HowTo: Making $$$ in the Web2.0 Verse

The new millennium presents a unique profit challenge to digital content makers but lessons from the recent past throw some light on the issue.

Having already been of age when the Internet was born, I was a witness to the vast changes that have taken place in the economics and trends that shape the information market today. Before making my way into the film biz I spent many successful years working in business development for the original digital content market. I started or participated in the start-up of over half a dozen Internet companies.  Back then we just called “digital content”,  software and before the explosion of the Internet it was expensive, proprietary and extremely valuable.  Here’s how this lesson directly applies to you.

Companies like IBM, Oracle, Apple and Microsoft (and many others that no longer exist) made billions of dollars selling their digital content (we called it a “product”) to corporations and individual customers like you. I’ll bet you have over 100 software “products” on your PCs and Macs right now, not to mention I-phones, Blackberrys and the like. All of it was produced by someone (or teams of someone’s) with one goal in mind. To make a profit. Even the so-called Open Source folks make a profit, albeit an emotional profit if not a financial one.

The funny thing is that most of the digital content producers today where barely out of their disposable, non sustainable, diapers just 10-15 years ago. Advances in technology have made the production of all sorts of digital content, fast, cheap and ubiquitous. The expansion of the Internet (now over 100 million users of broadband) can choose from hundreds of millions of digital sources and billions of individual pieces of content. Back in the day, the only way to “buy” and “distribute” digital content was via magnetic tape and later, by a physical diskette. People spoke of buying a physical copy of a movie, record or software product. Today, with the increased bandwidth and ease of distribution, the notion of “buying a copy” of some content is as antiquated as the mule train.

So how can we learn from the recent past? Just as the major software companies have learned to adapt and remain viable, we too can learn their tricks in the new age of digital overload.  As software “product” moved from discrete physical units (easy to sell and manage) to online, on demand versions (yes my newbies, we invented those terms), the business models changed from delivering discretely priced  “packages” to providing subscription and USAGE BASED MODELS modulated by time and or the total number of users.

Usage based pricing is not new but it is a very different species of animal from the “old-time”, product oriented way of thinking. The sooner the big boys in the film market understand this, the better off we all will be.  Like the music market before it, the film market benefited from a very simple principle. It was impossible to consume their “product” unless you either bought a copy (on some form of fixed medium) or you bought a ticket to some public but controlled performance of that content. By tightly controlling the “supply” they could charge anything the market would bear to meet our “demand”.

Today, with the vast majority of content being digitized, a producers ability to control supply is almost nil. Content can be copied and shared almost without restriction in any number of ways. Despite the “moral” and “legal” arguments against piracy and copy protection, the fact still remains, that if there is a way to copy/distribute content, it WILL be done in increasing volumes. In fact many of us , who grew up with the FREE Internet, actually believe it is our God given entitlement to do so.

At one point, “streaming” was a way to control and distribute digital content, but today you can buy (if you’re so inclined) a software product for less than $50 that allows you to rip any streamed content (video, audio etc.) off the Internet and store it as a compete executable file on your computer’s hard drive. In short, the more they try to “restrict” copying, the more some brilliant Techie will develop a way to get around it.

That being said, how do we recoup our investment of time, money and artistic effort in a universe where almost any type of content can be copied and distributed in a fraction of the time/cost needed to create it?

1) The first answer to this puzzle lies in quality. People will still pay for an experience and content they believe is great. Like the Japanese car companies learned, if you first make a better product, people will want to buy it; of course the price may be not what you’d be hoping for.  This is where ScreenPens can help with our indie filmmaker “HowTo”s.

2) Second, with literally millions of titles to choose from and virtually free access to any and all of it, the competition is enormous.  The economics class material you slept through in high school and college spells it all out. History tells us that when “supply” is huge, the price must go down to be viable. So after you make a great product, expect to sell it very inexpensively and or give a bit away for FREE. You’ll sell a lot, but you’ll make it on volume like any commodity.

3) Third, when a product  becomes a commodity, it will soon become obsolete or at least diluted by the thousands of other similar products on the open market. This means that the “value life” of your content will be measured in months and not years. While a few of these items may become favorites (like a book, film, music etc.) which you save and “consume” over and over, the truth is these will only be a small percentage of anyone’s library.  The demand for “New and Improved” will never go away, especially in the arts.  This is where “Branding” comes in.

4) Branding is the process by which a content producer imbues some unique character or quality to create a “Name” that becomes associated with your work. The great thing about a well crafted “brand” is that a) it’s almost impossible to copy and b) it’s easily protected by law and other forms of tracking. Look at some of the most successful film “Brands” we have today. KEVIN SMITH (Clerks, Chasing Amy ) has created a successful brand in the indie comedy world as “Hollywood Outcast”. His films are made to be viewed as “non conforming” yet we all know that he’s very successful. JAMES CAMERON (Terminator 2 , Titanic ) has created a brand as “Cutting Edge Technology”.  His films are expected to push the boundaries of the film experience. The COEN BROTHERS’ (Fargo, No Country for Old Men), brand is “Off beat and quirky” and so on. Even after all these years, ALFRED HITCHCOCK’s “brand” of filmmaking is often ripped, but has yet to be copied.  Find your special skill or capability and create a “Brand” around it. If you don’t have one, go back to making widgets.

5) Stay connected. A brand is only as good as its following. Make use of the tools at hand; the current and the newly developing technologies, to reach out and actively engage with your audience frequently and with style. Static websites gave way to interactive websites which evolved into Blogs which have been reinvented as instant Social Networking. With the digital technology becoming, cheaper and easier to use, EVERYONE will be creating content. You job will be to stay on the cutting edge, inventing new ways to reach out,  attract and sustain your audience.

Example: At the recent Hampton’s International Film Festival, ScreenPens’ field correspondent went among the vast throng of PIB’s (people in black) that swarmed the event, armed with nothing more than chutzpah and a BlackBerry Pearl 8110 Phone With that one piece of “equipment” we were able to shoot photos, record interviews, write articles, submit stories to the Blog site and stay connected with dozens of friends and “informants” at the event. The result was that the ScreenPens “brand” scored exclusive photos & stories that no one else could get. (consume them here)

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