Editorial march 2008
The changing face of content supply and making money from it.
We are now in the grip of a race - not necessarily for power though that competition there is never relenting. In the world of traded content, there is another battle going on. Every month there seems to be another conference somewhere in the corporate world where theoretical papers suggest strategies to win the war. Everywhere there is real fear that it may just be engaged in a struggle that is pulling us towards the edge of disaster.
What is this war? Technology is making content free but at the expense of possibly outdated notions of ownership. The fight is to monetise content...to make money from the stuff that is increasingly out there, being used but not necessarily traded, at least in the accepted sense of the word. For a business that has existed by buying and selling stills, music, audio, film footage, it has to be an odd idea that the basic principles are even open to question. But that is the extent of the point the technology is taking us towards.
There is the inevitable discussion of YouTube copyright abuses and the kind of DRM in movie downloads that allows users to view a film in a set time frame, but the underlying issues are churning deeper. As newspapers are dismantling their pay walls and TV startups like Joost are finding, there is so much choice around now for content, that the paid-for subscription economic model is no longer working; people are no longer prepared to pay for it, at least in the conventional way. This has profound implications for all kinds of content - from publicly funded TV channels to rock bands giving their albums out free. How it impacts on the micro-economy of those agencies that supply the outfits that supply the content to the outlets is hard to say but vital to consider. It is now increasingly easy to copy and manipulate all kinds of material from music to movies. The only protection for the people who create or make their living from this content, is flawed technical defences and legal recourse. Neither can adequately cope with the progress of the mashup culture.
One tactic being unrolled everywhere is the pre-roll insert ad. As systems develop to target with more sophistication the individual with their unique profile of needs and desires, the idea of embedding messages in every kind of content is no longer the far-fetched imaginings of the sci-fi scenario. The new reality of branding pieces of content is a direct result of the audience-fractured, advertising-averse world in which we now live. Now the brand needs to be a part of the content story. This points to tighter links between ad agencies and the creative community. Rather than paying for the production when it is virtually wrapped up, the agencies will be brought in as early in the creative process as possible, and given the opportunity to help shape the story narrative. The early days of sponsored "soap operas" on TV have given this kind of intertwining something of a bad name.
Empowered by broadband-led technologies, consumers are becoming choosier in their media consumption habits, with advertisers losing out and the content creators finding their budgets ever more squeezed as a result. With technology increasingly defining our lifestyles, this is a trend that will only intensify. The Oglivy agency has set up a unit solely to create, execute and manage the opportunities in branded entertainment. Broadband video's nascent development is unsteadily tottering towards effective monetisation mechanisms. The chance to experiment opens new possibilities that are much needed if the creative business is not to collapse. There will be elements like product-centric viral video initiatives, more product sponsored and conceived programming and more user-generated video contests around products. Viral video creation has a longer pedigree than YouTube, but when Chad Hurley and Steve Chen launched their visionary Flash-based video-sharing platform in early 2005, there’s no question that everything changed. For the user or the content creator, barriers to distribution have been dismantled.
The corporate takeover scene is showing the importance of these new channels. Yahoo acquiring Maven Networks while Microsoft makes a raid on Yahoo....headlines that reveal the need to increase the scale to compete with Google in the online advertising space. Search and display advertising monetises content that can be leveraged through what Microsoft CEO Steve Ballmer calls "emerging user experiences" by which he means video, mobile, online commerce, social media and social platforms. The concept of scale, being able to both reach large audiences and drive massive traffic from them, is essential for broadband video advertising establish its place within the marketing mix for big brands. Search-based advertising has been driven by long-tail advertisers, but broadband video advertising is driven by big brands that are shifting their spend from TV to broadband, as the availability of high quality, targeted video inventory grows. The outlets have to be able to offer advertisers greater reach and interactivity, reporting, social features, etc. This is the area Microsoft is aiming to reach in its attempts to take on Google and its YouTube market leader.
It is difficult to see how this big picture will have an impact on the secondary market where the content trade works, but there is little doubt it will. As suppliers put more content online, search engine optimisation is becoming the key marketing skill The fragmented clientbase needs to be able to find your offerings, even if they are feeding their products into the bigger pool of finished productions where different factors apply. Driving traffic to websites and increasing click-through on online advertising to produce income on whatever microscale is a fundamental to business success of all kinds. Content suppliers are no different in that respect....it could be that end user licensing revenues decline relative to these sources of potential income, hard as it is to imagine right now. Already, the need to be findable through consolidating portals is crucial. Cross syndication between big players is another indication of this trend. The network of suppliers is becoming a dense mesh where income distribution from the search is as important as licensing on the backend. All the quota rules from particular players, job minimums and attempts at editorial control by the producers contributing the content can only ultimately put a finger in the dam as the current runs decisively the way of the end user. Some of the more enlightened archive houses, music libraries and broadcasters have realised this; those that have not are going to have to wake up to the new realities of life online. If effective ways to monetise content at all levels are not found - and Google is pointing one way and blazing the trail at the same time - there will be no incentive to producing and trading content. Just as blogs are the fast food of the journalistic world, so YouTube cannot nourish an entire audiovisual culture, but that does not mean that these mechanisms have not stumbled upon the secret of making the whole game pay. As Lee Marvin says as he crashes around the corporate world he finds on release from Alcatraz in Point Blank, “someone’s gotta pay.” The problem comes when the gangster he’s turning over, explains he never carries cash. The world of content is now that poor confused soldier. It would not want to end up like the Marvin character, swimming in the bay, unsure whether alive or just a ghost of a previous world.
