November 24, 2009

P.S.

This is kind of pathetic. A group of companies who do not clearly understand the right approach to the internet platform and more importantly, who have failed to draw audience to their own sites on it, suddenly think that creating a second entity together — and going mobile with it — will somehow change this.

Uh, right.

It doesn’t matter if you band five companies, ten, five hundred, fifty thousand — if nobody knows they’re doing (which is why media business is in the state it is in), it isn’t going to matter. Assuming a group of companies who have proven they don’t get it suddenly get it, it’s still wrong — each individual company on the internet should be focused on building an audience around themselves. It’s a bad idea to do anything else.

6:35am  |   URL: http://patriciahandschiegel.tumblr.com/post/255675440/p-s
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Here's The Wrong Idea About The News Corp/Microsoft Bromance, And The Internet In General

I wasn’t going to touch the Newscorp/Microsoft rumored romance because I don’t care, and neither should you, but then I saw this. If there are seven signs of the coming demise of the media business, a new scroll was just opened. This is the wrong idea about internet and platform business.

To start, let’s talk about search. Search is something that does drive traffic, without question. However, it doesn’t always mean a lot of traffic, or that the traffic turns to audience — that sticky, engaged customer base that spends a boat load of time on your site and most of all come back (and are worth more money). In fact, it can often be opposite. I say this first hand as a former digital media company owner, but also it’s a common problem I hear about a lot in the industry. That’s because while search can play a part in driving traffic to your site, it’s only one part — and more importantly, is no match for marrying a real audience, or customer base. A million people driving by McDonald’s every day only matters if someone stops in to buy a sandwich. See what I’m saying? When it comes to search driven traffic, what really matters is what the traffic is doing, how long it is staying and most importantly, if it’s coming back. I’ve seen lots and lots of cases where it’s driven none of those three elements on a site.

If News Corp takes itself off Google’s giant digital bottle and puts a hard focus on truly building an audience on its internet properties, I wouldn’t necessarily agree that it’d crash and burn. Audience is what Google built that made itself so successful — Google might be a household name now but at one point was a baby startup that didn’t have anybody using it. The same is what - and only what - has made Facebook and Twitter what they are. That’s because you have to sell a product to a customer base — if you don’t have one, you better make one. Far too many sites in web 2.0, and particularly media, are not at all focused on building an actual customer base. They’re fixated on traffic. That’s a problem. There is some money in traffic but the bigger win is in audience. Audiences are built by a variety of tools and strategies — search is just a part, along with advertising, social media, brand integration and all kinds of others. This is how companies need to see the world. What tools and how they are used is unique to every company. If News Corp is detaching from the Google Mother Ship with the intent to implement a very solid, focused effort on creating a real audience on its digital platforms — including use of search (Bing) — its investors should fall over from shock. That’d mean it gets something that lots of other companies haven’t even begun to understand about business over the internet platform. It also means it could be successful with it. This is the advantage in platform business. This would make News Corp investors ecstatic.

If someone who understood the internet were speaking about this, they would be questioning what News Corp’s strategy and plan might be for replacing whatever audience it was getting from Google (since obviously Bing’s not where Google is yet) - not necessarily just making the assumption that the company is doomed. And BTW, if the company was really seeing big results, would it be so willing to part from Google? I don’t think so. The Reuters article quotes an analyst that says Google search provides 14% of traffic to News Corp’s properties but it doesn’t state what that traffic does — How long is it staying? Is it coming back? That’s what really matters. 14% doesn’t seem like very much. What if News Corp were able to swap that with 14% driven by real, viable customers? It’s absolutely not impossible. In fact, it should be everybody’s priority in internet business.

P.S. — I wouldn’t necessarily assume that Google’s always going to be a giant. The odds are in its favor as the company has proven to be somewhat agile, but the future is going to be very different, including the role of search. It’ll depend on how the company adapts.

12:41am  |   URL: http://patriciahandschiegel.tumblr.com/post/255437306/heres-the-wrong-idea-about-the-news-corp-microsoft
FILED UNDER: news corp microsoft rupert murdoch 
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November 23, 2009

This Is Fascinating

Twitter’s Biz Stone says could go IPO route - Reuters today

One of the early functionalities of the internet was its person-to-person communications capabilities. I’m going to fast forward past the early-early days of this to the commercial/consumer internet as we’ve known it to keep things simple. I absolutely suggest learning all you can about what the internet is, but for today’s purposes I’m going to date back to the days when only the most techest people knew about it, pre-AOL. Do you know what existed? Chat rooms. I post something, someone posts back. Someone may chime in. Sometimes people shared information, they even had occasional meetups. Sound familiar?

