Between now and 2010 key media and entertainment trends will compel companies to open up access to content in more ways than ever. Successful companies will create leaner, more transparent organizations that cater to more platforms, more devices and more users wanting to edit, compile and share.

The closed and proprietary media and entertainment business models of the past will give way to open media business strategies, enabling forward-looking companies to exploit significant opportunities for growth and profitability.

Here’s a peek at that world:

Media pervade everything, everywhere. Technology just keeps getting better, smaller and cheaper – raising expectations and putting business models up for grabs.

Businesses and consumers in 2010 are unencumbered by wires and cables. Wall-sized screens displaying gigabytes of digital information let users wallow in scores of programs, sales presentations or work files spread out at once. Fans flock to the neighborhood movie theater to see digital Webcasts of world championship tournaments or Broadway shows in real time. Enthusiasts from around the globe spend hours together in real time, playing interactive online games that feature characters from pop songs, books or movies. They joust from hundreds of types of platforms, devices and networks, all served by the standardization of digital formatting and real time language translation.

Now more content is available in more formats than ever, and everybody wants something different from every piece of content. A university professor has videotaped his analysis of a news event and wants to intercut it into a primetime news broadcast downloaded for his classroom. Organized groups subscribe to an online service that provides profanity-free versions of top-selling music, books, films and other content. Online distribution and management systems track all rights and licensing by users, employing biometric identifiers tied to payment schemes (for large downloads) and subscription package fees (for less exclusive content).

Conglomerates, traditional studios and publishers are opening up their inventories, putting old and new digitized content online for variable fees. The same song costs more, or less, depending on complex variables such as age, sales tracking, promotional schemes or even the rarity of archival content. Customers can purchase and download a book configured for one or more types of devices; they can also order the film of the book, the soundtrack or only one song, the liner notes or a single quotation to use in a variety of formats, from a term paper to a wall poster. Millions of micropayments aggregate to a sizeable revenue stream from the sale of new or archived digital content, much of which never has to travel to a theater, retail store or TV station – it’s delivered online.

There are still powerful media brands, but even big conglomerates rely on outsource providers to handle just about everything that isn’t directly brand-related – production, sales and distribution, marketing and customer service – whether physical or online. Each conglomerate relies on a tightly focused stable of specialized businesses linked online around the globe on a need-to-know basis. Other companies have organized around their core media specialties, becoming best-in-class for a key service such as accounting and rights management, or a profitable creative activity like animation, production or publishing. With digital media and online links, specialist companies can serve clients in many locations.

Media companies survive or fail in 2010 based not just on creative content, but on creative intelligence – about customers, markets and the value of digital assets. In an era of “”pervasive media,”” users around the world are confidentially tracked for their opinions, preferences and tastes in media and entertainment – and data analysis helps companies determine asset potential. Open architectures and open business strategies let media businesses exploit rapidly developing niches, create new or aggregated revenue streams and customize open relationships with content creators, distributors, customers and consumers.

By 2010, there will be more tools in the hands of more creators, more digital content and easier transportability, bigger broadband pipes – and more competition for scarce consumer attention. Successful companies will resist the instinct to circle the wagons; instead they will open up the way they create content. They will open new ways to manage, store, catalog and break down content into product units. They will open up the distribution of content, the delivery and packaging and availability of content elements. They will build scale and reduce costs. And they will create open, reciprocal relationships with suppliers and customers, allowing more freedom in the ways they combine content and delivery.

We believe that this open media firm of the future will come to pass because of four key drivers:

• Emerging media environments

• Evolving consumer behaviors

• Ongoing technological innovation

• Increasing scarcity of consumer attention.

More immersive experiences and increasing technological sophistication are creating new media environments. Between now and 2010, improvements in digital technology and the battle for human attention will cause media consumption patterns to rapidly evolve. This evolution will push media firms to develop sophisticated systems for managing customer and consumer relationships.

Over time, as technology evolves and consumers’ wants and needs escalate, four media environments will emerge:

Traditional media represents the traditional contract between providers and users. It is a “”one-way street”” — media companies create and push content in a limited number of formats controlled by the distribution media toward passive audiences. Media companies build mass markets and own distribution systems to push content.

Multi-media finds an open field for technology dissolving these assumptions, introducing rapid, innovation-fueled growth in media and entertainment – multiplexes, DVD, Internet, cable, satellite and high-speed transmission, personal video recorders (PVRs) and satellite radio – and correspondingly diminishing shares of human attention.

Big media shows more interactivity between the media company and the consumer, such as channels and offerings within ISPs and Web portals, a wider range of content on DVDs versus videotapes, and data-gathering methods such as “”cookies,”” opt-in marketing or customer relationship management. But the underlying business models remain lodged in the analog era.

Pervasive media represents the coming era, where consumers and businesses are fully connected, immersed in media all the time. Businesses will be able to respond through online connectivity and deliver electronically at any hour around the clock. Many forms of media will be “”parallel processed”” – in use simultaneously – such as watching TV and e-mailing at the same time. Users will be inundated with choices.

Saul J. Berman is a partner and global executive in the strategy and change, media and entertainment practice at IBM Business Consulting Services.

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