between governments, administration and citizens and the whole area of education will be reshaped over the next five years.
With nearly unlimited resources of information for everybody, however, problems of information overload and disorientation are increasing. Information must not be confused with "knowledge" - if information is the raw material, then knowledge is the structured information that can be used within a specific context. Information can generate knowledge, if it is processed and networked and not only accumulated. It is the democracy challenge of the content industry to provide knowledge and not only
information. The overall statement of the EL PUB 2 study is that electronic publishing has the potential to be a 'pacesetter for quality' on the way to the Information Society.
In this context, digital interactive media play an important role in the creation and distribution of two kinds of services and products. Firstly, they can provide services and products with highly socially interactive offerings with multi-sensory appeal, which reduce the emotional impoverishment and "disconnectedness" widely felt. Secondly, they can support the professional with focused or customised data, information and knowledge. It is the publishers' and other content providers' challenge to provide these services, it is the challenge of "Media Engineers" to create the tools publishers need to do so.
Summary: Paradigm Shifts in the Media Industries
Paradigm Shifts in the Media & Communications Industries
Industrial Convergence
TC
Media
Computer
Content Convergence
Products: Commerce
Communication Information
Service Customisation
Mass products
Content Industry
Info
Commerce
Service
Communic.
Customisation
Community
Community
Community individuals
Page 26

The Content Challenge Techno-Z FH Research & Development
Whilst the content industry has been identified as an important market and an equally important industry sector in the future, its various markets are at different stages of maturity and facing different problems. Services and applications for business-tobusiness markets are reasonably well developed, whilst many services designed for the mass consumer markets are a long way from being fully developed. Service and content providers who have entered the market with much euphoria in 1995 or 1996 have, in the meantime, been brought back to earth with respect to what the business opportunities with the new interactive services are. Some of the current market impediments are at least partly technological ones. This chapter will provide an overview, from the publishing industry's perspective, of major issues and problems that require further R&D efforts.
Fig. 10: Content
Industry
Requirements
Challenges in Content Industries
Media integration
Reusability of content / cross publishing
Customisation of contents and services
End user requirements: interfaces etc.
High level interactivity
Transaction systems / data security
Fast access / database structures
Competency from
Information
Engineering needed technical solutions will enable / encourage veritable markets
The basic idea of multimedia, as defined by the name itself, is the combination of text, image, video and sound into one medium. The difference to traditional analogue
"multimedia" formats (e.g. TV) is that in the new media all components are combined and integrated in digitised form. This has important strategic consequences, both for the supply side as well as for the demand side.
 For content providers, digital media integration is a new opportunity but also a challenge. Costs for content creation (programming) for high-end multimedia titles are extremely high. As a consequence, companies that create digital
Page 27

The Content Challenge Techno-Z FH Research & Development content must try to re-use the same content as many times as possible and in as many media as possible without having to pay "first copy" costs again. This is the idea of cross publishing: Pay content creation once, re-use it for free.
 From the demand perspective, the question is "how much" multimedia features the users actually want. The demand for multimedia services in the consumer market has gained momentum, but certainly not yet reached the level that was hoped or expected by the industry. Obviously, technical impediments
(unfriendly end user devices, still limited plug-and-play with PC based CD-
ROMs etc.) and high cost for hardware and telecoms are strong arguments against purchase of multimedia services.
The diversification and digitisation of the media industries gives content providers more opportunities in their choice over which media to deliver their services.
Many companies have an interest in using the same content for several media, e.g. for a print catalogue and for a CD-ROM. To find solutions for a multiple and sustainable usage of digitised content is one of the challenges for technical engineers in the digital media age.
Definition:
Cross Publishing
Cross Publishing means using the same content for publication in several different media and guarantee reusability by exploiting the opportunities of digitisation and relating authoring tools. The strategic goal of cross publishing is to diversify content distribution channels at minimal marginal cost.
Cross publishing is a logical development, considering the economies of digital media production. While the first copy costs remain high (or may even be higher than in the analogue media industry), the costs for re-using content in other media formats than the original one has rapidly decreased.
As a consequence, many companies have an interest in having their content published in multiple media by exploiting the economies of digitisation. The question is learning which media to use for which type of product and service.
The boom in digital media has triggered a boom in software development for digital content processing (authoring systems). Professional media production software is a most important asset in the whole computer industry, probably having more impact on market success than hardware issues.
Also, professional skills in using these tools for content creation and processing are a key competence needed in order to generate added value with digital media.
R&D projects should be launched to optimise the re-usability of content for various formats. Currently, cross publishing concepts are facing problems with lacking standards. Outstanding issues include:
 to define success criteria for optimising the cost-usage benefit of cross publishing opportunities
Page 28

The Content Challenge Techno-Z FH Research & Development
 to focus on standards for document and file portability between different systems
This task demands comprehensive and systematic guidelines on how to process what sort of information with respect to specific requirements of digitisation and publication. These guidelines can be seen as a type of media technology landscape, providing recommendations on standards and formats.
Considering the value chain, there are two points where cross publishing demands strategic planning. The first one occurs when the basic content is transformed into digital formats. Decisions have to be made about which platforms and software to use (e.g. about the word processing software, what sort of database structure and software etc.) in order to optimise multiple usage. The second important step is the process of transforming digitised raw material into products and services. Again, the choice of appropriate tools and formats determines the economy of re-usage.
Organising content according to individual customer profiles ("target group of one") has moved into the spotlight. There is much debate on how much pre-organisation the user expects and how much active "work" he must invest into shaping and organising contents for his specific needs.
Definition:
Customisation and
Personalisation
A content provider's effort to adapt and specify interactive digital products and services for highly specific target markets is termed customisation. Thus, customisation is a supply side product strategy.
On the other hand, a user’s interactive modification of a service for his/her individual purposes is defined as
personalisation. Personalisation is a demand side activity.
Customisation and personalisation have considerable impact on product development in the content industry.
4.2.1
Customisation of content
In the online economy of the digital interactive service industry, new concepts of readership communities based on interests, needs and lifestyles are emerging. More than ever, audiences are defining themselves as members of a group of individuals with similar interests who can interact online. The trend towards individualised lifestyles, together with the desire for personal independence and mobility, have already changed the parameters of traditional print media design. Publishers previously reacted by publishing special interest magazines and newspaper sections.
Page 29