Social networks are not a new thing on the internet. On the contrary, they’re one of the oldest. Certainly much, much older than Facebook and Twitter. They were called all kinds of other things — bulletin boards, message boards, forums, chat rooms. But, the point and purpose was always the same. I’ll keep refering to it as “social networking” because it’s what it is today, but always keep in your mind: This is an old thing. Initially people were kind of turned off to connecting with other people online. Over time, this evolved and while still timid, user engagement of social networking continued to grow. Communities were mostly surrounded around niches, and some drove converted user action and drove sales better than any of the social networks today. I know of several active sites that charged member fees. In 2005 came the paradigm shift of the mass consumer market’s discovery and adoption of social networking (enter MySpace). But, even after all this time so many things about this feature of the internet have remained the same. Trolls, haters and influencers were all part of the user behavior and something both users and site owners had to deal with. So was that little issue about making money. In fact, it had been so much to the point that nobody would have ever paid $580 million cash to own one. This has certainly changed today but the problem of how to make money on social networks has not. In fact, it may be more perplexing than ever.

There’s one and only one reason why: Social networking is not an ad play but a service play. Services over a platform typically do not make money on ad revenue but on added services users pay to have. Have you had any ads before, during or after a landline telephone call? Exactly. You do, however, pay for call waiting, voice mail, three-way calling. That’s because the model for a utility/service over a platform is not typically an ad model. It’s very difficult to insert an ad into a stream of conversation — that’s why telcos invent things that enhance the basic user experience (like call waiting) and charge for them. Social network users today are way more tolerant of brands and promotion being inserted in the experience than ever, but its still within limits. It’s hard to say how tolerant they’ll remain. It’s likely regardless that at the very least social networks will need to rely on a hybrid of value-added services and advertisement revenue. Think Facebook’s virtual gifts and Facebook ads. In the long run, however, based on where person-to-person communications functionality will likely head this’ll probably fit increasingly less. In other words, if I was running Twitter I would be focusing on how to create things that users want and are willing to pay for in addition to the free service it provides. This way, it has less reliance on advertisements — shoe money, as you’d say.

I find the suggestion of Twitter going IPO fascintating not just because something that was once not worth a dime to anyone (social networking) is now valuable enough to support a statement like this. I bet I know where Twitter’s heading. I won’t disclose, but it’s something nobody’s expecting. At least I hope. It’d be a smart play.

7:21pm  |   URL: http://patriciahandschiegel.tumblr.com/post/255129178/this-is-fascinating
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FILED UNDER: twitter twitter IPO 
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November 22, 2009

Meet The Magical Mystery Internet Platform

The internet is a magical thing. Judging by the state of the market, it’s a bit of a mystery as well. So today’s post is all about explaining what the internet is, why it is here, and what it’s here to do. I’ll also try to describe a little what the future might look like and what might happen next.

The internet was originally created by the government. Telecommunications companies are who built the commercial/consumer internet we all use now. In order to really understand why the internet platform is here and what it is here to do, it’s important to know a little about communications and information distribution platforms so I’ll start there. Radio, broadcast television, landline phone (PSTN), mobile phone and print media are all ways of distributing information and/or fostering communication between people. In a society, these things are critical for obvious reasons, and that’s what a government would care about. In the event of a natural disaster, attack, or other emergency, people need information. Second to this, people need to be able to communicate with others. Think about it and you’ll see where and how platforms fit into our world and the important role they play in a society. That is why they exist. The side bonus of course is that they can foster consumer recreational use and entertainment as well.

Unfortunately, in the case of an emergency, the platforms other than the internet are typically disabled. If your city were leveled, the print media wouldn’t likely be able to provide information, and you would not likely be able to get it. Even in the slightest storm, TV and telephone platforms are often knocked out. In addition, each of these older platforms require their own separate devices to access and other limitations. You can’t watch TV without a TV set plugged into the wall, you need one type of phone for landline (PSTN) and another for mobile, etc. This obviously creates problems — the means of providing information and communication in a society needs to be stable. Second, it needs to be as accessible as possible.

