The evolving media landscape continues to transform at a rapid pace. Throughout 2011, expect more developments in the way entertainment is digitally distributed to consumers, more growth in capability for apps and social media, and more ways for users to participate in their entertainment experience. In no particular order, here is my annual list of 10 Top Trends to expect for the year.

1. Digital Entertainment Storage Soars to the Cloud

The rise of digital entertainment formats has created one practical issue for consumers: where do we store all those DVD and Blu-ray Discs? Or better yet, how much storage should we buy on devices (such as DVRs, iPods, slate computers) to carry our growing library of digital movies, TV programs and other content? "The cloud" now presents a way to solve storage problems and allow consumers to enjoy content on multiple devices with one purchase.

The cloud is most simply understood as the concept of having virtual servers available over the Internet. If consumers are allowed to access via Internet-enabled technologies converted files of their DVDs and Blu-Ray discs, or even material they purchase in digital form in the first instance, they could buy a movie or TV program just once and access the file in "the cloud" to stream, download or burn it onto a disc.

Content owners are increasingly open to permitting conversion and virtual storage of digital movie and TV episode files. Such conversion capability will likely be part of Ultraviolet—an online video distribution venture by a consortium of studios, technology companies, retailers, and online service providers—expected to hit the market in 2011. With a UV-certified digital file, consumers can share the file between UV-certified devices and also stream the content to web-enabled TVs, computers, and certain mobile devices.

Studios will undoubtedly begin selling UV-branded DVDs and Blu-ray discs packaged with "a copy in the cloud." Rather than having to themselves convert the disc into a digital file, consumers will already be purchasing a digital copy "in the cloud" which they can enjoy in any number of ways. They can gradually build a library of cloud-stored files, with both conversions of their existing discs and new digital files obtained going forward. Retailers could sell digital storage units and offer to convert your entire existing disc collection, so you receive a unit preloaded with all your current movies.

Ultraviolet will not be the only game in town. Apple has reportedly been in talks with film studios to permit consumers to store their iTunes-purchased movies in the cloud. This helps iTunes consumers, by freeing up more space on their PC hard drives (given the large data storage required for a feature-length film).

And while current news focuses on the potential for movies and TV programs being stored in the cloud, all forms of content— including music, photographs, social media pages—are ripe for being sent to virtual servers. In 2010, OnLive launched a cloud-based video game system and released its OnLive Game System microconsole last November. The system lets garners select and instantly play games on demand. At the 2011 CES trade show, On-Live announced a partnership to integrate its game service directly into Web-enabled Vizio HDTVs, as well as Vizio's tablet, phone, and Blu-Ray players. This will allow consumers to enjoy video games directly from their TV sets, without needing to buy a console, computer, or game packages.

Even more broadly, technology companies such as Microsoft and Sony are working on content-management systems which would allow consumers to centralize our digital files of all types. In fall 2010, Microsoft launched a service called Live Mesh, to provide consumers for free 5GB of storage. You can use the storage to store and sync digital files, photos, and videos in the cloud, and access them on any device. Sony's plans are more entertainment-focused. It is launching a video-on-demand service in Europe for home cinema, TV, Blu-Ray discs, and Windows laptops. Sony also has been experimenting with a monthly music subscription service (Music Unlimited), which allows users to share music from Sony devices and Windows laptops

Of course, there will be limitations. In particular, the UV service will have a "walled garden," meaning that UV-certified downloads will be playable only on devices permitted within the UV ecosystem. There will also be natural initial hesitance by some consumers to let go of having physical or local media storage. The concept of giving up your movies and TV programs to storage "in the sky" will take some acclimation.

Moving forward, the cloud movement could progress toward permitting consumers to stream movie and TV shows from the cloud to be viewed on any Web-enabled device. Whether the future of digital entertainment will give consumers that degree of flexibility remains to be seen. But in 2011, definitely look out for more of digital entertainment to soar into the cloud.

2. The Real-Time Web Gets Real

The Internet generation now wants instant gratification—information, news, and content on an instantaneous basis. This is now the lightning-fast world of the "real-time Web."