The Content Challenge Techno-Z FH Research & Development
As this trend towards personalisation continues, content providers are confronted with a further shift from formerly coherent markets to increasingly split market segments.
These market segments can only be served with highly targeted and tailor-made products and services. Otherwise, this growing sense of online community is frustrated by the inability to easily find related content, services, and other users. Community services fulfil the needs of such groups by integrating content, communication and commerce services. The new online media provide publishers with the opportunity to join their traditional content together with content-related advertising, information from other content providers and a whole range of entirely new services, such as
 opportunities for customer interaction through chat-lines
 moderated and unmoderated discussion forums
 free bill-boards
 consultation
 institutional and governmental services
 and online financial transactions.
Fig. 11: Trends in service strategies: customisation and personalisation ("100,000 products for
100,000 people")
Customisation
• adapt content for small target groups
• "target group of 1"
• special interest, special user behaviour
Supply Side
• new customers
• new publishing skills
Supply Side
- service providers
Product / Service output expected
Demand Side
- users
- advertisers
Personalisation
• filters and options for personal service design
• "personal newspaper"
• "information on demand"
User Market
• value added compared to traditional media
• trend towards individual life styles applied to media services
Advertising Market
• quality / narrow profile target groups for advertisers
• new media: best environment for
1:1 marketing
Graphics: Techno-Z FH Research & Development, 1997
A major driver of the customisation of content will be advertisers and marketers.
Online is not yet a mass medium and cannot compete with traditional media in reach.
The attractiveness of online services for advertisers is therefore the quality of the audience and not the quantity. The slogan is that, with every click they make, users manifest their identity - no identical click routes, no identical people. The trick for services providers is to reflect this, to gather detailed information on their users and to
Page 30

The Content Challenge Techno-Z FH Research & Development sell this information to advertisers, i.e. they present a more homogeneous audience to potential advertisers than traditional media.
The development of a 1 to 1 marketing has been the talk of marketers for years.
With its inherent feedback circle, the online medium could be the perfect environment for this approach. But the opportunities have hardly been exploited yet.
4.2.2
Personalisation of content
Whilst the service provider aims at customising his offerings, he may also consider offering the user interactive tools to modify his/her services for his specific purposes.
PointCast is an example of such a service that allows the user to determine what exactly he wants within a framework of content offered. Another example of a news service allowing personalisation is NewsPage Direct, an e-mail enhanced service launched in
February 1996 by the US company Individual Inc. .
NewsPage Direct is software that works like a news scanner, skimming articles, reports, editorials and all other sorts of news content on a daily basis. Articles are selected according to a personalised user profile the customer has generated by interactively selecting 10 topics of interest out of 2500 subject fields. Every morning, NewsPage Direct extracts the most relevant articles from the daily pool of 20,000 incoming stories and delivers the package to the user’s e-mail box. The customised news service runs on a proprietary network and is financed through subscriptions and advertising.
Although "personalisation" has been a key word in the discussion of interactive content for the past two years, there is some evidence to doubt the analytical idea behind that concept. At least, "personalisation" is not a value in all cases and by itself. It will certainly not be viable to improve low quality services or make them appear more attractive simply by giving the user an opportunity to "choose among the bad fruit".
It may even seem contradictory to expect from content providers to act as an information organiser in the vast amount of information available (i.e. provide targeted and pre-selected high quality content) and, at the same time, let the user actively generate his own service. The problem with this idea is that -- in general -- this is exactly the
"service" users expect from quality content providers; they are not interested in reshaping the content and services they get.
12
One way of viewing "personalisation" in the sense of selecting content is to focus on giving the user the opportunity to quickly navigate within the service and to make intelligent queries. Classified ads are a good example. Electronic classifieds are no value added service if they do not include special query tools. It should be possible to make a database query for real estate classified ads, for example, according to categories such as
<price>, <number of rooms>, <location> etc. This is the way how "personalisation" of
12 The concept of a "personal newspaper", for instance, has not turned out to be a successful service yet and will probably not be one within the near future. Users and readers have already made their choice by deciding for one newspaper or the other. They are not really interested in making further choices concerning content, since this does not promise added value. Rather, they expect the editors to filter the information for them, since this is actually the idea of a professional news service.
Page 31

The Content Challenge Techno-Z FH Research & Development service could be understood. The task in this example would be to provide the publisher with a tool that minimises the effort of entering classified in a database and - on the other hand - allows the user to make an online query according to his "personal" search criteria.
Successful electronic publishing requires widely distributed users. Before the flexibility of switched broadband is available, digital interactive services will utilise ISDN and digital broadcasting technology. The development and deployment of services and related technologies will occur in three corresponding waves in content development:
 Text and picture-oriented content with some interactivity but few value-adding services are the current form of electronic publishing.
 These will be slowly replaced and expanded upon by two types of content and services. One type of content will (continue to) be video-centric with limited or no interactivity. The other type of content will be more text, graphics and applicationcentric, and have dramatically wider variety. The two kinds of content will sometimes be integrated by a single end user device, but remain chiefly independent.
 Eventually, a fully integrated set of media, communication, and financial content and services will emerge.
Page 32

The Content Challenge Techno-Z FH Research & Development
Fig. 12: Stages of technology development
Infrastructure
– 14.4/28.8 Kbps modems
– 2-34 Mbps backbones
– DVB, DAB
– ISDN
– GSM (for data)
– I55 Mbps backbones
– ADSL/FTTC
– Cable modems/HFC
– Wireless Local Loop/MMDS
– DECT/DS-CDMA
– ATM backbones
Switched Broadband,
Wireless Wideband
Digital Broadcasting,
Switched Wideband,
Wireless Narrowband
Seamless media and communications services
Switched Narrowband
1990
Text-rich EP services
1995
Split in content between TV-centric, semi-interactive content and text-centric graphics-rich fully interactive content
2000 2005 2010
Web Browser introduced
Significant growth of home Multimedia
PCs and online services
Deployment of credit card transaction standards
New compression, Multimedia and streaming technologies enable a “Multimedia” Internet
Internet boxes for TV
Customer profiling and customization enable Market of One
Mass market interface and navigation
Portable phone/PDA based EP services
Copyright and rights management systems in place
Agent-driven electronic marketplace
Integrated authoring tools enable diffusion of high value added documents
Usage monitoring standards enable new levels of advertisement revenues
Hardware and Software
Source: Andersen Consulting (EC, 1996)
Present dial-up connections vial modem and telephone are usually made at 28.8
Kbit/s or 33 Kbit/s, a speed that makes transmission of media-rich applications nearly impossible and thus hinders its widespread diffusion. Cable modems are hoped to improve the situation for two reasons:
 The networks of cable operators (especially cable TV networks) offer large bandwidth, potentially enabling high speed connection to the Internet by using cable modems.
 Concerning pricing strategies, cable operators can operate with flat fees
(instead of "pay-per-hour" if access is by way of telephone lines) and usually do.
13 Users prefer flat fees for ongoing services, because costs are predictable.
A problem that cannot be solved by cable modems is the speed of the core
Internet. It does not help to provide high-speed access to households if this just moves the bottleneck into the core Internet. In fact, Internet congestion is becoming critical, and is threatening the Internet’s viability as the dominant platform for interactive services.
Though in part due to the limitations of switching and packet routing technology,
Internet congestion is driven by a lack of standards and competitive pressure in the ISP
13 The Austrian cable TV operator "Telekabel" (Vienna, 300,000 subscribers), for example, intends to offer Internet access via cable modem for a flat fee of about ECU 45 with no additional costs. The service will be available by fall 1997.
Page 33