Enter the internet, which not only marries all of the things other existing platforms can do in one, but also enables consumers to access it from a variety of devices — including while on the go. Magical! What’s more is that it’s “fault resistant” — in layman’s terms, this means that when something goes down (storm, attack, etc.) by design the internet will continue to distribute information. How this works is a little complicated to explain, but in a nutshell, it reroutes itself so that services continue. Imagine what a powerful platform this is in a society. Enormous!

Up until 2005, the internet was not at the full functionality to provide certain communications and information distribution services delivered via the other, older platforms. It can now. This will make for a very, very interesting future to soon come.

Other important things to know:

A single, unified platform means many companies in one sandbox. In the past, NBC played one platform (broadcast TV), Conde Nast on another (print media), AT&T telephone on yet another (PSTN and/or mobile), and of course, companies like Google over the internet (Internet protocol). But, as the internet grows into its desired destiny of being the sole information and communications distribution platform in our society, guess what’s going to happen: All of the above doing business and selling services in one place, the internet. This creates a very interesting new landscape — and lots of new issues, including ensuring that the playing field is fair, because in that mix of course are those who built the internet, telecommunications companies.

There have already been many cases here in the U.S. and abroad of telcos messing with certain functionality of the internet that may hurt their market. Net neutrality is not just about ensuring consumers have fair access to the internet platform, but also that it remains a fair playing field.

Understanding how the internet works is important to understanding why it’s important to keep things fair. Information travels across the internet platform in what’s called “packets” — they’re like little boxes with stuff inside. Data packets are very “light” — they can move with very minimal speed (hello, dial up). Voice is a bit heavier, and then video/TV the heaviest. In order to move well enough to deliver services to us, these packets need speed and the ability to be delivered. Because these packets are essentially moving over one single platform, which packets get priority becomes an issue. This is called “provisioning.” Lots of people talk about how Vonage service was poor quality and blamed Vonage, but it was often a case of an ISP not giving priority to the voice packet Vonage was asking it to deliver. It’s a complex thing to explain, but in a sense plays a part in what net neutrality is all about — When there’s only one platform, who decides what services get priority? Who is going to prevent companies such as telecom providers (who essentially “own” the internet) from blocking the delivery of those services?

A study into voice over internet would show you lots and lots of cases where that’s absolutely happened. Not only have telcos blocked other companies from providing phone calls over the internet, but there is actually software to do it. Net neutrality also plays into fair access to the internet by consumers, but an equally important issue is of course when everybody’s in one sandbox, who is in charge? And, how can we keep everything fair so that everybody can do business?

This is all far ahead but it is a reality. The internet is where it had intended to be in terms of what it can do, but that doesn’t mean we’re all going to wake up tomorrow and see it as a reality in our world. That’s because there’s a lot more to it than just the platform being able to do what it’s here to do. User adoption is enormously critical to the process, along with devices. We are starting to see the early evolution of devices, sparked in part by the invention of the iPhone. Apple very much understands not only both of these elements, but how to move mass user bases to adopt. If other companies knew and understood the same, which they very much could, they’d have just as much of a chance to be as successful. Unfortunately, mass, widespread misunderstanding and misinformation about the internet is limiting everybody but those who know better, like Apple.

So what’s next? The internet has disrupted industries by two and only two things: What it can do, and where users are at in adopting it. Up until 2005, it wasn’t much of a threat to TV business as it couldn’t deliver video/TV well enough to be dangerous. Now that it can, you are seeing the very early signs of its coming disruption. Print media was first disrupted in the late 90s, but because users and devices weren’t in a place to really shake the business, it wasn’t hit much. This is changing now — Kindle, tablet PCs, iPhone, etc. has made internet access easier and more comfortable, and that’s changing how and where we access and consume information in our world. This has nothing to do with social networks or social media — that’s another, different functionality of the internet platform. It has everything to do with the proliferation of internet use in our society and the ease and comfort of accessing it.