The demand for information as it happens has been fueled by the rise of social media applications like Facebook's newsfeed, Twitter's micro-blogging service, and even Foursquare's location check-in tool. Recognizing the importance of real-time information, Google has even incorporated real-time listings into its search engine results pages.

When Facebook's newsfeed was launched several years ago, some users rebelled against the notion of having a constant stream of updated information from their friends; how annoying it seemed at the time. But now, the Internet audience has been become conditioned, almost addicted, to getting news—from major world news events to mundane reports about where a friend checked in for lunch—in real time.

This trend towards real-time information will force traditional media companies to adapt. To continue attracting audience, news and entertainment outlets will need to provide more breaking news in real-time—through websites, RSS feeds, Facebook and Twitter posts, and other tools. Otherwise, they will lose eyeballs to social media where any layperson can break the news.

Media companies will also need to find new ways to integrate real-time Web functionality into their coverage of live events. Facebook has been partnering with television networks to offer combined coverage of major events like 2010 election night and entertainment awards shows. Sports events are another prime place for the real-time trend to take residence. Collaboration between social media and broadcasters can leverage a combination of broadcast/cable television, online live-stream coverage, and social media chatting to deliver a new form of audience experience.

Look for the real-time Web to continue growing in 2011.

3. Apps Make Consumer Electronic Devices Smarter

Apps are no longer just for our smartphones. What about Smart TVs? Samsung, Vizio, Panasonic, Sony, and other electronics manufacturers already have lines of broadband-connected "smart TVs." They allow users to connect to the Web to stream movies or television programs from NetFlix, Hulu, or other Internet means.

But the bigger new trend has free Web apps preloaded or at least available on the TV units. This allows consumers to more easily access social networks (such as Facebook and Twitter), on-demand news (from newspaper websites like USA Today) and entertainment, use Skype video calling from your television, and other features. In particular, Samsung's Internet-enabled televisions offer a large array of free apps.

Content owners will take advantage of this new app capability for TV sets. In December 2010, ESPN announced that its highly popular ScoreCenter app (which provides interactive, real-time scores and statistics of major sports) is available for download on Samsung's Internet-enabled televisions. No plans have been announced yet to make the app available on TV sets from other manufacturers, but expect that to happen down the road. And expect other TV networks and content producers to make apps available, and even specially designed, for Web-enabled televisions.

The television is just one of many consumer electronic devices which are about to get a whole lot smarter by supporting Web-connected apps. Blu-Ray players, DVRs and PVRs, gaming consoles, eReaders, digital picture frames, digital media players, digital cameras, and other devices will be on the bandwagon as well. In fact, a study released in late 2010 by market intelligence firm In-Stat predicts that the average American household will own 5 to 10 Web-enabled consumer electronic devices by 2014.

Apps transformed smartphones into devices that were used for more than just communication. Likewise, they will allow consumer electronic products to be used for more than their original purposes—and help centralize today's myriad forms of entertainment and information distribution.

In 2011, watch for apps to make more devices smarter.

4. In-Game Sports Experiences Go Digital

Fans of sports entertainment have always wanted to feel like they are in the game as much as possible—even if they are watching the game live in-stadium. Digital technology now increases the "in-game" experience—especially if you are stuck in nosebleed seats. What if you could view a sports game from angles you choose for instant replays, get live streaming of a game, receive game-analysis and data, or even find out how long the lines are for concessions or the restrooms in a stadium? All of that can now be possible.

One player in this space is FanVision, which sells a handheld device with a 4.3-inch screen to stream content from a digital channel. The device enables fans, while within a stadium, to view instant replays from multiple angles, video of out-of-town games, real-time stats from games, on-demand video, a cheerleader cam, and even the TV broadcast of the game. For football fans, it provides viewing of the NFL Red Zone channel, access to live fantasy football updates and highlight reels.

To date, 13 NFL teams, as well as the PGA and NASCAR, have adopted FanVision. FanVision is available within the stadiums of the subscribing NFL teams for $199 (although the MSRP is $259).

