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Sketching revenue generation for distributed media

Not the snappiest of titles and this isn’t the most lucid of posts, it’s more a half-baked brain dump. Never-mind.  So, of late I’ve been trying to articulate what the new media landscape looks like and how it ‘works’, to a largely lay audience.  It’s hard to convey complex things simply which is perhaps why I’ve found it a useful experience – it’s forced me to think.  I often use drawings to get a point across and below are two [god-awful] and polarised examples from a recent chat I had which will look very familiar.

Broadcast:

Broadcast

Here:

  • The value is intrinsic to the media itself e.g. a TV programme and there’s a simple general revenue model for it to work [subscription or ads – based on viewing figures proxied by time of day etc.]
  • The rights framework is built with that in mind, the rights holders paid for their bit of the media etc. and if the distributor cannot control supply through the medium e.g. decoder then the media must be controlled e.g. DRM
  • The primary constraint here is limited supply.  The legal and political framework only allow for a small number of ‘broadcasters’ and to get involved in that is expensive and risky and consequently the barriers to entry are high.
  • Any ‘sociality’ around the media is defined by either ‘locally’ produced feedback loops around say the [cliched] water cooler or, more abstractly, as a feedback loop through the media, in say TV guides or reviews.

Networked:

Web

Here the:

  • Media value is increasingly defined through the ‘sociality’ of the media itself, that is the ‘links’ that serve to define it in the ecosystem, rather than in the asset itself.
  • Consequently value is distributed with the media [which is the case in the broadcast model only in the broadcast model that was pretty much everyone or everyone divided by x]
  • The feedback loops are key in defining the value of the media and these loops are not constrained by space or place but play out through them – so you get feedback in the form of recommendation systems that are very public.
  • Nor are these feedback loops constrained by time and the physical limitations in the broadcast model.  The loops are ‘immediate’ and are on the whole very ‘transferable’, contained within URLs or even in chat histories via AIM etc.   
  • Neither are the feedback loops defined by formal hierarchy – informal [digg] mixes with formal, organised feedback [metacritic] as defined by the status of the reviewer.
  • Advertising is the main means through which to generate revenue but this revenue may not fall to the media creator / owner as the media is copied, distributed and published elsewhere.
  • Policing this environment is virtually impossible although community driven ‘social  policing’  through  individual reporting can be highly effective.

Of course trhese are two polarised ideals and the reality [at present, before IPTV] is we live with a mix – with some media being bigger than others, or at least more social or popular.  But what I’m getting at is that value is driven by the ‘ghost-like’ relations of links, by the ‘communicative morass’ rather than the media itself.  Blogs, AIM have their own place in that mix that can be defined by speed and fixity.  Blog and link aggregators are the nodes, akin to the FTSE, there to be gamed and played once measured.   AIM, txt, the more intricate, ‘local’ and immediate narrative that is often ephermeral, disappearing as quickly as it came but no less important for that.  Services like Twitter and Dodgeball only serve to facilitate and play on this communicative need.  And as more metadata, links, and  narratives come into existence so media must adapt to play out with them in the form of feedback loops.

However, many people I speak to who are involved in media production are still fixated on the media itself, which of course has to be brilliant but  is just part of the ‘design’ for creating successful genuinely ‘new media’ that pays.  The audience are now more integral than ever to the proposition and how it plays out.  Steven B Johnson sums this up in Emergence from 1991:

"The most significant thing for the web.. is not its capacity to stream high-quality video images or booming surround sound; indeed, it’s quite possible that the actual content of the convergence will arrive via some other transmission platform.  Instead, the web will contribute the metadata that enables these clusters to self-organize. it will be the central warehouse and marketplace for all our patterns of mediated behaviour, and instead of those patterns being restricted to the invisible gaze of Madison Avenue and TRW, consumers will be able to tap into that pool themselves to create communal maps of all the entertainment and data available online." [Steven Berlin Johnson 1991 Emergence p220].

All pretty basic stuff now but quiet prescient all the same and ahead of its time.  In talking through the implications of this nascent ecosystem to indies etc. they inevitably want to know how they can evolve to remain relevant to audiences that are increasingly getting recommendations and media itself [youtube, torrent files etc] from the web.  The basic question for such companies is: "how can we retain or maintain revenue from media when it’s massively distributed?". I’m not sure that anyone who owns IP in the digital age knows the answer to this.  But I’m not sure that there is an answer.  Media that is IP protected will struggle to be social in a networked
ecosystem.  And if it ain’t social then you’re going to have problems
getting it noticed and making money from it.  No, you have to move from a model whereby the media itself is intrinsically of value to a model where you use the social to develop new business models.  Easy stuf, for example:

  • Translate. Get people to pay for transferring one media into another.  Just like printing has become a winner for static media e.g. moo for flickr and blurb for blogs, so ring-tones and paid for podcasts etc. have worked for exploiting traditional media.
  • Relate. Start to create metadata around the media which can be used to drive discovery [e.g. delicious] and consequently ad revenue.  Then own that data.

Works within the existing framework, exploiting essentially dead media, like any artefact or product.  Packaged dead media in the form of formats like Wife Swap and Super Nanny are still the most lucrative [because they are ‘transportable’ and ‘transferable’ assets] but it is precisely their ‘dead’ nature that limits their potential in the networked digital world of the future. Going forward networked digital distribution allows is to give media life – to make it  inherently social by developing feedback loops or ‘ripples’ and therefore creating more opportunities to spin off into other [older] media [translation], or initiate subscription for extra functionality around a service and of course drive advertising into new areas.  To produce more social media, you need to get people [both end consumers and developers / producers] involved in creating or augmenting media in the first place and to play with the variety of things that influence the media such as links, metadata and narrative.

Enough waffle, I’m going to try and knock this into something meaningful soon.

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