Social media are beginning to impact on broadcasters who are now working out how best to respond to the likes of MySpace, Facebook and YouTube (see The Challenge from Social Media, World Vision No. 37).

While they are still wrestling with this problem, along comes another “disruptive technology” whose potential impact seems even harder to gauge: the brave new virtual world of Second Life.

According to some, it will mean the end of television as we know it. According to others, it’s an exciting new environment full of opportunity for the savvy broadcaster or content producer. Others still dismiss it as a fad that will die out within a few months.

But the very fact that media groups such as the BBC, Comcast and Sky are establishing a presence in Second Life – along with blue-chip players like IBM, Dell and Toyota – suggests that something important just might be going on here.

Avatars in a virtual world

It is far easier to get a feel for Second Life by playing with it than by reading a text description. It is essentially a computer-simulated environment modelled on the real world in which users can interact via “avatars” (a persona they create). Participants then use keyboard and mouse to navigate around the space and to communicate with others.

Within the virtual world, all kinds of activities take place, many of which are simulations of real-world activity – such as concerts, conferences and casinos. Users (known as “residents”) buy virtual real estate and create their own homes, offices, malls and other spaces in which they use a range of tools – including video – to relate to others.

There are two key reasons why Second Life (known as SL to its eight million –and rising – members) should be taken seriously by broadcasters.

First, it has the potential to take viewers away from the TV set into an environment that can be “sticky” to the point of addictive. For advertisers and broadcasters, time spent in a virtual world on the PC means precious eyeballs lost to television.

Second, SL is already establishing itself as a parallel economy and has its own system for micropayments. This is used largely by residents to buy and sell virtual goods and services (real estate, furniture, clothes for their avatars) but it provides broadcasters with opportunities for pay-per-view and other transactions.

Second Life has its own currency – the Linden dollar (named after creator Linden Labs) – which is convertible into real money (at a rate of around L$265 to $1). Exchanges between virtual and real dollars are now worth about $7 million per month and more than $2 million of real money changes hands every day between residents.

A sign of the potential importance of all this is that the US Congress is already looking at how to tax virtual-world income.

Threat or opportunity?

PA Consulting based in the UK was an early adopter of Second Life, where it has established a virtual office and conference center. Visitors are guided by an avatar (controlled by an outsourced person who is paid $1 an hour) and given presentations – in PowerPoint and video formats – about the company’s work. Virtual conferences have been held which participants say are often more effective and more interactive than the conventional sort (and which reduce travel time and costs, not to mention carbon emissions).

PA consultant Claus Nehmzow, who heads PA’s application of participatory media and virtual worlds, says that SL can offer two kinds of opportunity to broadcasters.

First, it is a new means of distributing content, reaching the viewers who are turning away from the television set. Second, it is a source of new content that can feed back into more traditional broadcast media.

Most importantly, he argues: “You should not see it as a standalone product. Virtual worlds,and participatory media in general, have to be seen as an integrated, linked part of a multichannel strategy.”

Media companies are so far only just beginning to dabble in Second Life. Comcast, the US cable operator, recently opened a theme park – cringingly named “Comcastic Island” – where users can visit a race track, jet ski or go to a concert.

Hangout for the tech-savvy young

The company sees SL as a place where “young tech-savvy consumers” hang out and believes that it needs to connect with this audience in the virtual world in order to reach them in the real one.

Nehmzow also says that the virtual world offers a shared, social and real-time environment where content can be consumed in new ways. For instance, people watching a concert on Comcastic Island can chat to their virtual neighbors about it in a way that is more intuitive and more like real life than, say, by combining a MySpace video with instant messaging.

The BBC, and its interactive arm BBCi, ever with an eye on the future, has launched a Second Life service for children and staged a concert which had an audience of 30,000 in real life in Dundee (Scotland) and, over a weekend, 6,000 visitors in Second Life.

News operations were among the first media companies to enter Second Life. Reuters offers news and live video streaming and Sky News has set up a virtual news room which shows how a television news room works and offers a platform for user-generated content.

The Second Life environment can also provide content producers with a test-bed for new program concepts.

With minimal investment, broadcasters can try out program ideas by using video within the site and engaging in real-time conversation with those who are watching. In this way, virtual worlds can provide useful focus groups.

Even if radically different forms of content consumption do not emerge within SL, there may still be brand-building value for companies to have a presence there.

A recent conference in Oxford held by the Economic and Social Research Council looked at how this technology might develop. Among the futurological visions outlined was one where markets within virtual worlds became more efficient than real markets and the Linden Dollar became a global exchange currency.

But it could equally turn out that Second Life is just a gimmicky flash in the pan that will have been forgotten as the Internet and media consumption evolve in a different way. “Some say it will be a nine-month wonder,” says Victor Keegan, technology columnist for The Guardian (London). “Others [say] that it will gradually take over much of the time we spend watching television and eventually become a major economy in its own right, generating jobs and income for millions.”

In that context, it would be a foolish broadcaster who does not put some time and investment into virtual worlds in order to gain a position should the format prove to be where the Internet is really headed.

Where have all the eyeballs gone?

Whether they are hanging out in Second Life, YouTube or MySpace, younger viewers are certainly deserting conventional broadcast television at an alarming rate.

Research by Ofcom, the UK communications regulator, shows that Internet-using 16- to 24-year-olds watch, on average, more than seven hours less television per week than the overall audience: 18 hours and 21 minutes per week, compared with 25 hours and 34 minutes.

Other research shows that people born between 1980 and 1985 watch four hours less television per week than those born earlier. And those born after 1985 watch eight hours less.

“The signs are that there is definitely a big shift from television to other devices and that there is a difference by generation,” says Rahul Chakkara, controller of BBCi. “The younger generation are consuming less television on the big television screen.”

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