Another venture is Yinzcam, which tries to move the enhanced in-stadium experience to the smartphone arena. Unlike FanVision, which sells a specific device to stream its content, Yinzcam provides a mobile app for users to download to any smartphone. While in a stadium, Yinzcam allows fans to see sports games from unique camera angles, with multiperspective instant replays. Both inside and outside a sports game, the application also provides stats, scores, video-on-demand, and information about teams and players. The company was launched by Priva Narasirnhan, a professor of electrical and computer engineering at Carnegie Mellon University and avid Pittsburgh sports fan. She always wanted to be able to see replays from different angles than show on a JumboTron in-stadium or by the broadcasters on television.

Yinzcam's technology was piloted with the Pittsburgh Penguins for the 2008-2009 NHL season. It has since grown to be used with other sports teams, including the Pittsburgh Steelers (where the app provides instant action and replays from four unique camera angles). Notably, the application works on all major mobile platforms (including iPhone/iTouch, Android, Blackberry, Windows Mobile, Nokia, Samsung).

Some people question how much consumers want to watch portions of a game on a video screen they are already seeing live in-stadium. But FanVision and Yinzcam are on to something which will undoubtedly grow in 2011: the use of digital technologies to give sports fans more of what they want from games.

5. Group Buying Continues Its Rapid Growth

One of the hottest new trends on the Internet is group buying: the concept of offering a discount on products or services if a big enough group of people agree to buy. We've had social media; now call this social shopping. The phenomenon is in its relative infancy, beginning in earnest in 2008, but is already taking Internet commerce by storm.

Group buying provides a new way to attract local advertisers, one of the most important sources of online revenue. These advertisers like the ability to target customers in their local markets—based on criteria such as user interests, zip code, or even geotargeting of consumers using mobile devices based on how close they are to the local business.

Newspaper publishers like the concept too, and are partnering with group buying services. The services provide their technological application (often as a white-label solution). The newspapers provide two things: (1) their existing local advertiser base; and (2) their existing local sales force to market social shopping capability to those local advertisers. The newspapers then publish group discount offers on their websites. With revenue from print ads declining, digital group buying provides newspaper publishers a desperately needed new income stream.

The market leader is Groupon, but many more sites are nipping at its heels. These include BuyWithMe, YouSweep, ScoutMom, and LivingSocial, which recently received $175 million in funding from

You know an online trend is hot when Google wants to get in on the action. In 2010, Google tried to acquire Groupon and was rumored to have offered an eight-figure price. The acquisition did not take place, and many are wondering when Google will just swoop up a different group buying company.

In 2011, look for group buying to continue its rapid growth on the Internet. And look out for more investments into, and maybe acquisitions of, these emerging companies.

6. Location Check-In Picks Up Digital Real Estate

In 2010, users embraced the notion of using social media tools to "check in" and report their location. Using geo-location technology, smartphone apps identify where a user is at any point in time and allows users to report their location to their social network community. In 2011, expect location check-in to gain even more traction.

Location-based social media applications Foursquare and Gowalla really got the ball rolling. Foursquare (which operates more like a game) grew from 500,000 users in March 2010 to 5 million just 9 months later at year's end.

Meanwhile, Yelp launched a check-in function for its smart-phone apps, so check-in information can be displayed on its website alongside user reviews of local businesses. Yelp sees this feature as a way to add credibility to its user reviews (for example, so readers can see how many times a reviewer has actually been to a location) and as another way to engage users to interact with Yelp more easily than having to take time to write a review.

Social media king Facebook followed suit by introducing its "Places" function, which allows users to check-in. Once a user checks in, the location appears on the person's news feed. You can also "tag" friends who are at the same location with you. With its 500 million and growing friends, Facebook certainly has a strong advantage in the location check-in battles. But rather than actively trying to squelch out other location competitors, the Facebook Places feature actually grabs data through Foursquare, Yelp, and other geo-location services.