The Content Challenge Techno-Z FH Research & Development market. Currently, there are incentives for ISPs to provide insufficient connections to other networks, build capacity slower than rivals, and generally attempt to supply more customers by free-riding on other ISPs’ capacity. Cable operators are therefore searching for ways to have the content at the head end, where it can be delivered to the user at very high speed. (cf. Databank Consulting, 1996)
Cable operators are considering providing access to the Internet as the major application for cable modems, since focus has clearly shifted from interactive TV to the development of high speed Internet-based services. These services with their need for downstream high capacity and small upstream capacity perfectly suit the asymmetrical nature of cable networks.
Considering the two bottlenecks in combining broadband services with interactivity on the one hand and narrowband services with multimedia features on the other hand, we forecast a parallel development in end user technologies until 2000. Only then, the platforms will start to converge. For the next years, the PC will remain primarily a "reading device" (see chapter 6 on User Behaviour) whereas the TV will be a "looking device" for media rich services, but with limited interactivity.
Page 34

The Content Challenge
Fig. 13: Parallel development of end user technologies
Techno-Z FH Research & Development
Source: Andersen Consulting (EC, 1996)
Considering the Internet congestion, hybrid online/offline services are an attractive alternative, since they offer the opportunity to combine fast performance
(offline) with continuous updates (online). The trick of hybrid titles is to "split" the service. Those parts that would require high transmission capacity if delivered online are on a CD-ROM, updates and more extensive text based information are added to the CD online. Infotech estimates that the number of hybrid titles in 1997 will be five times higher than in 1996.
1994 100
Fig. 14: Hybrid online/offline titles worldwide
1995
1996
311
720
3.500
1997
1998
1999
2000
8.000
15.000
27.000
5.000
10.000
15.000
20.000
25.000
30.000
Source: Infotech / multiMEDIA 9/96
Titles
Interactivity is probably the most important added value of the new digital media services compared to the traditional media and thus and a key factor for the success of new media services. It opens a direct gate to customers, and thus converts a formerly rather one-directional product into a two-directional service.
However, "interactivity" has -- unfortunately -- become a "buzz word", maybe even a "hype". It is important to be aware that interactivity does not create value for
Page 35

The Content Challenge Techno-Z FH Research & Development services by itself, but only can create value if used in an appropriate way, taking into consideration what sort of and how much interactivity users will expect and need.
14
This shift in customer relations refocuses business operations, starting with the organisational structure and moving to all issues concerning marketing and customer care. Regardless of the quality and innovative level of electronic Publishing products, comprehensive service will require user support, information and goods brokering, community creation, database management, credit card and order processing, and delivery services.
Interactivity allows service providers to directly integrate a whole set of additional services into a single product that formerly demanded separate distribution channels.
Utility, functionality and depth of service depend primarily on varying degrees of interactivity. Four levels of interactivity can be distinguished:

Reader Service: Electronic publishing products offer similar features and services to traditional products. Customers can only read posted information without any influence on content and functionality. Digital reader services are uni-directional and non-interactive. However, usage is monitored and the service evolves as a function of user experience.

Basic Interaction: Basic interactive features, for example e-mail addresses at the end of an article that enables the user to get in touch directly with editors or journalist, are the first level towards a fully interactive service.

Extended Interaction: (Non) moderated chat lines, user forums and discussion groups further extend the potential for interactivity between customers and publishers.
Selected ordering, transaction and personalised services may also be offered.

High Interaction: Users respond and contribute actively to content available on an online platform, and thus are responsible for the constant rejuvenation of content. A extensive range of services are offered, including sophisticated electronic commerce features, intelligent advertising and advanced personalised services.
Experience of electronic publishing pioneers shows that service providers tend to underestimate their customers’ willingness to respond. Many publishing companies fail to set up the infrastructure to back up and support incoming customer requests, and thus cannot respond adequately to audience feedback.
Interactive services generally demand high attention on the publisher’s side which currently often overstrains the personnel capability, especially that of smaller publishing houses. Also, interactive services are not financially viable on their own, as there is no business model for charging users for basic interactive services. Additionally, the interactive channel to customers can also backfire if users start posting their dissatisfaction with specific Web sites online.
14 See next chapter
Page 36

The Content Challenge Techno-Z FH Research & Development
Electronic commerce is currently a domain of the business-to-business markets. In the business-to-consumer area, electronic commerce has not reached the level yet that many experts were predicting a few years ago. Basically, there are two explanations why consumers hesitate to make use of online transaction opportunities.
 User resistance because of insufficient solutions concerning data security
 User resistance because service is not attractive enough
In the long run, however, online transactions are expected to become an integral part of many digital services, also in the consumer market. Firstly, electronic commerce services are considered to be an important part of online service packages for targeted user communities. Content providers will therefore seek to integrate transaction facilities into their service. It is the combination of content, community, communication and commerce that is said to be the best strategy for online services in the consumer market.
Definition:
Electronic Commerce
Electronic commerce is about doing business electronically and encompasses many diverse activities both in the business-to-business market and in the business-toconsumer market. Activities include electronic trading of goods and services, online delivery of digital content, electronic fund transfers, electronic share trading, commercial auctions, collaborative design and engineering, online sourcing, public procurement, direct consumer marketing, and after-sales service. It involves both products
(e.g. consumer goods) and services (e.g. information services, financial and legal services).
Secondly, electronic commerce is supposed to be a major revenue source for many online ventures in the future. Especially for those content providers who act as a platform for other content providers, offering to advertise (and sell) their products via the other provider's online platform. Online services from newspaper publishers are an example for such a platform. Firms use these pages as a platform for their own company and product presentation.
Publishers will therefore not only need secure transaction systems for the billing of their own services, but - probably more important - also generate revenues from commissions on online transactions hosted on their online platforms. These commissions are seen as becoming an important revenue source for Internet ventures of publishers.
Whereas in print media the publisher gets paid for offering space and audience to advertisers, in the case of online platforms, the publisher might get paid for managing the actual transactions.
However, this is rather a hope for the future than a reality of today. Online transactions have not become a viable market yet, security concerns are a major
Page 37

