Information Policy

OhmyNews appeals to readers for cash

The founder of the South Korean citizen journalism site, OhmyNews, has appealed to readers for financial contributions to keep the business afloat in the global economic downturn. In an open letter published on the OhmyNews site Wednesday, Oh Yeon-ho disclosed that the site lost KRW 50,000,000 (EUR 28,209) this year amid fears of heavier losses as advertisers keep slashing their marketing budgets. "For a news media to remain healthy, it will have to earn at least 50 percent of its income from the sales of content or paid subscriptions. Despite our best effort, OhmyNews still relies on advertisers for more than 70 percent of its revenue," Oh said. He added that if 100,000 readers joined the venture contributing KRW 10,000 a month, OhmyNews would be able to survive without relying on advertising revenues. Founded in 2000, OhmyNews proclaimed a new model of journalism with the motto "every citizen is a reporter". Most of the content for OhmyNews comes from ordinary citizens and only about a third comes from the 55-person staff.

http://www.ejc.net/media_news/ohmynews_appeals_to_readers_for_cash/

Forging Partnerships for Advancing Policy Objectives for the Internet

The OECD’s Information and Communication Policy Committee (ICCP) Committee, in its draft outline for the study: “A Focus on Internet Intermediaries,” as part of its work on Forging Partnerships for Advancing Policy Objectives for the Internet Economy, describes the scope of its investigation as being the role of information intermediaries “in achieving economic and social policy objectives for the Internet economy”.

The Civil Society Information Society Advisory Council (CSISAC) is grateful for the opportunity to comment on this draft outline and commends the decision to supplement the OECD’s substantial work on the knowledge economy with special attention to the public benefits of Internet Intermediaries for the Information Society embodied in this project. We offer these comments on proposed areas of specific focus in this research program and make suggestions for further relevant resources with the aim of supporting the public interest emphasis of the report. We welcome further exchanges on the ICCP’s work as outlined in the Principles for the Participation of Non-governmental Stakeholders in the Work of the ICCP Committee and its Working Parties.

The future growth of the Internet and its ability to reach its full potential in the economic, cultural and social spheres depends on OECD countries adopting legal regimes and regulatory frameworks that provide appropriate incentives for investment in the development of Internet technologies and widespread broadband infrastructure deployment, while safeguarding the rights of citizens. We believe that appropriately tailored frameworks for limitations on liability of Internet intermediaries are the key driver of Internet innovation and the freedom and autonomy of individuals in the Information Society.

As CSISAC stated in the Seoul Declaration, OECD Member countries should “maintain a balanced framework for intellectual property protection that is least intrusive to personal privacy, least restrictive for the development of new technologies, and that promotes creativity, innovation, and learning.”

http://csisac.org/2009/07/04/OECD_Intermediary_070109.pdf

Confronting the Crisis: Its impact on the ICT industry

The report, Confronting the Crisis: Its Impact on the ICT Industry considers how the industry can position itself for recovery in the future.

Confronting the Crisis: Its Impact on the ICT Industry draws on analysis from leading industry experts and international institutions. As the established order is overturned, it says, convergence in the ICT industry will accelerate, with the emergence of new players with new business models. Firms' ability to weather the economic storm will depend on their ability to invest for the future and explore new opportunities to benefit from the eventual upturn. For an industry founded on innovation, the current turmoil will create openings for nascent ICT companies.

Confronting the Crisis finds that although credit is now less abundant and more expensive, with financing costs for operators on average 3 − 4 per cent higher year-on-year, savvy operators can take advantage of the economic turmoil to reposition their services for the upturn. Funding is still available for players with sound business models, established demand and early projected cash flows. Alternative sources of financing are now needed, with a growing role for government financing and economic stimulus packages.

Many analysts contributing to Confronting the Crisis underlined the need for ICT as vital services and suggested that fixed-mobile substitution and consumers' decision to switch to mobile telephony may gain momentum in developed markets during a prolonged recession. The report also notes that long project lead times for the satellite industry mean that it has been less affected in the short term, with strong recent growth in demand from developing countries.

