In a world where most content can be found online for free, what’s the value of content to those who create, distribute, and own it?
Having spent significant time working in the record industry, I witnessed first-hand the contemporary destruction of a multi-billion dollar content business model. While there are a lot of other reasons for its collapse, it’s fair to say that without the digital technology explosion in the last decade the record business would not be as “done” as it is today.
Watching this decline play out again — rapidly with print and online video and creeping into television and film — it’s worth asking what the value of content is in an increasingly digital world? To consumers, the value is clear – content is incredibly valuable. Users consume more content now than ever before and more is available at their fingertips than ever imagined. Unfortunately for content creators and owners, with the exception of select specialized content consumers show little interest in paying for it. From YouTube to the Torrents and from The New York Times to P2P trading, free digital content is ubiquitous. As Bob Garfield points out in his AdAge column, “The audience doesn’t imagine that all cars want to be free, or that all toasters want to be free, or that all paper towels want to be free, but it somehow believes that all content wants to be free.” Why pay anything when you can get so much of it for free?
This is not good news for corporate media, content conglomerates, and studios who create and own large amounts of this content. The hope of digital revenues picking up slack is not happening while the value of their content decreases every day and their business model becomes less sustainable.
So does this mean content is becoming and will ultimately be worthless as a commodity? I don’t believe so. But I do believe it will become worth a lot less to those whose business has been built solely on the revenue stream of selling, licensing, and distributing content. That model is toast. I believe a new way of creating, funding, and owning content has already begun and is the model for the future. It is a future that is and will be run not by the traditional content businesses who are rarely equipped to deal with a completely new business model worldview but rather companies that are interested in using, creating, financing, and distributing content as a means to an end that has nothing to do with content. It is a future where content is a value-add. Where it is used to enhance and sell physical brands and products. Where it is used to shape brand perception and equity. Where it used to sell the non-digital tertiary businesses connected to content. Where content is created solely for the love of the content. Where content is created by large, crowdsourced groups. Where it is funded by patrons. Where the goal is not to sell the content but to use it for other purposes.
Some of these ideas are already being done. UK newspapers include free CDs from Sigur Ros and Prince to sell more papers. Corey Smith — an independent artist who earns over $4MM/year — gives away most of his music for free to help spread the word about his live shows and build a loyal fanbase. Webkinz gives away their virtual world memberships for free with the purchase of a new toy. Google and other advertisers fund Seth McFarlane’s comedy shorts. All realize the value and power of content and have figured out how to leverage it to sell something else.
Content is dead. Long live content.
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