The Content Challenge Techno-Z FH Research & Development impediment. Numerous players are concerned with this issue and are actively looking for solutions. Commercial online services such as CompuServe are planning to develop billing systems, credit card companies are working on technical solutions as well.
Forrester estimates that the sales of electronic commerce software (< 50 mECU in
1996) will increase to more than 1,800 m ECU by the year 2000. It will be large enterprises
(> 1000 employees) will drive the market in the first phase. By the year 2000, medium sized enterprises will spend most on electronic commerce software.
Fig. 15: Electronic commerce software market m ECU 1,600
1,400
1,200
1,000
800
600
400
200
-
1996 1997 1998 1999 2000
20-99 empl.
100-999 empl.
> 1000 empl.
Source: Forrester Research / multiMEDIA 6/97
Electronic commerce covers mainly two types of activities: indirect electronic commerce - the electronic ordering of tangible goods, which still must be physically delivered using traditional channels such as postal services or commercial couriers; and direct electronic commerce - the online ordering, payment and delivery of intangible goods and services such as computer software, entertainment content, or information services on a global scale. Direct electronic commerce - which enables seamless, end-toend electronic transactions across geographical boundaries - exploits the full potential of global electronic markets.
15
Products that seem most suitable for online commerce in the consumer market are software and hardware, books, clothes and music CDs.
16 For Germany, Diebold (1996) estimates that the total volume of electronic commerce (value of products sold) was 415
MECU in 1996 (0.1% of total retail) and will increase to 5,000 MECU in 1998 (1,1% of total retail).
Europe's main competitors have already resolutely seized opportunities offered by electronic commerce - with the US building a substantial lead. However, Internet
15 cf.: A European Initiative in Electronic Commerce
<http://www.cordis.lu/esprit/src/ecomcom1.htm>
16 Diebold (1996): 60% of people who have engaged in online transactions have (among other things) ordered software products (45% hardware products, 20% books)
Page 38

The Content Challenge Techno-Z FH Research & Development commerce is catching up in a number of Member States. In this respect, Europe can marshal a number of specific strengths in the fields of technologies, content creation and linguistic and cultural diversity. The EC has stressed that the use of a single currency in the world's largest Single Market will represent a strong incentive for the take-up of electronic commerce in Europe, whereas conversely, electronic commerce can contribute to the acceptability of the Euro < http://www.cordis.lu/esprit/src/ecomcomx.htm>.
Thus there is an urgent need to engage in an early political debate with the aim of providing a stimulus to electronic commerce. Key areas to be considered are the development of secure technologies and payment systems.
Page 39

The Content Challenge Techno-Z FH Research & Development
If "content" is the most valuable and important part of the interactive digital services industry, this should be properly reflected in the value chain. Comparing the value chain of the converging industries with the value chain of the interactive services industry reveals that, indeed, the share of content creation and content packaging/organisation has increased.
In the traditional telecommunications industry, 80% of value are generated by the network and services operator and 20% by manufacturing equipment. It has been estimated that in traditional print markets (here: newspaper & magazine publishing), content creation and aggregation adds about 40% to the total value. In the new digital services industry, the value added by content creation and processing will -- in most cases
-- be more than 50%. Service integration, platform management and "byte transport" will each account for 10-15%, and end user technology about 10%.
Fig. 16: Changes of the value chain in the converging industries
Traditional Telecommunications Industry (Telephony) network and service operator
80 % equipment
20 %
Traditional Print Publishing Markets creation
10 % content packaging
30 % printing
40 % distribution
20 %
Online Services / Electronic Services 2000 content creator
> 20 % content organiser
> 30 % service operator
< 20 % network operator
< 20 % equipm.
< 10 % content delivery other
Sources: EC (1996), Jahrbuch Telekommunikation und Gesellschaft (1997), other
Content is the nucleus of the Interactive Services Industry from which other commercial activities will grow. This is an opportunity for established content providers such as publishing companies, simply because of economics of production, since most published content is already being created and manipulated digitally.
Publishers have thus a temporary advantage in providing services, due to the economics of their business and the current lack of expertise/ rights of competitors in content. Since electronic publishing plays a key role in the development of Interactive
Services, this advantage translates into a strategic advantage for a much broader set of opportunities. However, the key success factors in Interactive Services will be
Page 40

The Content Challenge Techno-Z FH Research & Development technological and service innovation, broad competencies, and pure force of will, not just ownership and expertise in content. This is the same rationale driving convergence for players from all industries. It describes the moves of players in the Content,
Communication, Computing, and Financial Services Industry into emerging related fields and beyond into each others’ core business.
To exploit the new opportunities of the interactive services industry's markets of tomorrow, it will require a much broader skill and competency set than that possessed by the current players. To occupy the strategic high ground, players will have to play new roles which will require combinations and extensions of current skill sets. They will be driven by market demand and by pressure from players entering the market from other industries.
The Interactive Services Industry structure concept distinguishes between 2 layers,
3 stages and 6 competency groups. On a high level of abstraction, activities can be clustered into more or less content-driven (content) or technology-enabled (infrastructure services) layers of activities that encompass the entire value chain from conception to marketplace. On a lower level of abstraction, these two layers - content and infrastructure services - are horizontally divided into three distinctive stages based on degree of value added to an end user.
Fig. 17: The two layers chain of competencies in the content industry
Content
Content
Creation
Content
Packaging
Market
Making
Infrastructure
Services
Transport
Delivery
Support
Interface and
Systems
Source: Andersen Consulting (EC, 1996)
This two by three matrix resolves into six distinctive groups of major activities, and proves to be abstract enough yet, sufficiently detailed, for a strategic analysis of electronic supply chain:
1.
Market making (e.g. programme development/ scheduling and full service delivery; competing content; customer care; directory services; cultivation of virtual, interestbased communities),
2.
Content packaging (e.g. digitisation of content; directing, editing, layout design; content-based software development),
Page 41

The Content Challenge Techno-Z FH Research & Development
3.
Content creation (basic contents such as texts, audiovisual content, pictures)
4.
Interface and server systems development (e.g. user equipment integration; graphical user interface and application development; navigation and authoring tools),
5.
Delivery support services (e.g. byte logistics; Internet access; server platform operations; payment-processing systems), and
6.
Pipes/airwaves business (e.g. byte transportation; plant operations; transmission and switching).
Fig. 18 gives some examples of the main value added activities, the output and players in each sector of the competency model.
Fig. 18: Industry structure concept for the interactive services industry
Vertically Related Stages of the Interactive Services Industry Supply Side
Content Creation
Main value added activities:
• Original content creation
Output (examples):