The financial difficulties facing the private sector could add to pressure for government intervention in the financing of national backbone infrastructure. Governments are already stepping in to diminish the impact on the transition to next-generation networks (NGN), which can carry voice, data and media services simultaneously. Several administrations have announced commitments to invest in their national backbone infrastructure, while others, such as the European Union, have included the roll-out of broadband networks in their economic stimulus packages. Although the financial crisis may delay investment in NGN, it has also led to a widespread reaffirmation of the importance of building advanced telecommunication infrastructure as part of an economic stimulus package.

The Confronting the Crisis report finds that although by early 2009 some operators had cut capital expenditure (CAPEX) by 10−15 per cent, many telecommunication companies acknowledge that investment is vital to maintain quality of services. Growth rates in capital expenditure by regional mobile phone operators may slow down, but CAPEX is unlikely to decline on a global basis. Operators are instead focusing on adopting a more rigorous approach to control costs and increase operational efficiency.

Equipment vendors may be first in the firing line of cuts in investment, but soaring growth in mobile telephony in developing countries has not yet been affected by the crisis. Large emerging markets, including Brazil, India and Nigeria, registered record subscriber additions in September and October 2008. Mobile operators are generally better placed to weather the downturn than fixed operators, as CAPEX accounts for a smaller proportion of their cost base and the incremental cost of upgrades to their networks is low.

http://www.itu.int/osg/csd/emerging_trends/crisis/index.html

Mobile phone banking for Somalia

A new system of making payments by mobile phones has been launched in the northern Somali region of Somaliland.

Telesom's Zad service means that people can send money to friends and relatives or pay bills just using their phones.

The self-declared republic of Somaliland is much more peaceful than the rest of Somalia.

But the telecommunications and money transfer sectors have thrived across the country, despite the conflict which has raged for the past 18 years.

Telesom deputy director Mohamud Aden Ahmed-Hadeed told BBC Somali that the service would improve the lives of people and help develop the country.

"They can have access to their accounts with a Pin number and they can send money to anywhere, anytime. People can pay their bills or buy things from shops," he said.

A similar system was launched in neighbouring Kenya in 2007, with a network of more than 7,000 agents - mostly shopkeepers.

Somalia's conflict has forced hundreds of thousands of people to flee the country.

They use an informal, trust-based money transfer system known as "hawala" to send money back home.

And the lack of a government since 1991 has not prevented several mobile phone companies from setting up their businesses.

Aid agencies estimate that some four million people - a third of the population - need food aid.

http://news.bbc.co.uk/2/hi/africa/8101067.stm

Internet Economy: Valuing the Web's Economic Impact

Tangible or Intangible, Its Effect on Business and Culture is Big

Posted by John Deighton and John Quelch

Older internet users may remember the battles over the commercialization of the web, or the "World Wide Web," as it was known in the early 1990s, when the first Mosaic browser was introduced. Back then, pioneering adopters passionately condemned the first web advertisers and tried to bring down their sites with "flaming" attacks. The fight was lost as consumers voted for free information supported by advertising over subscription services.

Ironically, online advertising and the commercialization of the web achieved important goals of the resisters -- to preserve the web as a medium for free publishing and communications. A recent TNS study reported the leading activities of internet users as:

* used a search engine to find information (81%);

* looked up the news (76%); used online banking (74%);

* looked up the weather (65%); researched a product or service before buying it (63%);

* visited a brand or product website (61%);

* paid bills (56%);

* watched a video clip (51%);

* used a price comparison site (50%);

* listened to an audio clip (44%).

All of these activities either are subsidized by advertisers or take the place of traditional advertising, information search and purchasing and banking transactions. Free access to information entertainment, along with speedier and more convenient transactions, are a great deal for consumers. Social networks and the easy connections they facilitate are transforming social life and have helped to elect a President. They also increase productivity in the larger economy.

