Sunday, July 30, 2006

The Emergence of Convergence....

Looking at the Microsoft web site and I noticed that Microsoft has launched a range of webcams and are marketing them as digital communication devices. This has come hot on the heels of the lanch of the new Windows Live Messenger - the replacement for MSN Messenger which to my mind is Microsoft's response to Skype (we'll see how that goes, but the theory seems right).

This observation comes in the same week that I took delivery of a new XBox360 - the Microsoft second generation games console and media device. It was this second reason that drove me to acquire one as I am in the throws of setting up a home media network (the XBox360 will act as a terminal to access any digital content stream on either a Media Centre PC or a WindowsXP machine - apparently). It is an impressive piece of technology.... the integration of the networking technology and the fact that the profile links to my MSN ID is impressive. It is fine to talk about this concept of multi-channel access to consumers, but this is the concept in action.

The link between a webcam for Windows Live Messenger and my XBox360 comes from my sense that we are watching a gradual piecing together of a generational shift in communications, media and entertainment -and the true convergence of the three. Behind the scenes, companies like Microsoft, Sony and others are working hard to build an internet based "backbone" of profile services and information designed to facilitate this convergence. My MSN profile powers the preferences for my XBox Live account. My communications - now voice, video and email - are now linked to an account through which I can consume content and entertainment. I can currently buy games online through XBox Live and I am sure that movies, music and other content is not far away (especially given the announcement of the Microsoft ZUNE over the last couple of weeks - their much vaunted "iPod Killer") and the fact that Windows Vista is purporting to even better support for rich-media content. This is one vendors take on how to bring all of these things together, but it is a vendor who has started to deliver some real, workking products to the market.

So ... what's the point? The point is that the notion of convergence is very quickly becoming a reality. By integrating all of these functions, applications and content at the "software" layer, the vendors are changing the playing field. A telco no longer provides the capacity to make phone calls (let alone video calls), I no longer need to visit a retailer to buy a game, I don't need to go to a video store to get a movie and I buy my music by the song, not by the album. The usual gumpf about the "shift in the balance of power" would fit here, but for me, it is the signficance of all of this coming together into a ubiquitously accessible "user profile" which is the real story. The digital channels are narrowing their focus - it is all about ME (well all the "MEs connected to the internet)!

For marketers and providers of content and services to consumers, it is time for a wake up call - get your head around the "real convergence" - the convergence of content, services, profiling, marketing, information, resources, entertainment - EVERYTHING in a user-centric model. Clever marketers are not jumping onto the YouTube bandwagon now and hoping to be cool (that is Soooooooo last month), nor are they racing to generate podcasts of mediocre, self-indulgent, low-value promotional waffle. They are working hard to understand what consumers want from a converged model and how to reach them in this environment.

Our team are working on some very cool ideas in this space, albeit that getting the clients to be brave enough to reach into the new market opportunity. We are learning (and applying) the important principles of "shared value" and "user defined services" and a whole bunch more. Some of these things are very clever abd I am sure will deliver some significant innovation to our clients... but then, the team are working pretty hard to change the world!!

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