The next generation of the internet platform’s evolution in our society will likely shift to devices, since the internet at long last is ready to go. This has the potential to completely change the landscape, though with all this confusion and unwillingness to learn, it’ll likely be as slow and painful as virtually everything else related to the web has. It doesn’t have to be this way — retail’s adaption and adoption to the internet’s disruption was really quite smooth. TV business despite what bloggers and media claim is also adapting and adopting pretty well. It understands it is a bit too early to be a concern, and its very focused on learning what to do. I also think its reasonable to believe that the internet will actually disrupt internet business in the end. In the past, it had a fairly open playing field with virtually ignorant competitors — that won’t be for long, particularly since internet business has become as confused about the internet as everybody else. I think it’s also likely that user interface will change in the coming few years, booming lots of innovation and new business as well.

In terms of monetization over the internet platform, that’s a snarly mess I’ll address in the future.

I’ll keep posting on this topic this week, digging into some areas. Let me know if there’s something specific you want to drill down into, ask or know.

10:54am  |   URL: http://patriciahandschiegel.tumblr.com/post/253292804/meet-the-magical-mystery-internet-platform
November 20, 2009

AT MIT Today

As mentioned, I’m speaking at the MIT Futures of Entertainment 4 event, and as I write I’m in the lobby of the school (which secretly feels amazing and makes me miss being 20). I got an early taste of east coast weather this morning — it is crazy raining, which first of all, that’s a big no for the gold Marc by MJ boots I’m wearing, second it means it can be very hard to get a cab in this town and third, I dropped my phone which snapped the back off and the battery before landing in a giant puddle. Yikes. And all of the above made me miss the morning keynote, which I was looking forward to seeing. But that’s ok — I’m here now. In another few minutes my panel will be starting. The topic of transmedia isn’t one that my industry (internet) is really talking about yet, and though my other industry (entertainment) does, it’s not to this degree we’ll see here. I’m excited!

Last night I stayed at the AMAZING Liberty hotel in Beacon Hill, which used to be a jail and is now a cool little luxe spot. It’s also the hot place to hang out in the city, which is a bonus. I went out for a little bit but was in bed early — 7:20am flights are a killer. I’ll post pictures if I can later.

7:00am  |   URL: http://patriciahandschiegel.tumblr.com/post/250850966/at-mit-today
(No. OF NOTES: 1)
  
November 19, 2009

Off To Boston

I’m off to Boston today for the MIT Futures of Entertainment 4 conference, which I posted about a few posts ago. I’ll be part of a talk on transmedia, or multiplatform content business, which is what my startup 9 does. It should be cool. My flight was at 7:20am this morning (gah) so I don’t know if I’ll attend all the cocktail stuff tonight. One thing I am so incredibly thankful for is Wifi on planes (and free Wifi even better) and Virgin America’s food, which is better than any other airline. I made a brunch with mimosas at seat 7A while I worked on client stuff and answered email. Who doesn’t love that? Monday I’m off to the Nor Cal, though that’s all play no work, at last.

9:55am  |   URL: http://patriciahandschiegel.tumblr.com/post/249824439/off-to-boston
(No. OF NOTES: 1)
  
November 18, 2009

How Not To Adapt To The Internet, By Media 2.0

If you want to watch how not to adapt to the internet platform, forget about the music industry. You can watch the media business completely blow it in real time. After nearly ten years of having to contend with the entry, then proliferation, of a new distribution platform (the internet), media business still continues to take the wrong approach. Has not one person in this industry actually taken the time to learn what the internet is, and more importantly, why it’s here? That would be a no. There are plenty of outward signs to show this. From its moguls to its experts, journalists and bloggers, this industry keeps showing signs that it has no idea what the internet is and what really to do about it.

Given this, here is its forecast for the future:

1. Ignorance and lack of knowledge will remain a key factor in why media business will continue to fail in adapting its business to the internet platform.

2. Loss will not be limited to newspapers. Print magazines are also vulnerable.

3. Print media outlets will fold, resulting in loss of jobs and displaced workers.

4. Fortunately, upstart internet media companies love to hire “real” journalists, often at higher salaries than most print media jobs.

5. The only downside of #4 is most internet companies don’t make enough money. Expect to eventually be laid off.

6. Efforts to “save print media” and adapting the business to the internet will fail because due to additional wrong approach.

7. At some point, the internet will force the media industry to adapt, pushing it to where it should and could have gone all along.

8. The industry will then finally move to its inevitable outcome: Digital

9. Slowly, the industry will return to its original position, but not before it takes a beating financially and otherwise due to #1.