How can we quantify the economic impact of the internet? A new study we prepared with Hamilton Consultants for the Interactive Advertising Bureau uses three methods to value the contribution of the advertising-supported internet to the U.S. economy:

* Employment value. The internet employs 1.2 million people directly to conduct advertising and commerce, build and maintain the infrastructure and facilitate its use. Each internet job supports approximately 1.54 additional jobs elsewhere in the economy, for a total of 3.05 million, or roughly two percent, of employed Americans. The dollar value of their wages is about $300 billion, or around two percent of U.S. GDP.

* Payments value. The direct economic value the internet provides to the rest of the U. S. economy is estimated at $175 billion. It comprises $20 billion of advertising services, $85 billion of retail transactions (net of cost of goods) and $70 billion of direct payments to internet service providers. In addition, the internet indirectly generates economic activity that takes place elsewhere in the economy. If one used the same multiplier as for employment, 1.54, then the advertising-supported Internet creates annual value of $444 billion.

* Time value. At work and at leisure, about 190 million people in the United States spend, on average, 68 hours a month on the internet. A conservative valuation of this time is an estimated $680 billion.

The advertising-supported internet also helps the economy by fostering innovation, entrepreneurship and productivity, particularly among small businesses that create most new jobs in the U.S. In addition, larger companies in this sector, such as Cisco, Google or Adobe, have been a haven of relative stability through the current economic downturn and boost the U.S. balance of trade through their global sales.

Consider also the social benefits of the internet, harder to quantify but including the power of access to information as well as greater flexibility in balancing work and family obligations through telecommuting. The economic downturn is accelerating consumer interest in social networks and online communities as a source of support. And 19% of all U.S. marriages are now the result of bride and groom meeting via the internet.

When regulators start trying to constrain the internet, let's be aware of its enormous and ever-increasing economic and social impact. The internet is an economic powerhouse that drives U.S. competitiveness and productivity.

John Deighton and John Quelch are both Harvard Business School marketing professors.

http://adage.com/digitalnext/post.php?article_id=137496

US: Streaming media a growing cash cow

By Mike Robuck

Streaming video and music will generate more than $78 billion in network-derived and content-derived revenue over the next six years in the United States.

According to a recent study by The Insight Research Corp., streaming media includes content that is delivered across the Internet, IPTV network or mobile handset. Streaming media refers to the transmission of digital audio and video files over an IP network or wireless network in real time or on-demand, while prohibiting users from storing the files locally.

The study also estimated the revenue from the various types of content-derived revenues, along with associated advertising revenue. The streaming market is projected to grow at a compound annual rate of 27 percent over the next five years, driven by on-demand audio, on-demand video and the accompanying advertising revenue.

"Over the past seven years, as we've tracked the developments in streaming it has evolved from an esoteric niche to a mainstream market," said Robert Rosenberg, Insight Research president. "What we predicted way back when is coming to fruition. The advertising revenue that long supported traditional TV is gravitating to this new medium, putting downward pressure on traditional TV distribution schemes.”

http://www.cedmagazine.com/News-Streaming-media-cash-cow-061609.aspx

European online ad growth slows in biggest markets

The amount spent on online advertising has slowed to under 20 percent in the most mature markets, as search remains the most popular online advertising format, according to new research. The findings, from the Interactive Advertising Bureau Europe (IAB Europe), form part of its annual advertising expenditure survey for the year ending December 2008. The 2008 report contains online expenditure data for 19 markets. In 2008 the European online advertising market was worth EUR 12.9bn with a like-for-like growth rate compared to 2007 of 20%. In the US, online advertising grew 10.6 percent in 2008 and was worth EUR 16.6bn. However whilst the pan-European figure is one of growth, it is no secret that 2008 was one of the worst years for advertising in any medium. The online sector was not immune and experienced a challenging year, particularly in the 10 most mature markets. The key difference is it did still manage growth - albeit at a lower rate. The top 10 markets in Europe account for 93 percent of the total value of the market. Many of these countries saw year-on-year growth rates under 20 percent. The Netherlands, Europe's early adopter of online advertising grew only 9 percent in 2008. Other mature online markets saw similar trends, with growth slowing in France at 18.5 percent; the UK, Germany and Sweden at 19 percent and Italy at 20 percent. Just beating the 20% barrier, Belgium grew 21 percent and Denmark and Norway hit a 22 percent growth rate. Spain by comparison saw relatively strong growth at 26 percent. Search remains the leading format in Europe with the strongest year-on-year growth rate of 26 percent, accounting for 43 percent of online ad expenditure in the 19 countries measured and a value of EUR 5.6bn.

