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Online media and publication is going through a metamorphosis. Any discussion that starts with an understatement, such as this one, can only get better, so read on! The business model of publishing has been pretty stable for generations. At a high level of generalization, it is not different from the business model of product manufacturers. The product in this case is content such as a book or article or sitcom or song and the distribution channel is print or TV or radio or the internet etc. Content is created and distributed using - one or more – medium or channel. The three key players in this value chain made money differently and in different proportions:
- Content creators made money by “selling” it to the distributor. They got a price per piece that is usually a small fraction of the “price” the customer pays. If the sales agreement allowed, they “owned” the content and could distribute it through multiple distributors. The latter is known as syndication.
- Distributors provided a channel to get the content to the end customer – John Q. Public. They made money through a sale price – such as in books or magazine sales – and/or through the advertising – such as in broadcast news. Distributors owned the distribution medium or syndicated content to partner networks
This model has its limitations - primarily in scale but also in scale driven selection. A given author can generate a limited amount of content. A distribution channel has limited capacity and reach. Consequently, distributors selected content that would produce the highest revenues i.e. “more copies sold” - “more eyeballs” - has been the mantra for publishing. So Robert Ludlum got published and Joe Bloe didn’t. Ray Romano got a show and Jane Doe didn’t. This model is also not interactive – i.e. a book is read but cannot be commented on. In another article, we discuss the changes in this paradigm so we will not devote much time to it in this one. The internet changed all this. The scale is unlimited – 10 million websites and counting. The selection is unlimited – 6 billion authors and counting. The distribution is now a discussion i.e. it is interactive. Inquiring minds are just not satisfied knowing; they want to participate. Well, this shift has some really good news and bad news. Tradition publishing is going the way of traditional travel agency. The good news is that if one is willing, then there are even more profitable business models – imaging the ability to have 6 billion authors creating content and providing it to, say, 6 billion customers! First there was blogging. Then there was wiki. Then came Youtube.com. Well, video blogging is here and will be a force to recon with. Traditional publishers better take note of this “user created content” phenomenon because O’ Riley is about to be replaced with Ze’ Frank! Read more>>