More competitors keep coming into the space. BlockChalk is an experimental service that provides digital chalkboards for users to communicate only with other people in their local neighborhood. Users can leave notes (as on a chalkboard) about what is happening at a particular place in the neighborhood. Anntenna is a mobile microlistings application. It permits people to engage in real-time short communication exchanges (like tweets on Twitter) with other people nearby, based upon a variation of classified listings that can be tagged.

The advantage for advertisers is the ability to target ads and offers to users who are currently at a site or have visited it before. Advertisers also get the advantage of users implicitly establishing the popularity of their businesses through repeat check-ins. This is especially valuable for local businesses.

But advertisers are now entering the fray themselves—developing their own check-in apps, rather than just advertising on existing check-in tools. For example, in December 2010, fast-food chain Carl's Jr. released a mobile app that features GPS-based check- ins. The advantage for customers to using the Carl's Jr. app: after you check in four times to a Carl's Jr. restaurant, you get to spin a "Wheel of Awesome" to win prizes. The goal, of course, is to encourage repeat visits to Carl's Jr. restaurants and to tell your friends you are a Carl's Jr. regular.

And municipalities are getting into the game as well. Cities are opening their infrastructure data to provide residents and visitors new ways to engage with their city. In New York, competition app BigApps was initiated by mayor Michael Bloomberg; it was inspired by the SFapps project for San Francisco. City agencies provide online data about the city infrastructure, and developers use that data to create their own location-based service and enter the service into a competition. For example, one developer created WayFinder, which helps people find the nearest subway station. In other countries, developers have used such public data to create apps for other functions—such as to photograph and geo-tag streets and public places that need repair.

All location check-in services will face scrutiny over privacy concerns—as people are naturally sensitive about who knows where they are at any given moment. Parents in particular will be concerned about their children revealing their whereabouts at any given time.

But the clear trend is to leverage the mobility of smartphones and geo-location technology to create more user-interactivity. In this world-on-the-go, location check-in is gobbling up more digital real estate every day. Expect that trend to continue in 2011.

7. Facebook Credits Elevate Battle for Virtual Currency Domination

Virtual currency is the "money" used to purchase goods, content and other material (digital and even real) in many online games, apps and worlds. The concept has been around for several years, but there is yet to be a standardized currency useable throughout multiple environments. (Think of the current digital economy as Europe before the Euro was introduced). Facebook is trying to change that by pushing out to more digital partners its system of Facebook Credits—which users can acquire to buy virtual goods in many games and apps available on the social media giant's platform.

Apple, Google, and PayPal have their own forms of microcurrency. But Facebook Credits work across many different applications, rather than being tethered to one specific app or utility. That, along with Facebook's reign as the world's largest social network, gives Facebook a distinct advantage in the battle to have the dominant virtual currency.

In 2010, Facebook began giving away free credits to gets users accustomed to the system. It also gave away credits for use in Zynga's popular casual games (such as Farmville) to further promote its virtual currency. Since then, Zynga has switched to using Facebook Credits as its micropayment system. It is being followed by other major developers who develop games for the Facebook platform. This will establish Facebook Credits (for the time being) as the dominant, if not "standard," virtual currency for social games.

Today, microcurrency is mostly used to acquire virtual goods within games. Annual sales of virtual goods are projected to reach $1.6 billion in the U.S., with half of that amount spent on social games (the majority of which happen on Facebook). But imagine a world where digital movies, television show episodes, music, and other forms of entertainment content are also purchased using virtual currency.

Virtual currency is also being bundled with purchases of items in the real world. TrialPay, the payment partner for Facebook Credits, has bundled offers for free Facebook Credits to go along with purchases from McAfee, Netflix, Domino's Pizza, The Wall Street Journal, and other companies. It is even awarding Facebook Credits to users who watch video advertisements (which would be most welcome by advertisers who want eyeballs on their online advertising) or register for services.

Of course, competitors want in on the action. That's because the credit providers (such as Facebook, Apple, and Google) take 30 percent of the revenue generated when users purchase the credits. Virtual currency is available within iOS and Android apps, but those systems are not as liquid as Facebook Credits. As for PayPal, it processes true money but cannot be used as easily to give away free credits for promotional purposes. As a result, Apple and Google may attempt to create their own more universal currency system like Facebook Credits.