Unfortunately, this will likely be a long and painful ride — five years, maybe longer. If its lucky, three, but I doubt it. I am happy to go into this further. Like so many other things, this outcome is preventable, even with all the industry has done wrong to mess things up. What should it be doing instead?

1. Educate itself about the internet platform. This is not Twitter, Facebook, social media, social news or any one site, but the underlying platform that supports it all. There are important clues to what’s ahead and when to be found here.

2. Stop talking about anything related to the internet until it completes #1.

3. Stop taking any action until it completes #1.

4. Once it knows what the internet is, what it is here to do and how much time it has, redesign strategy. A smart approach is focused on two things: 1. Creating an audience, particularly by migrating its existing customer base (print) to digital. 2. Charging for it.

Anybody who doesn’t charge people for a product is not a business. Media business is in the business to be a business. It needs to reintroduce this to its customers.

5. Ignore everybody around it, particularly 98% of what’s being talked about in the market. It either isn’t relevant, isn’t accurate or isn’t in line with what the internet is here to do as a platform. Business should always position as the flame and not the moth.

6. Focus on itself and what needs to be done.

The one and only thing that creates success on the internet, from Facebook to Google to your own site is BUILDING AN AUDIENCE. Without this, the media business will be at a disadvantage to large internet businesses as it is now. Second is knowing what the internet is and what it’s here to do. By doing so, the industry can see ahead enough to make plans and strategies to position. It should at all times know that in the future, it will be sharing ONE platform (the internet) with everybody else (TV, internet, etc.) and prepare accordingly as well.

Eventually everybody will come to this conclusion. Just watch.

8:49am  |   URL: http://patriciahandschiegel.tumblr.com/post/248589008/how-not-to-adapt-to-the-internet-by-media-2-0
November 17, 2009

Proof That Dreams Come True

As I mentioned a few posts ago, I’ve started working to use empowerment as a means to help people either stay away or move on from gangs. It probably seems random that I ended up on the front of this cause. What does a suburban girl who has never lived around violence or despair of this degree know about living in such a state of poverty, hurt and turmoil? Very little. But I do know that empowerment moves people and it can bring hope and results in even the hardest situations. I know first hand from nearly a decade of mentoring others that one of the biggest obstacles to achievement in life is a lack of knowing your options and a lack of understanding the steps it takes to get there. It’s not limited to the poor — I’ve seen it with rich and middle class people. So, here I am. I’ve begun working with an organization that has been so gracious and patient as I, someone who has had no exposure to gang life, learn about the experience and environment people are in to try to understand and help the need. Can showing people who have rarely seen options, or had the kind of hand-holding and direction we have had in life, create change? I don’t know but I’m going to believe.

It’s funny but I’ve had all the success I had hoped to have, and that at a pretty young age. I live in a nice place with the ability to afford things, eating at nice restaurants or staying in great hotels is a standard not a novelty. Some of the biggest luminaries and executives in business are friends of mine. Friends close to me would say that I’m one of the most connected people they know, I get to travel, etc. I feel very fortunate. What’s funny is that while I am thankful for all of it, it’s not what keeps me moving. Anybody can have stuff, success, travel, be connected, etc. Only some get to make a difference. I’m excited that might be me.

10:00am  |   URL: http://patriciahandschiegel.tumblr.com/post/247420554/proof-that-dreams-come-true
November 16, 2009

Only Fools Believe People Won't Pay For Things On The Internet

I have a confession. I have paid for content online, and I’ll continue to do it. This includes news.

I pay for access to the Los Angeles Business Journal’s articles because it’s required to and sometimes, I want to read one (especially if I am in it). I paid twice to be on fashion social networks. Yes, social networks. It was when they were called “message boards” but they were the exact same thing as Twitter, Facebook, etc. Once, I paid for a card reading on Tarot.com, because the email marketing campaign looked interesting. What did the tarot have to say about me? I can’t remember what it said, but I handed over the $6 to do it. I’d pay for the Wall Street Journal online. I even went through the steps of doing it once, but I got distracted. If WSJ marketed a little better, it’d probably get me to do it. I would pay for television on the internet if it were more comfortable to watch it. I’d pay for access to things that I want, like an annual fee to be part of something, a really great event, or even to watch a good talk with somebody like Hilary Clinton, providing it was useful. And yes I would pay for news — if the news is good. That means carefully researched, high quality writing and reporting. But I would do it.

