Money in New Media
June 8, 2008 – 8:27 pmOne of the big topics here is how to monetize new media. All the Broadcasters, Producers, and Developers are concerned about their ability to generate money from the investments they make into new media content creation. In order to sustain the flow of good content people need to be able to make a living while doing it.
The fundamental mantra in this industry is that you need to give your audience a good story and an engaging experience first, then the business mechanisms can generate a reliable and profitable return as a result. Those traditional mechanisms usually revolve around advertising and licensing the content to others, who can then charge for access or add advertising of their own.
New media challenges this traditional model. It’s not so automatic for a producer to create great content and have it become a financial success. It is not such a one-to-one relationship between number of people who see a story and the revenue generated.
One way this has changed is that broadcasters no longer have control over what viewers can access. For example, a broadcaster can purchase the rights to a show in Canada and make it pay-per-view only on television. But internet users can often download it, or watch it on a website hosted outside of Canada. The internet short circuits those barriers that traditional broadcasters use to control, and therefore monetize, access to content.
Another related example is film and the tight control studios have by making people go to a physical theatre, or buy a DVD that is locked, in order to ensure profit from the access people have to their stories. The internet enables piracy, particularly for film and music content, because the stories can be freed from these physical forms and be copied and distributed digitally. Unfortunately the mechanisms that return money to the content creators is also broken when this happens.
Ironically, there are some in the entertainment industry who have embraced this trend by making their digital content free and they report making more profit from live shows or other specialty content. There is the growing awareness that free can generate communities of fans and a deeper and more direct engagement between the artist and audience never before possible. This kind of relationship cultivation can then provide indirect methods of financial reward in merchandising, brand power, sponsorship, and other non-traditional means.
Other people who are primarily internet based content creators state that the best way to make money from new media is to give all their content away for free to as many people as possible, as easily as possible, because this is effectively advertising themselves. They make money because they acquire fame and reputation in a niche and become experts who are then consulted and get paid work from others who need their help. It is the epitome of self-promotion and can lead to may self-directed opportunities not possible in other models. For example, such self-made experts often have a lot of clout in online communities and, depending on the area of expertise, corporate sponsors are often willing to cooperate with and fund these people directly, thereby bypassing the other advertising channels in order to promote their products. And, the best part is that this direct sponsorship model is viewed by the internet audience as a more trustworthy source of promotion as compared to traditional advertising.
The big players in film and television tend to express a willingness to cautiously explore these new trends, but they are very reluctant to give up on the established financial models that have served the industry so well for so long. As a result there are many reports from new media content creators that they will get funding to develop a project only to see it flounder in the old distribution model, or tied up in limbo because it is seen as disruptive or competitive to other properties that are successful in the old model.
On the other hand, broadcasters have huge access to audiences in ways that are not possible in any other way. They also have developed a relationship with their audiences and are trusted to deliver a certain quality and style of content that the audience wants. Their brand is a powerful asset and broadcasters are very determined to maintain this brand relationship with audiences and extend it to be able to offer related story experiences in new media domains that still preserve the quality and characteristics they have become known for with their audience base.
The trick seems to be to offer broadcasters new media projects that complement their existing properties and provide a way to expand their audience engagement into these new domains made possible by the Internet. And if you can demonstrate that your project has the potential to leverage their established relationships with sponsors and advertisers — great — but if you rely too much on indirect monetization channels there is still some skepticism. But the bottom line is: does the new media project fit the style of their brand and their audience. If you can demonstrate that, you’ve got your foot in the door.