Whatever happens, the battle to become the dominant virtual currency system will be significantly elevated in 2011. Look for Facebook Credits to lead the charge in 2011.

8. Image-Driven Social Networks Come Into Focus

Online social networks have been great vehicles for Internet users to share information about themselves. But what we really like are pictures (and videos). For 2011, a new trend will be increased focus on photographic images on social networks.

A clear indication of this is the November 2010 launch of Path, a new social network focused on photosharing. Path limits users to 50 friends to create a more intimate experience. The service allows you to upload photos and share such personal moments (via image) with your close friends and family. Because Path is encouraging users to share their most personal photos, it has tools for more tightly controlling which of your contacts see the images (in addition to limiting your friend list to SO people). Path resembles other mobile photosharing services Instagram and Picplz.

Not to be outdone on the image front, in December 2010, Facebook updated the layout of its profile pages to greater emphasize visuals and photos. In a blog post, Facebook announced the changes are meant to make it easier for users to tell their story—who they are, where they work, and the most important people in their lives. Now a Facebook profile page shows more photos of you (in a strip at the top of the page) and larger photos of your Facebook friends.

This trend will just continue to grow in 2011, as more social media companies find new ways to emphasize the images of our lives.

9. User-Created Animation Tools Get Real

For years, amateur filmmakers have used film and video cameras to make their own amateur motion pictures. In today's digital age, they create videos for YouTube and other online portals. What has been more difficult is amateur creation of animated films—given how time-consuming the animation process can be. But digital technology now provides tools for users to easily create their own (albeit more limited) forms of animated film.

One method is machinima, which derives from "machine cinema." It is the use of real-time graphics rendering engines (usually in 3D) to generate computer animation. Machinima most often uses graphics engines from videogames.

Machinimators use the video game's engines to create digital "actors" (often avatars from popular videogames like Halo), put them into scenes, and give them dialogue to speak. In short, users take advantage of the game's already existing graphic engine capabilities, and do not have to animate from scratch.

The practice has become so popular that machinima films are distributed now through the website and other centralized online sources. There are even machinima competitions. Machinima films have appeared on television, including on the BBC, MTV2, and G4 networks. Blizzard Entertainment helped to set part of "Make Love, Not Warcraft," an Emmy Award–winning 2006 episode of "South Park," in its massively multiplayer online role-playing game (MMORPG) World of Warcraft. In September 2007, HBO purchased broadcast rights to a machinima documentary, "Molotov Alva and His Search for the Creator," making it the first television network to buy a work created completely in a virtual world. In December 2008, signed 15 experienced television comedy writers to produce episodes for the site.

While machinima has been around for a while, it has really begun to take off in the past few years—and its presence will grow in the coming years.

However, machinima has been largely the domain of video game fans. One popular new service appealing more to the masses is Xtranormal (at Its self-proclaimed mission is to "bring movie-making to the people." The service turns "text to movie"—touting that if you can type, you can create a movie.

Users begin by selecting from a "stock" collection of animated characters (for scenes of either one or two "actors"). The animated characters can be somewhat customized. Users then type in dialogue and the virtual "actors" utter the dialogue in a computer-programmed voice (with deadpan delivery that is often used effectively as part of the humor). In this manner, Xtranormal allows users to turn a script of dialogue into a form of animated film.

In June 2010, a three-minute video really put Xtranormal on the map by poking fun at iPhone-obsessed people. Two Hello Kitty-looking characters argue about smartphones, in a monotone voice that is increasingly funny as the dialogue becomes increasingly foul-mouthed. Since its debut last June, on the day of the iPhone 4 launch, that video has been viewed more than 11 million times.

To date, over 9.3 million Xtranormal animated projects have been created, and many have spread virally across the Internet.

Because video content and humor attracts users on the Internet, user-created animation will continue to thrive. For 2011 and beyond, expect to see more machinima, Xtranormal videos, and other similar user animation across the Internet and in other media.