What’s interesting is that I’m not alone. In fact, people are paying for things all around the internet, and have for nearly ten years. Roughly half the country is willing to pay for online news, which means we aren’t alone. But, somehow web/media 2.0 has come along and decided otherwise, even firmly working to ensure it. The weird thing is, subscription content has never been up to business to decide. It solely exists and survives by the choice of users. Imagine, then, how silly it must seem for an entire business market to not just make the choice for us, but also take the side of giving away its products and services. That’s today’s internet market. If you were to just glance over the history of subscription information, entertainment and services over any platform in our world, you’d see that users have always been the ultimate driving force behind it. It’s rare that anyone can force users to pay without option. When it can be done, it’s an access play which is different. Though even then users still have the ultimate choice, like deciding not to have a landline telephone. Subscription content also exists and survives by value. Companies that make little or no revenue rarely have the ability to provide high quality products and services. Decades of consumerism has proven that people will not just pay for something a little better but seek out to do it.

Where internet business has broken itself is in erroneously believing the opposite, then taking it a step further by working hard to ensure it becomes true. Yes, there are some people who won’t pay for products and services online but it was the same with radio, print media, broadcast TV and telephone platforms as well, and subscription business still existed. I know it’s trendy and even a little fun for media and blogs to say otherwise (prompting business to believe it), but it’ll be this way with the internet too.

8:22pm  |   URL: http://patriciahandschiegel.tumblr.com/post/246836999/only-fools-believe-people-wont-pay-for-things-on-the
November 15, 2009

Why Everybody Will Be Talking About Transmedia Soon

In 2004, I knew video on the internet would explode. When it did in 2005 and YouTube launched, I knew that user driven content would be hard to monetize though most people were still saying user driven content was it. Long before, I knew professional content would draw most of the ad revenue as it is today, and that TV shows via the web would start to slowly be adopted. The same can be said with lots of things related to the internet and platform business. If you’ve seen comments I’ve posted or talks I’ve had at events in the past, there’s a lot of reference to things that happened before they happened, often long before markets came to the conclusions as well.

The reason this is possible has little to do with me and everything to do with what I know about the internet is a platform, what it can do and where it is in the process. I spent almost my entire adult life in the part of the world that has been building it. Most people don’t know what an IP multimedia subsystem or a IP peering solution is. I do. I know just as intimately the mobile, broadcast TV, and PSTN telephone platforms from a technical and historical standpoint, but I’ll keep to just the internet for now. Today, I apply this knowledge and background in consumer facing internet, media and entertainment business with my startup 9 (launched in 2008), which builds projects for clients as well as our own in-house.

In my world, this is called “transmedia,” or the business of doing business over multiple platforms. It’s not a new or novel thing — film and game creators have been making transmedia things for a long time. But, because of the current state of market fragmentation in business, transmedia is being eyed as a solution. Earlier this year, Variety Magazine called it “the future of business,” and its seen nods from Forbes’ former CEO. Our communications platforms have always existed in set silos. The internet’s goal is to change this, replacing all with itself. As this migration continues, lines between markets are blurring. It’s created market fragmentation, lower barriers of entry and all kinds of other new issues businesses have to deal with. Until things snap into where they’re headed, transmedia’s a solution as it doesn’t recognize a world with just one platform. It knows how to reach audiences/customers/users/readers and do business over all. It’s also becoming harder to make money over just one platform, pushing companies to develop multiplatform models.

But forget for a minute that its a hot topic among top industry execs, starting to appear in media and blazing on speaking panels. Why signs point to this becoming a trend in mass business has nothing to do with any of it — It simply makes sense to what the internet is here to do and where we are all at with in the process. In the coming months, don’t be surprised for transmedia (or multiplatform approach) to become a topic not just among industry execs but PR practioners, marketers, and others in business. How did I know a year ago that this would come into play in the future as it is now? Easy: Everything you need to know about what’s ahead for the internet can be found by knowing what the internet is.

I’ll be speaking on a panel about transmedia content creation at the Futures of Entertainment 4 at MIT this Friday in Boston

7:22pm  |   URL: http://patriciahandschiegel.tumblr.com/post/245534699/why-everybody-will-be-talking-about-transmedia-soon