Through the MCDM

November 10, 2009

Content and Time

Filed under: com597b — Tags: , , , , — captainchunk @ 7:27 pm

I like to try different styles of posts, so this week it will be a Q & A format.

Q. Will consumers pay a premium for content they have largely been getting for free?

Consumers will not pay a premium, but they may pay. Hulu has shown that with the right content, you can get the right audience. Hulu is fighting two sources of free, pirated content and televised content, of which, only one of those it can attempt to work with and control to an extent. The major problem Hulu has is that visual content has been linked to the television for many, many decades, and getting people to view the computer monitor/internet as a viable content delivery source will take time. Hulu’s greatest chance to monetize on a subscription based model is to make deals with cable providers and let people tack on a $10/month Hulu service. Obviously this is very difficult due to copyrights, content ownership, etc., but I think it really is the best way for them to make money.

Q. What do you think the impact will be on web-based storytelling’s economic model?

I don’t think the impact of Hulu and the monetization models it uses will have much immediate impact. The biggest factor in the economic model are children. If a child grows up with something, then it becomes the “norm.” If Hulu can find a way to make a subscription model work for the next 10 – 15 years, then I think they will have made a significant impact on the economic model of storytelling. Those kids will happily spend money to get content over the internet because they have always done it that way. Us old folks from the days of television and pirates, will remember how it used to be.

Q. Will this be the shot in the arm independent and entertainment producers need? Or will this commoditization of content commercialize the web beyond repair, cementing the uneven playing filed enjoyed by the big content creators?

The playing field will always be uneven, it’s just the nature of it. The indie stuff wouldn’t be indie if they had everything available to them that the major players have. To be honest, I wouldn’t want it any other way. That is one of the reasons that indie content differs from the mainstream stuff. I’m not sure that making money off the web will commercialize it beyond repair, but maybe it can help companies sell content to users. Just because I don’t want to pay money for content, doesn’t mean that other people don’t. Has iTunes commercialized it beyond repair?

Q. Is this the future, or just a lot of hand-wringing over nothing?

There is a future in making money off of content on the web. Advertising will play a role, as will features for power users, but the one thing that I don’t think has been utilized enough is time. Time is something Hulu and similar services have some control over. One of the reasons these services are successful is that people can view content whenever they choose. Netflix, right now, is trying to figure out something with movies studios in order to increase DVD sales of newly released movies.¬† The studios want to make Netflix wait 30 days before Netflix can mail out newly released movies in order to make people buy the DVD instead of renting it. Instead of Netflix agreeing to do this, why don’t they just charge customers more if they want the new stuff right away? They already charge me more for Blu Ray access. I think Hulu could do something similar. If you want the new content right away, you have the pay for it, but if you want catalog stuff, it is free, or a different price. There is a lot Hulu could do with immediate content, current season content, and past season content.

Content over the internet certainly is the future. Why do you think Netflix started a streaming service and has deals with Microsoft and Sony?

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October 13, 2009

Freeeeeeedommm

Filed under: com597b — Tags: , , , , , , — captainchunk @ 6:59 pm
This dude understood the economics of digital information

This dude understood the economics of digital information

I have yet to read Chris Anderson’s Free, but I’m familiar with the topic. I’ve read some of Gladwell’s books and essays, been to Godin’s blog a couple of times, and the same for Cuban’s blog. It is obvious that all of these individuals are intelligent and understand the digital landscape… they just happen to disagree as to what is beyond the horizon.

The fact is I agree with all of them on some points and disagree with all of them on others. Between their arguments lies the answer to the question, “what will the economy of digital goods look like in the future?” Both Anderson and Gladwell grab some case studies that highlight their points, which is a good idea, but the fact remains that you could find a case study to highlight nearly any point on the subject. So while it was useful, the examples held little weight with me.

I appreciated Cuban’s thoughts the most. I believe he is spot on in his suggestion to look to the music industry for guidence. It has been dealing with the problem of “free” for longer than any other media industry. He says the music industry wields “free” as a weapon of commerce, and I agree with him, but I’d add that the music industry needs to take it much, much further than they have. Trent Reznor understands this better than anybody in the music business. He knows how to make money off of his fans and he knows how to give them the free stuff they want. Follow him and he will lead you to the land of business model salvation.

I believe the issue of free comes down to the simple fact that in order to make money, you have to produce something that nobody else is producing. If you can do that, you can make money. What is hard is creating that unique voice and getting people to notice. There is nothing easy about the “free” problem, but as Godin said, the world will morph to fit the solution.

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