http://www.netimperative.com/netimperative/news/2009/may/european-online-ad-growth-slows-in-biggest-markets

US: Economic Value of the Advertising-Supported Internet Ecosystem

Interactive advertising is responsible for $300 billion of economic activity in the U.S., according to the below study released by the IAB. The advertising-supported Internet represents 2.1% of the total U.S. gross domestic product (GDP). It directly employs more than 1.2 million Americans with above-average wages in jobs that did not exist two decades ago, and another 1.9 million people work to support those with directly Internet-related jobs. A total of 3.1 million Americans are employed thanks to the interactive ecosystem. These are the key findings of the first-ever research to analyze the economic importance, as well as the social benefits, of the Internet.

The study, commissioned by the IAB was produced by Harvard Business School professors John Deighton and John Quelch, along with Cambridge, MA-based Hamilton Consultants. The study was designed to provide an impartial and comprehensive review of the entire Internet economy and answer questions about its size, what comprises it, and the economic and social benefits Americans derive from it.

http://www.iab.net/media/file/Economic-Value-Report.pdf

Recession dampens global telecoms growth in 1Q, but India & China don’t seem to have noticed

* The Top 20 global service providers generated USD251 billion in revenues during the first three months of 2009; 3% up on Q108 but 1% down on Q408

* The Top 10 telecoms technology vendors generated USD59 billion in revenues during the quarter; 5% down from Q108 and a whopping 15% down from the last quarter

* Wireless subscriber additions in the quarter fell off the pace a little as 153 million net new subscribers were added, 10 million fewer than in Q408

* No less than 48% of Q1 wireless growth came from India and China which enjoyed an exceptional quarter; growth slowed in many other markets with Western and Eastern Europe being particularly slow. Countries like France, Germany, Italy, Poland, Ukraine

* Broadband subscriber additions during the quarter came in 14 million, in line with Q408 additions. China accounted for 30% of global growth; the United States was the only other country to add more than 1 million subscribers in the quarter

http://www.telegeography.com/cu/article.php?article_id=28854

IAB Heads to D.C. to Lobby Digital Ad Biz's Case

By Mike Shields

Concerned about potential regulation from the Obama administration and the Democratic-controlled Congress, the Interactive Advertising Bureau has descended on Washington D.C. this week, armed with new research conducted by a pair of Harvard Business School professors to make the industry’s case to lawmakers.

According to a new study issued by the IAB on Wednesday (June 10), online advertising is responsible for $300 billion of economic activity in the U.S.--or 2.1 percent of the nation’s gross domestic product. Plus, over three million people are employed in the U.S. thanks in part to the online ad business, including 1.2 million with high-paying jobs that did not exist two decades ago, says the study.

Those figures were compiled by Harvard Business School professors John Deighton and John Quelch, along with Cambridge, MA-based Hamilton Consultants. The fact that the IAB turned to Harvard to produce such ammunition underscores just how serious the organization is taking the regulation issue. For example, there some industry insiders fear that in the current pro-regulation environment, D.C. lawmakers could come down inordinately harshly on the online ad business—such as placing prohibitive restrictions on nearly all forms of ad targeting which employs consumers’ Web-surfing data.

“The results of this study confirm the vast influence and driving importance of the ad-supported Internet to the overall economy,” said Randall Rothenberg, IAB president and CEO. “By understanding the total contribution of the Internet to the U.S. economy, we can more accurately assess the impact of potential legislative changes on the Internet’s operations, particularly the consequences of any actions that would alter ad-supported business models.”

In addition to the new research, the IAB is using its Washington visit to announce the official launch the Long Tail Alliance, a group that will focus on issues related to small, advertising supported Web businesses.

http://www.mediaweek.com/mw/content_display/news/digital-downloads/broadband/e3i68d0e189b7e43eafdc71d8f365683acc