Text, audio, video, multimedia assets
Players (examples):

Artists, writers, photographers, actors, directors (e.g. Spielberg)

Movie/music/TV studios (e.g.
Disney’s Miramax)
Content Packaging
• Digitization of content
• Directing, editing, layout design
• Customization
• Content-based software development

TV channels (MTV, RTL), video/PC games (Sega), Web sites (www.wsj.com) and departments of proprietary online services (Finance on
America Online)

Publisher (Wall Street Journal), financial services (Intuit)
Market Making
• Program development, full service delivery, competing content
• Original programming
• Customer access mgmt.
• 7 da./24 h customer care: help desk, directory services, anytime and anywhere availability
• Cultivation of virtual, interestbased communities

Online services (AOL), Web sites
(home.netscape.com)

CATV operators (TCI), telecoms
(Minitel), SW manufacturers
(Microsoft)
Transport
Main value added activities:
• “Byte transportation”
• Transmission
• Switching
Output (examples):

Voice communications, data transport and distribution
Players (examples):

E.g. LDCs (AT&T), LECs (Bell
Atlantic), CATV MSOs (TWC)
Interface and Systems
• User equipment integration:
HW, SW, and connectivity
• User interface, navigation and application development
• Authoring tools

Microsoft's Windows GUI and
OS, Netscape Navigator browser, Lotus Notes

SW manufacturers (Microsoft,
Netscape, IBM)
Electronic
Market
Place Delivery Support
• “Byte logistics”
• Virtual private networks,
Internet access
• Server platform mgmt and operations
• Payment-process systems, Emoney/-cash

Local access points, guaranteed bandwidth, financial settlements

Network services (Uunet), systems integrators (EDS), credit card processors (First
Data)
Source: Schlueter, Christoph and Michael J. Shaw, 1996
Skills of are crucial in both layers of the competency model. In the content driven layer, it is especially the transition from content creation towards content packaging that requires new skills compared to the traditional media industries. From the perspective of
"content workers", these two sectors can be subdivided into three steps - collection of basics, content processing and service design.
1.
Collection of "basics" means the creation of the "raw material". In the process of building a house, that would be the bricks, the window glasses etc. Elements of this step are texts, pictures, data, video sequences and sounds.
2.
The second step in content engineering is the digital processing of the raw material, e.g. the creation of a ready to use database, the processing and digitisation of pictures and videos. In building a house, this step corresponds to the shell of the house, i.e. the process of building walls, roof etc.
3.
The final step in the content engineering process is the service design, i.e. the "make up", the aggregation and integration of several units. This includes the combination of
Page 42

The Content Challenge Techno-Z FH Research & Development various sources and the design of the user interface. This would be the plasterwork and the furnishings. For the prospective this step decides the "look and feel".
Fig. 19: "Information Engineering" in the content driven layer of the competency model
Vertikal in Bezug stehende Phasen der Industrie für interaktive Dienste
•
Collection of "Basics"
• data
• tables
• pictures
• texts
• video
• sound
Processing
• multimedia database
• catalogue functionalities
• editorial systems
• screen design
• picture processing
Focus:
Digitisation
Important interfaces for
Cross-Publishing strategies
Product / Service design
• CD-ROM
• Online
•WWW-pages
• Print media
•catalogues
•journals
•books
Focus:
Re-Usability
Print
CD-ROM
Current Problems:
• lack of standards (digital formats etc.)
• lack of interfaces between software tools
• need for specifications
Graphics: Techno-Z FH R&D, 1997
The focus of the transition from step 1 to step 2 is digitisation of content, choice of format and assurance of sustainability. The focus of the transition towards step 3 is reusability of digitised content and user-friendly interface design.
Page 43

The Content Challenge
Techno-Z FH Research & Development
In this section, the focus is on two issues concerning user demand and user behaviour with respect to the digital interactive services industry. The first issue deals with media reception and how the new services create new ways of interaction with media, the second part of this chapter suggests a model for segmenting user markets according to their needs and their preferred modes of media behaviour.
For interactive publishing products, it is of great importance whether their reception is based on a "reading" or "looking" behaviour. The difference between
"reading" and "looking" steams from the dominant behaviour of a user towards a visual medium. For example the behaviour of people leafing through a consumer magazine is very different to the information searching behaviour of a financial newspaper reader.
The first group prefers to randomly gaze through the magazine, "read" short pieces of text and then glance through the numerous pictures, looking for interesting "tit-bits".
Fig. 20: Multimedia creation and the convergence of "reading" and "looking"
Source: Techno-Z FH R&D / Andersen Consulting (EC, 1996)
On the other hand, the financial newspaper reader will "hunt" for targeted information, with a higher level of concentration and text-orientation, filling gaps in understanding of knowledge. Within print media, quality newspapers and text books are typical examples of "reading"-focused material, whereas glossy consumer magazines and
Page 44

The Content Challenge Techno-Z FH Research & Development catalogues are designed for "looking", with only a limited amount of text. Television viewing is mainly "looking"-oriented, although videotext or BTX have proved that the TV set has the potential to be a platform for "reading"-based services as well. By determining which elements dominate, media may be positioned on a "looking-reading" behaviour scale.
In the long run, once bottlenecks such as low bandwidth no longer exist, those services having the highest market potential will be those combining "looking" and
"reading" elements.
User behaviour can be defined as a combination of users' needs, attitudes and their preferred way of service reception. Needs and attitudes towards new information services vary greatly even within narrow demographic groups. It can be argued that the differentiation of rational and emotional needs should be a central concept in studying user behaviour in the area of new information services. From a supply view, it divides services in two categories, those that have been targeted to provide information and competitive advantage, and those that are rather expected to satisfy entertainment and curiosity needs.
With the term rational needs we mean that people use interactive services primarily in order to directly achieve an information and/or economic advantage. Users with rational needs are, to a large extent, business and academic users. Services are useful to them if they offer the best opportunity available to effectively retrieve the information needed.
While information is the core of rational needs, entertainment is the core of
emotional needs. Interactive services that appeal to emotions aim at satisfying needs such as curiosity (trying things out, browsing Web pages), playfulness, adventure (exploring the online world), voyeurism (the opportunity to anonymously participate and watch, e.g. "listening-in" to newsgroups) and community feelings (chat-lines, "club-atmosphere" of online-services, etc.)
In addition to the distinction between rational and emotional needs, there is a second dimension that is crucial for the purpose of studying user behaviour – the dimension of "active" versus "passive" use of new media and information services. There are two basic approaches to media. Users may either actively search for content or
passively consume it.
With active usage behaviour a user is willing to spend time actively browsing and searching, enjoying a high degree of interactivity and involvement. Good examples of such a behaviour are "Internet surfing" or targeted information search in electronic databases. Active information searching is primarily associated with "pull" media, which contain a wide array of information but are loosely indexed or linked.
Passive content reception, on the other hand, means that the user is not willing to actively interact with the medium, but prefers content to be presented to him in a pre-
Page 45

