Besides creating content that tells magnificent stories and choosing platforms that sustain an ecosystem, a complete framework also need applications to facilitate the interaction between users and media.  In my previous two blog posts, I gave a preview of the most promising developments in content and platform in 2010.  Although content is the centre of the digital experience and the platform determines the audience, an application is perhaps the most important of the three components when discussing how to repurpose existing information so that it is accessible and usable.

There are many intermediary applications encoding and decoding electronic files on different platforms before one can consume content in text, audio or visual forms.  For instance, users first find digital media through web search engines before they can watch videos online.  2010 will see many applications that challenge the status quo of how we consume and think about digital media in our homes and in the workplace.  Here are three items on my to-watch list:

1. Simplifying collaboration

Today, approximately one million emails are sent every second by 1 billion people to convey information.   This has contributed to information overload experienced by one in five individuals on Earth.  Those who have tried to collaborate over the web on group documents, presentations and spreadsheet know the pains of back-and-forth emails, tracking changes and revision control.

On a mission to organise the world’s information and making it universally accessible and useful, 2010 will be a banner year for Google as it takes its next step toward that goal.  Developed by their team in Sydney, Australia, their newest product, Google Wave, will simplify the workflow of group collaboration in real-time.  Instead of sending files to one another, collaborators could now work on the same copy of a document at the same time – a hosted, personal, Wikipedia-inspired conversation all in your “inbox”.

2. Streamlining workflow

Over the years, there have been many challenges to Microsoft’s monopolistic hold in the operating system segment – 91% of PCs run Windows today.  One of the adoption barriers for new users has been relearning how to complete basic tasks.  With this in mind, in addition to security and speed, Google is releasing its own operating system in late 2010: Chrome OS.  This operating system gets users to the web faster by removing unnecessary routines and procedures during boot up.  Since the operating system is web brower-centric, there is little relearning for those who spend their time on the web.

There is still a need for native, local software, but with the increased accessibility of high-speed, broadband Internet, the digital experience between a hosted-solution and a native-solution becomes less distinguishable for the everyday user. This is just one example of applications streamlining workflows in 2010. As organisations search for ways to reduce cost and improve efficiency, applications that streamline workflows and simplify collaboration over the web will continue to be in great demand in all verticals and horizontals.

3. Beyond software

So far, I have been presenting applications as software, but do not let that mislead you.  Users do not interact with digital media directly – we click on mouses, not on hyperlinks. Much of the recent attention has been on applications as a software because of social media’s fascination with the Apple App Store.  However, not all applications are software.  In fact, the most defensible and profitable applications are often not software.  For instance, 80% of RIM’s US$11 billion annual revenue is from hardware (i.e. BlackBerry) and 95% of Apple’s US$15 billion revenue in the first quarter of 2010 is not from software (i.e. iPhone, iPod, MacBook).

However, it is important to remember that there is an interdependent synergy between hardware and software when differentiating from competitors.  The Apple iPad is the latest example of such harmonious balance.  Recently announced, there is confusion on how the iPad fits into today’s marketplace between smartphones and laptops.  In short, it is a versatile handheld that combines two applications: a US$500, 10-inch, mobile, LED television for the 21st century teenager and an interactive clipboard for casual use and knowledge work in the 21st century. In other words, the Apple iPad is the “mouse” of the 21st century. The next wave of PCs in tablet form factor (e.g. HP, Dell), with the integration of open source operating system (e.g. Android, Chrome OS) and broadband connectivity (e.g. 3G, WiMAX) will create the perfect storm in 2010 and beyond.

“People that love software want to do their own hardware.” – Steve Jobs

Digital Media Ontario

What does this mean? How does all this translate into opportunities for you? If you are seeking capital and advice to grow your digital media business for the iPad platform or any others, you have come to the right place.

The Ontario government is taking steps to ensure Ontarians are in the front pack of the digital economy in the 21st century. In November, the Ontario government announced plans to invest up to $26.4 million (24% of the $107 million project) in the Waterloo region to create the Communitech Digital Media and Mobile Hub. At the national level, the federal government has created the Canadian Digital Media Network also to be based in downtown Kitchener and Stratford.

Then, there is the $250-million Ontario Emerging Technologies Fund (OETF) to co-invest with VC firms including Celtic House, JLA Ventures and Tech Capital in various verticals such as digital media, cleantech and life science.  Recently, Bering Media, a MaRS client since 2008, has completed its Series A financing round led by Tech Capital Partners, with participation from GrowthWorks Commercialization Fund and OETF – the first by the $250M co-investment fund.

At MaRS, our ICT practice has experienced advisors, forward-thinking market intelligence, educational programs, self-guiding instructional workbooks and help for you to find money. All of which you can use (for free) to catalyze your start-up.

Seems like the perfect storm to me.

Tim Tang

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