At SXSWi, how much should big media be listening?

The annual confab in Austin is a hotbed of wild ideas about the future of the media industry. But some of it should really be taken with a grain of salt--or several.

AUSTIN, Texas--With panels and discussions every year about social engineering, hacking, remixing, and culture jamming, South by Southwest Interactive is the must-attend conference for geeks who want to shake things up.

Maybe that's why the many panels at the conference about the future of media--from print to broadcast to music to film--were tinged with the message that fast, often radical change is necessary. With panel topics like "How Copyright Law Failed The Digital Age," "New Think for Old Publishers," and "Old Media Finds New Voice Through Twitter," this year's SXSWi promised to offer a blunt take on some longstanding stalwarts of the media industry that now lie in states ranging from evolutionary flux to full-out crisis mode. The Austin Convention Center was buzzing with talk of the future, but there was no denying the upheaval going on outside.

The short version of the long version we all know: Traditional moneymaking strategies across the media landscape are losing steam. While solutions from interactive ads to subscriptions to micropayments to social-network "app-vertising" to all sorts of digital sales models have been pitched and put into effect in this new world of iPods and Kindles and YouTube and a dozen different streaming media services, the digital revenues aren't keeping pace with what's being lost. A nasty recession just throws a big, costly fork into the equation.

"I should set up, like, a little picture of me (on my Web site) with a picture of a pirate eye patch on, saying 'Arrrr, give me five dollars!'" said documentarian Morgan Spurlock in a panel called "The Future of the DVD and Digital Distribution," when the topic shifted to the long-shot possibility of asking for donations to combat piracy.

He was joking, obviously. But SXSWi panelists as a whole seemed to indicate that struggling media companies shouldn't just embrace the cutting edge, they should more or less dive off it headlong.

"There is no low-risk solution to innovation. When times are tough, brands and agencies and everyone has a tendency to say, 'Well I don't want to experiment,'" said Patrick Moorhead, director of emerging media at the Microsoft-owned ad firm Razorfish, in a panel discussion on Saturday morning about innovation during a recession. "Our belief is that if you stick with what you've got, that's a bigger risk than taking a risk on emerging media and testing something new that could potentially teach you something."

Moorhead showed off "NewsBreaker Live," an ad campaign created for MSNBC in which motion sensors in participating movie theaters let the audience play a full-body version of a "Pong"-like game to capture real news headlines. It certainly livened up the panel, even though no one could really see closely enough to read the actual headlines.

"South by Southwest, from what I can tell, it's very much end-filtered," said Eric Feng, chief technology officer at Hulu, the joint video venture between News Corp. and NBC Universal. "I think it really prides itself on a free spirit, and you're going to get honest feedback from real people, real users, real companies, a lot more so than some of the other conferences you might go to."

So you'd think that this is the sort of place where the old media's struggling elite might show up in search of a few answers, however out of left field they might be.

But they're hard to find. Wander the halls of the Austin Convention Center during SXSWi, and you'll run into loads of start-up entrepreneurs, digital marketers, and representatives from both traditional and outside-the-box advertising agencies. Traditional media companies on both the print and broadcast fronts, however, are tougher to track down. It's unclear as to just how much of a presence the likes of a major broadcast player or a national newspaper has at SXSWi--it's easy to get lost in the hordes of developers and designers.

"I assume they're here," said Avner Ronen, CEO of the video software start-up Boxee, which has made waves recently for offering a well-received product and getting into a sort of content feud with Hulu and its video partners . "I haven't run into them."

Kevin Marks, a Google product manager who has been working on its Friend Connect product and marketing it to some traditional media properties, thought differently. He pointed to panels like "Designing the Future of the New York Times," in which designers from the struggling newspaper talked about their attempts to propel it into the digital world. "I was very impressed with the (traditional) news people here who say, 'We have this problem and we're finding ways to work through it. We're going to work with the Web,'" Marks said in an interview.

On the other hand, there are dangers in listening too closely to the digerati. SXSWi attracts a self-selecting crowd of well-educated futurists who live primarily in major cities or academic hubs, a good number of whom are probably quite confident that the digital revolution is in full force just about everywhere. It's a truism best personified by the fact that the concentration of Apple's iPhone , the quintessential gadget of the tech-savvy and hyperconnected, was so high in Austin during SXSWi that carrier AT&T had to boost its infrastructure for the week. Attendees are invariably in the company of very bright people on the bleeding edge of digital media. But this can be a myopic bunch.

Ricky Van Veen, co-founder of entertainment brand CollegeHumor, pointed out in a Saturday panel called "Comedy on Television and the Web" that even though canceling cable subscriptions and even ditching TVs altogether is trendy among young people in cities like New York and San Francisco, a recent study showed that the trend nationwide is very different. A start-up like Boxee or even Hulu doesn't have the "wow" factor in a suburban household that watches "Dancing With The Stars" on TV in the evenings as it does in a city apartment where the broadcast airing of "The Office" conflicts with happy hour. "The average American watches 151 hours of television per month," Van Veen said, citing Nielsen statistics from last month. "That's an all-time high."

In an interview with CNET News on Monday, Hulu's Eric Feng concurred. "For the Super Bowl you had a hundred million people tune into one event. You still can't amass that type of audience in an online environment."

But however edgy some of the thinking may be at SXSWi, and however much its demographic may deviate from the U.S. population as a whole, the revenue crisis is real, and this is one of the places where it takes center stage. According to Avner Ronen, the sense of uncertainty over profits is what's holding back some of the innovation that SXSWi's masses are so eager to set in motion.

"That's what's scary for the media companies dealing with Boxee," he said. "They saw what happened with newspapers. It's unlike the record industry, it's not like they fought it. They endorsed it, they executed very well against it, it's just...the analog dollars to digital pennies thing."

Right now, many of them are at the point where they could use some insight--even the wacky kind with eye patches.

 

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