10. "Pay-to-Play" Games of Skill and Chance Begin to Go Digital

Internet gaming is of course nothing new. Online video games and especially casual games have really taken off in recent years. They have also progressively moved to smartphones and other mobile devices. But what if users could play online and mobile games by wagering money to win money? Many companies are seeing big dollar signs in the future from "pay-to-play" games of skill and chance placed onto digital platforms.

For some time, there have been Internet gambling websites operating, and they are big business. Those sites focus heavily on online poker and casino games. Due to uncertainty regarding Internet gambling's legality in the United States and enforcement actions by the U.S. government, Internet gaming operators are typically licensed, and operate in, various foreign locations. 'They have also tried measures such as offering a website that provides poker and other casino gaming for free, with links to true pay for-play gambling sites. But the approach does not altogether eliminate risk.

At first, land-based casino companies (such as Harrah's and MGM Grand's casino arm) were leery of Internet gambling—seeing it as a significant competitor. But seeing the opportunities for revenue expansion and to prepare for a day when Internet gaming may be regulated in the U.S., casino companies have even begun hiring former executives from foreign online gambling companies.

Meanwhile, some U.S.-based companies have been trying to find game applications and sites to take advantage of the public's obvious interest in winning prizes or money online, while staying clear of potential government liability. In one of the more rudimentary forms, there are already constant text-to-win sweepstakes done to promote TV shows. These have led to lawsuits about whether the sweepstakes violate state gambling laws. In 2008, the Georgia Supreme Court ruled that a text-to-win sweepstakes for the "Deal or No Deal" game show did not violate state gambling laws. The sweepstakes allowed consumers to enter with a text message from their mobile phone subject to a 99-cent charge. Class-action lawsuits have been filed against a number of other entertainment companies and even wireless carriers who enable such sweepstakes. While this is not as direct as online wagering for a game, it is an example of how entertainment companies and telecommunications carriers are looking to games of chance or skill as opportunities for revenue.

A more sophisticated emerging trend is a desire by companies to create pay-for-play versions from games classified as more games of skill rather than came of chance. (This is designed to avoid creating the impression of an illegal lottery or gambling because they are not games of chance). For example, Virgin Group recently got into the Internet video game tournament business, which is legal in all but 11 U.S. states because the video games are considered games of skill, not chance. The Virgin Gaming website allows console video game players the chance to win large cash prizes for beating others at well-known video games. Players on Virgin Group's website wager sums, described as "transactions" and "challenges" against one another, and not the house. The companies make money by taking service fees, a percentage of winnings off the top.

More companies are interested in creating pay-for-play or wagering versions of casual games playable on Facebook and other social media platforms. Imagine if you could bet and win money playing online Scrabble or casual games like Farmville? Or what if lotto, keno, and other lottery-type number-selection games (even state-sanctioned lottos and scratch-off games) could be played via computer or smartphone?

As for card games, the potential is enormous. Casual game powerhouse Zynga already has a slate of card games, including Zynga. Poker and a blackjack game, which are played for free. The Zynga "Texas HoldEm Poker" fan page on Facebook has over 4.3 million fans who "like" the page, and reports over 36 million monthly active users. It boasts that "Zynga Poker is the #1 poker game in the world." Imagine if one day casual game companies could take wagers from players on such online poker and card games. Add in slot machine and other casino games, and the revenue possibilities grow exponentially.

The line between what is considered a game of skill versus a game of chance is up for  debate. Traditionally, roulette, keno, and other similar games have been viewed as games of chance. Traditional console video games have been viewed as games of skill. Card games such as poker and blackjack have been the subject of much debate as to the level of skill versus chance involved, with their being some limited efforts to legalize online poker as a game of skill.

Given the current regulatory environment in the U.S, companies are reluctant to publicly announce any plans to operate online or mobile games of skill or chance that are "pay-to-play." But the buzz going around is that the future will bring more efforts by major businesses to monetize digital games of skill and even games of chance. In 2011, look for more developments in this digital gaming arena.