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Nic Brisbourne’s view from London on venture capital and exploiting change in technology and media
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Creative destruction in the digital value chain

Started by brisbourne · 6 months ago

I’ve blogged this before with respect to music, but I have been struck again today by the thought that in the digital world many media industries will simply be much smaller than they have been before.
You can argue this from the price side - the wide availability of illegal free cop ... Continue reading »

4 comments

  • alan p

    8 months ago

    Nic, its a very interesting area - I've been doing a project on this for the last 2 months, am going to present some early findings at the Telco 2.0 Initiative on Tuesday. In short, I believe the "illega, free world is meium term unsustainable - but it is very unlikely that the Old Order becomes the New Order without fundamental change, for reasons you note above.

    What is interesting, in hulu and BBC iPlayer, is seeing how the Old Order in video is more interested in playing early compared to the music industry. Its also interesting looking at services like Phreadz, which can potentially be nodes around which a new order can coalesce.
    reply
  • James Penman

    8 months ago

    'many media industries will simply be much smaller than they have been' - with the publishing industry in mind, I think the opposite is true. Publishing houses and literary agents are about to get whacked, yes, but these are the guys who have been restricting both innovation and the supply of content to the market. There's going to be a lot more content and the opportunity to monetise the content of the publishing industry is phenomenal IMO. Very different to music, photos verticals etc. Certainly agree it's a promising area for startups.
    reply
  • Guy O

    8 months ago

    "And also from the cost side - in the internet era the cost of distribution is zero, so whereas previously the industry had to make a margin on the costs of physical production, transport and retail distribution of media that is no longer necessary."

    That is seriously inaccurate... who pays for the bandwidth to distribute the content, who pays for the storage to store it, who bears the cost of ingestion, who bears the cost of quality assurance, who merchandises it, who develops the recommendation algorythm etc?

    While I agree that digital distribution reduces the costs, they are NOT zero... plus if we constantly think about copyrighted content as somthing that should be distributed for free there will no longer be any incentives to produce it. I have heard people argue that music producers should make their money from concerts and live performances which is fine if you're Madonna or Coldplay but if you're starting out, you need music sales revenue. Also, most of Madonna's music is not actually written by her so without some sort of reveneue derived from the sale of master recordings, how will the composers make a living...
    reply
  • nic

    8 months ago

    Guys - tks for the comments and apologies I have been slow to respond.

    James - with regard to written content, my gut is that there will be a lot of long tail content produced, but that much of it will be monetised in ways other than advertising/cash - a bit like TheEquityKicker. I guess that means a view of whether the market has grown or shrunk will depend on what you measure, but by some measures you are right that there will be growth.

    Guy - you are of course right that bandwidth and storage costs will remain, and I am guilty of simplification in saying that they will be zero. Simplification, but probably not gross simplification. These costs are only a small fraction of physical distribution costs and they are trending towards zero over time.
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