Video and media companies are eager not to repeat the past mistakes of Napster, while also keeping content creators happy, according to Contentinople's publisher.

Thomas Claburn, Editor at Large, Enterprise Mobility

October 6, 2008

2 Min Read

As if the worldwide economic turmoil weren't unsettling enough, media companies have to worry about whether they will survive in the Internet age.

"We're entering a new digital age and the economics of content are changing," said Contentinople publisher Scott Raynovich, at the Contentonomics conference in Los Angeles on Monday.

Since the early '90s, it has been clear that the Internet would change things for anyone creating content, but only in the past few years, with the rise of video-sharing platforms like YouTube and with broadband connections reaching a critical mass, has the magnitude of the change become apparent.

Napster, in its illegal form, was the shot across the bow of traditional media companies, and those outside the music industry watched with a mixture of horror and fascination as online music distribution fell under the control of technology companies like Apple.

Now the same thing is happening to video, and media companies are eager not to repeat past mistakes.

"If you go up to Silicon Valley and ask people about Apple, they'll get excited about the technology," said Raynovich. "Around here [in Los Angeles], you'll get a completely different option. The Steve Jobs business model has just cut the content guys out of the loop."

And if the content creators aren't happy, Raynovich insisted, "Something's wrong."

Finding what's right, finding an Internet-based business model that works for all concerned, isn't easy. It takes time and experimentation, perhaps even re-invention.

"There's this notion on the Internet that you just throw [stuff] up and start making money," said Raynovich. "There's a lot of craft and refinement of the art before you can cash in."

While instant gratification -- which is to say profitability -- may be desirable for publicly traded media companies, the Internet isn't yet a mature distribution platform. The audience is there but the ad dollars aren't. As Raynovich pointed out, people already spend as much time online as they do watching TV, yet only 10% of media spending goes online, compared with 35% on TV.

"This has to change," said Raynovich. "It's going to change. More money is going to flow into this space and support the people who have moved there."

As the money flows, content makers will adapt. But, Raynovich argued, better metrics and better technology are needed to create a healthy ecosystem. The alternative, where content companies continue to be squeezed, is a dead zone for content.

"Where's the content going to come from?" asked Raynovich. "I hope it's not all going to come from some goofball in his dorm room."

To read more about Contentonomics, go to Contentinople.com.

About the Author(s)

Thomas Claburn

Editor at Large, Enterprise Mobility

Thomas Claburn has been writing about business and technology since 1996, for publications such as New Architect, PC Computing, InformationWeek, Salon, Wired, and Ziff Davis Smart Business. Before that, he worked in film and television, having earned a not particularly useful master's degree in film production. He wrote the original treatment for 3DO's Killing Time, a short story that appeared in On Spec, and the screenplay for an independent film called The Hanged Man, which he would later direct. He's the author of a science fiction novel, Reflecting Fires, and a sadly neglected blog, Lot 49. His iPhone game, Blocfall, is available through the iTunes App Store. His wife is a talented jazz singer; he does not sing, which is for the best.

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