The Content Challenge Techno-Z FH Research & Development organised and packaged form. An example of this type of usage is the average TVviewing behaviour, where user interaction with content tends to be restricted to "channel hopping" during commercial breaks. The notion of the "couch potato" is a well-known metaphor for passive media usage. Passive reception is the primary usage behaviour when format rich and mostly entertainment-centric media are consumed. Passive usage, however, is not restricted to entertainment and recreational needs. Executives and other time constrained persons may also need passive content in the form of targeted, prepackaged information.
Each of these four segments characterise a basic user behaviour type: "Knowledge
Workers" (active, rational), "Time Constrained Users" (passive, rational), "PC Enthusiasts"
(active, emotional) and "Leisure Seekers" (passive, emotional). It is important to understand that these categories are not mutually exclusive clusters in terms of individual people. Individuals may switch roles: A university academic, e.g., is a
Knowledge Worker when doing his research work, but may also be a Leisure Seeker in his spare time.
Fig. 21: Basic types of user behaviour and their needs
Knowledge
Workers
"Professional
Knowledge Seekers"
Attractors
• structured information
• comprehensive index
• automatic search tools
Users
• academics, researchers
• marketing analysts
Price Sensitivity
• low, but limited advertising
Active
"Bowsing out of Curiosity"
Attractors
• global content sources
• international chat groups
Users
• technophiles, early adopters
• students
Price Sensitivity
• high
• advertising accepted
"PC-
Enthusiasts"
Rational
"Fast Comprehension" "Awakening Couch Potatoes"
Emotional
Attractors
• high value added info
• packaged, personalised
• fast overview, drill down
Users
• executives
• managers
• medical, law
Price Sensitivity
• low
• limited advertising
Attractors
• image and video rich content
• pre-programmed
Users
• average TV consumer
Price Sensitivity
• medium / high
• advertising accepted
"Time
Constrained"
"Leisure
Seekers"
Passiv
Source: Andersen Consulting, Techno-Z FH Research & Development
These four sectors constitute major market segments for the digital interactive services industry from a demand side perspective. It is important to consider the user motives and the preferred way to interact with media according to the target audience.
The above model can be helpful.
Page 46

The Content Challenge Techno-Z FH Research & Development
Audio, video, 3D-Chat, agents, etc. - there is much singing and dancing around multimedia production technologies and Internet site construction. However, technology is more and more reduced to its appropriate role: How can it be used to better serve the client? This chapter provides a survey of the current state-of-the-art of multimedia information systems. Typical demands imposed by industry on multimedia information systems are also discussed. Complementary to Chapter 4, which develops a task-list from a publisher's point of view, this chapter looks at multimedia information systems from an media engineer's perspective.
In the first part, technological limitations of today's computer hardware and software development process will be analysed. The second part will highlight recent industrial and academic trends and describe the changes which the production and use of multimedia content has undergone over the past few years.
7.1.1
Decrease of hardware costs for the production of multimedia content
In the early 90s, the high costs of computing hardware capable of running multimedia applications constituted a serious problem for small and medium-sized enterprises (SMEs). Multimedia applications tend to demand high-performance computers which feature a decent graphics board, fast audio and video channels and a powerful I/O channel to access external media. Typically, this type of hardware could be found in multimedia studios, but was a too expensive for SMEs.
$10,000
Fig. 22: Multimedia price drops
Complete
Multimedia
Systems
$1,000
Multimedia
Kits
$100
Sound
Boards
$10
1994 1995 1996 1997 1998
Source: Price Waterhouse
However, the price-to-performance ratio has drastically changed in recent years.
Today, low-end computers already boast multimedia capabilities (e.g. sound cards, graphics accelerators, cameras, microphones, speakers, etc.). Computers equipped with
Page 47

The Content Challenge Techno-Z FH Research & Development special-purpose multimedia hardware have become affordable for both SMEs and private customers.
7.1.2
Carriers
Offline multimedia carriers (such as CD-ROMs) are not the only form of multimedia applications that have become popular in recent years. An increasing amount of graphics can be found on the Internet, and audio- and video-clips are becoming more and more popular.
In the late 1980s and early 1990s, the average Internet user and WWW surfer was anything but happy when coming across content that contained several images. Texts that were enriched by graphics could only be downloaded with a considerable delay caused by the processing of the images. Under adverse conditions, the burden placed by the processing of large images on the host computer could even bring it to a grinding halt.
Fig. 23: Timeline of services development and required carrier capacity average bandwidth available to households
1 Mbs full interactive
Broadband
VoD
100 kbs
Real Video
10 kbs
Real Audio
WWW
Basic Internet Services
1 kbs
500 bs textbased
Internet
1990 1995 2000 2003
Graphics: Techno-Z FH Research & Development, 1997
Today's computers offer enough processing power, main memory, and graphics capabilities in order to display elaborate graphics in real time. However, sufficient network bandwidth for transporting large files between computers in quasi real time remains a truly scarce commodity. Transfer rates of 20 to 100 kBps (kilo Byte per second) are not even close to being sufficient for the user's unlimited visual enjoyment of advanced and visually elaborate WWW pages and similar multimedia applications.
Typically, European network carriers provide transfer rates ranging from 2 to 45 Mbps
(Mega bit per second) of data. Interestingly, the transfer rates usually decreasing from
Page 48

The Content Challenge Techno-Z FH Research & Development north to south. The Austrian connection to the Aconet, for instance, has a capacity of 2 to
10 Mbps, which is standard for Middle Europe.
Experiences show, that 150 kBps are necessary to transmit videos with MPEG1 standard. This standard stands for a resolution of 352x288 pixel and 25 frames per second.
An extension of MPEG1 17 makes the combination of video and audio data for transmitting data for video conferences possible. In those conferences audio-transmission in real time has a higher priority than perfect video-transmission. Therefore software could be configured in a way that 10 instead of 25 frames per second are transmitted. The remaining bandwidth is used for audio data transmission. Therefore the transmission of language in a video conference remains understandable.
From a software-technical view, some improvements are possible. For example, there is the possibility of delaying the starting point for displaying videos when they are transmitted. Normally, streaming videos are displayed while transmission. In the meantime the data is written into a buffer. This data is read during the display of the video. Consequently transmission delays can be compensated.
To transmit deltaframes is another possibility of enhancing video quality. This means that only differences between two frames are transmitted (compare MPEG1).
Thus, less during a video conference less data has to be transmitted.
The Mbone, a virtual network laid over existing connections, is part of the
Internet. It is a Multicast-backBone, which offers point-to-multi-point connections over
IP. This helps to reduce traffic when used for video-conferencing and other multipoint stuff. Instead of broadcasting (traffic goes to every node, even to those which to not want this) and multiple unicasting (linear traffic increases with an increasing number of participants), multicasting gives you the possibility to send packets just once, and the network delivers them to every member of a multicast group.
Multicast-enabled video-conferencing tools for video-, audio- and shared whiteboard-collaboration can be found on the Internet free of charge.
The Mbone is used for public video-broadcasting, which are announced by a tool called sdr (session directory). Everyone connected to the Mbone can use sdr to look up currently running (or future) public sessions and even join them. The Mbone is currently limited to 500 kbps, which are shared between all concurrent sessions.
7.1.3
Satellite communication
For transmission of real time data a guaranteed bandwidth is necessary. This feature is offered by satellite communication. Being able to broadcast information over a wide geographical area is another advantage using provided satellite technology.
17 MPEG1 is short for Moving Pictures Expert Group, a company developing compression standards for moving pictures.
Page 49

The Content Challenge Techno-Z FH Research & Development
Eutelsat 18 , a satellite provider, launches satellites into orbit. Each satellite transmits signals in preassigned frequencies (e.g. satellites for analogue and digital television in a range from 10.7 to 12.7 GHz). Each satellite covers a subset of this frequency-range. A single administration unit of a satellite, a transponder, normally has a bandwidth about
32 MHz. These transponders - one satellite comprises about 20 of them - are rented by customers.
For data transmission there is another possibility of using only a part of a transponder. Depending on coding approaches it is possible to transmit about 32 Mbps
(one bit for one hertz) 19 . The kind of coding depends on various factors as sending- or receiving- quality, weather, satellite dish size and sending- and receiving power.
Up to now satellites were mainly used for analogue television and radio. With the development of digital television this is mixed with data transmission via satellite. In general there are two ways of services:
 unidirectional services
 bidirectional services
To receive data via satellite the customer needs a standard satellite dish (e.g. 60 or
80 cm) and a plug-in card for the PC. This card gets directly connected to the satellite dish. It costs about 750 ECU. The customer has to adjust the satellite dish (evelation, azimuth).
Bidirectional transmission is highly expensive. The installation of an uplink is necessary, as well as renting a transponder from a satellite provider. The latter costs can be thought in relative terms, when the information is forwarded to many users. A downstream path is shared by all users, so a single satellite channel (transponder) can transmit about 32 Mbps, thus providing the equivalent of more than a thousand modem connections at 28,800 Kbps.
Measurements of typical WWW sessions show a ration of about 1:8 to 1:15 between outgoing and incoming data streams for text and graphical content. With video this ration even grows. Therefore a modem link should be sufficient as a return channel for a private user.
7.1.4
Overcoming the technological barrier
For using technologies, time and location are not dominating anymore. Hardware components are handy and sophisticated enough that they can be used anywhere
(compare Internet access in hotel rooms via laptop or handy, reading e-mail via Internet-
Pager). Further, technologies are integrated into our daily life. Kids grow up with these new technologies and take it as granted to use them. Adults cannot deny the pressure of
18 Other Satellite providers are Astra and Intelsat in the USA
19 Diffenence between bits and baud.
Page 50

The Content Challenge Techno-Z FH Research & Development the market and are forced to work with them. This variety of technological dimensions and an increasing demand for them cause further developments innovations in that field.
For quite a few years we are now being flooded by. We spend too much time looking for information on the Internet. Information is often available, but badly structured. Other times we end up at Web sites which are promising a lot, only to be disappointed.
The purpose of this section is to show a possible solution where Information
Engineers make complex information available in a structured way. This should lead to better information for users and allowing them to find what they are looking for more easily. It should also allow the Information Engineer to reduce the maintenance effort by using well defined processes and structures.
An approach to efficient software development is regarding a software system as a set of components. The goal is to develop technologies so that these components can be plugged in into predefined structured frameworks for software systems.
For administrating (structured insertion, efficient search and adaptations) these artefacts a component repository has to be developed. The concepts therefore are the same as in software reuse research. A central component repository should be installed and made accessible throughout a whole enterprise or the whole internet.
Repositories are filled with multimedia data. Digitising tools (like scanner, frame grabbers etc.) serve for the purpose to store the video and audio data in a digitised form with appropriate data format (JPEG, MPEG, AVI).
While developing multimedia content for cross-publishing one can revert to the repository. It is necessary, that the repository is structured (comp. component model) so that information can easily be found and reprocessed for different purposes. Besides the appropriate data format, the development of tools which support the administration of multimedia content, is necessary. These tools support a systematic development process, but cannot compensate the necessity of software engineering knowledge. Content of these repositories can be reused as-is, or can be combined with other components of the repository or with new ones and combined to new, more complex components.
The goal of software reuse is to enhance software quality and productivity. On a higher level of abstraction these concepts can not only be applied to software development, but also to the general production of multimedia content (crosspublishing).
For the administration of software repositories we are concerned by the following questions:
How can a publisher/software developer get an overview what content is stored in the repository?
Page 51

The Content Challenge Techno-Z FH Research & Development
How should components be specified so that the publisher/software developer can decide whether a single component is appropriate or not.
What should be done if components do not exactly fulfil needed purposes?
7.2.1
Component model
Fig. 24: Component model
Interface /Body
Consists of
Component
Administrativ
Information
Classification
Information
Component
Qualification
Information
Documentation
Refers to
Test Support
The success of searching components (data, video, audio) in the content repository depends on the classification of the components. The matching process between given and needed component depends on the classification information.
Components can be classified using
 free text
 keywords and terms
 facets.
Using free text, every entry of the repository is described by a few words or sentences without any rules. For efficient search for multimedia content in the repository a fixed vocabulary should be used to classify the components (keywords and terms). The use of facets means to develop various dimensions with keywords.
Components Qualification Information provides information about the quality of a component. In this section the developer should store critical comments or problems about reusing this component.
Administrative information should give an overview about the person who stored the component, when it was inserted into the repository, paying conditions, and so on.
Page 52

The Content Challenge Techno-Z FH Research & Development
 In the documentation part further comments can be stored. This information should help to decide whether or not it is useful to (re)use a single component. In general, standards should be developed how to document pieces of the repository.
 The "consists-of" relationship whether a component is a subcomponent of another component or has subcomponents itself.
 The "refers-to" relationship leads to components that could provide additional information to the component looked for (compare a hyperlink in the WWW).
Referring to multimedia content, not only to software code components, interface
and body or test data are not important. They provide information about possible combination of components and how single code-parts can be tested.
7.2.2
Software development using multimedia data repositories
Regarding the concepts of the component model, described above, software development or multimedia content production with the (re)use of existing data can be done as follows: the developer / publisher will look for components with specific functionality in the internet using appropriate search machines. The functionality of the needed components is an output of the requirements engineering and specification process.
Fig. 25: Multimedia data repositories for software developing
Components
Architecture Model Input of Multimedia Content
Component
Search Tools
Component Model
Administration Tools
Techno-Z FH Research & Development, 1997
The development of the object-oriented programming language java, which also supports multimedia data types, is an important step towards development of software systems where only new parts are developed from scratch. All other parts should be taken out of a given repository, where only high quality components are stored.
Interpreting Java source code, an platform independent byte code is created. This is promoted with the slogan „Write once, run anywhere“.
It should be possible that Java Beans, that is how the platform independent components are called, can be found looking at the information provided by the component model.
Page 53

The Content Challenge Techno-Z FH Research & Development
ACTS 97. Project Summaries. Annual technical report.
ACTS - The Way Forward. Advanced Communication, Economic Growth and Social
Development in Europe. European Commission, DG XIII/B
Blunden, Brian / Blunden, Margot (Ed.) (1996): Advertising in a multimedia age.
Bruxelles: IEPRC/Pira International.
Bruck, Peter A. / Selhofer, Hannes (1997): Österreichs Content Industry.
Bestandsaufnahme und Marktstrategien. Wien: Buchkultur
Bruck, Peter A. / Selhofer, Hannes (1997a): The Ignored User. Critical Factors
Determining User Demand for New Information Services. Proceedings to the
ENCIP European Communication Policy Research Conference 1997 (Venice, 23-
25 March 1997). Published in: "Communications & Strategies", Issue 26, 2 nd quarter 1997. p. 277-302
Burgelmann, Jean-Claude / Verhoest, Pascale (1996): Trans-European Information
Networks: Rhetoric and Practice. In: Telematics and Informatics, Vo. 13, No. 2/3,
Spring/Summer 1996. p. 67-80
Colombo, Massimo / Dang Nguyen, Godefroy / Perucci, Antonio (1997): Multimedia,
Paradigmatic Shift and Distinctive Competencies of Firms: an Empirical
Analysis. In: "Communications & Strategies", Issue 26, 2 nd quarter 1997. p. 207-
254
Databank Consulting (1996): Review of Developments in Advanced Communication
Markets. FAIR Report Series N. 1. (Oct. 1996)
Diebold Deutschland Gmbh / Telemedia GmbH (1996): Business Digital
Dumort, Alain / Dryden, John (1997): The Economics of the Information Society. Brüssel:
Office for Official Publications of the European Communities.
EC, DG XIII (1995): EL PUB 2001. Identification of influential technologies, impact assessment and recommendations for action. Report by Meta_Generics Ltd.,
November 1995.
EC, DG XIII/E (1996): Strategic Developments for the European Publishing Industry towards the Year 2000. Report by Andersen Consulting and IENM / Techno-Z
FH F&E. September 1996
Page 54

The Content Challenge Techno-Z FH Research & Development
EC, DG XIII/E (1996a): The Markets for Electronic Information Services in the European
Economic Area. Supply, Demand and Information. IMO, October 1996.
EC (1997): Building the European Information Society for Us All. Final Policy Report of the High Level Group of Experts. April 1997.
EITO (European Information Technology Observatory) (1997): Annual Report.
The Emerging Digital Economy II. A Market-Entry Strategy Analysis for Media and
Technology Ventures. KPMG (1997).
Feifer, Richard / Tazbaz, Denise (1997): Interface Design Principles for Interactive
Multimedia. In: Telematics and Informatics, Vo. 14, No. 1, February 1997. p. 51-
66
Fontaine, Gilles (1997): Subscriber Control. What Impact on the European Electronic
Communications Industry. In: "Communications & Strategies", Issue 26, 2 nd quarter 1997. p. 255-274
Fuchs, Gerhard: Interactive Television - a Shattered Dream? In: "Communications &
Strategies", Issue 26, 2 nd quarter 1997. p. 303-333
The Future of the European Media Industry. Financial Times Management Report (1996).
Grauer, Manfred / Merten, Udo (1997): Multimedia. Entwurf, Entwicklung und Einsatz in betrieblichen Informationssystemen. Berlin/Heidelberg/New York: Springer
Verlag.
Jahrbuch Telekommunikation und Gesellschaft 1997: Die Ware Information - Auf dem
Weg zu einer Informationsökonomie. Ed. by Kubicek, Herbert et al. Heidelberg:
R. v. Decker Verlag
Latzer, Michael (1997): Mediamatik - die Konvergenz von Telekommunikation, Computer und Rundfunk. Opladen: Westdeutscher Verlag.
OECD (1996): Science, Technology and Industry Outlook.
Pierre, Samuel / Safa, Haidar (1996): Models for Storing and Presenting Multimedia
Documents. In: Telematics and Informatics, Vo. 13, No. 4, Fall 1996. p. 233-250
Rheingold, Howard (1993): The Virtual Community. Homesteading on the Electronic
Frontier. Addison-Wesely Publishing Company.
Riefler, Katja (1996): Zeitungen online - Chance oder Risiko? Onlineaktivitäten der
Zeitungsverleger. In: Media Perspektiven 10/96, 537-549
Page 55

The Content Challenge Techno-Z FH Research & Development
Rojo, Alejandra / Ragsdale, Ronald G. (1997): Participation in Electronic Forums:
Implications for the Design and Implementation of Collaborative Distributed
Multimedia. In: Telematics and Informatics, Vo. 14, No. 1, February 1997. p. 83-
96
Vogel, Andreas (1996): Fachverlage: Behutsame Schritte zum Electronic Publishing.
Multimediaaktivitäten von Fachbuch- und Fachzeitschriftenverlagen. In: Media
Perspektiven 10/96, 526-536
Zimmer, Jochen (1996): Pay TV: Durchbruch im digitalen Fernsehen? Bezahlfernsehen in
Deutschland und im internationalen Vergleich. In: Media Perspektiven 7/96,
386-401
Page 56