If you’re thinking of sustainable business models for the future then it comes down to something very simple. Either (i) you arrange that your online revenues exceed the costs of creating content; or (ii) you reduce your costs to the point where they’re lower than revenues.
There: that wasn’t hard, was it?
The thought was prompted by a typically insightful post by Clay Shirky. “About 15 years ago”, he writes,
the supply part of media’s supply-and-demand curve went parabolic, with a predictably inverse effect on price. Since then, a battalion of media elites have lined up to declare that exactly the opposite thing will start happening any day now.
To pick a couple of examples more or less at random, last year Barry Diller of IAC said, of content available on the web, “It is not free, and is not going to be,” Steve Brill of Journalism Online said that users “just need to get back into the habit of doing so [paying for content] online”, and Rupert Murdoch of News Corp said “Web users will have to pay for what they watch and use.”
Diller, Brill, and Murdoch seem be stating a simple fact—we will have to pay them—but this fact is not in fact a fact. Instead, it is a choice, one its proponents often decline to spell out in full, because, spelled out in full, it would read something like this:
“Web users will have to pay for what they watch and use, or else we will have to stop making content in the costly and complex way we have grown accustomed to making it. And we don’t know how to do that.”
Yep. Shirky’s post was prompted by an inquiry from TV executives about how they would make money in the future.
Some video still has to be complex to be valuable, but the logic of the old media ecoystem, where video had to be complex simply to be video, is broken. Expensive bits of video made in complex ways now compete with cheap bits made in simple ways. “Charlie Bit My Finger” [a YouTube video which, to date, has had over 176 million viewers] was made by amateurs, in one take, with a lousy camera. No professionals were involved in selecting or editing or distributing it. Not one dime changed hands anywhere between creator, host, and viewers. A world where that is the kind of thing that just happens from time to time is a world where complexity is neither an absolute requirement nor an automatic advantage.
When ecosystems change and inflexible institutions collapse, their members disperse, abandoning old beliefs, trying new things, making their living in different ways than they used to. It’s easy to see the ways in which collapse to simplicity wrecks the glories of old. But there is one compensating advantage for the people who escape the old system: when the ecosystem stops rewarding complexity, it is the people who figure out how to work simply in the present, rather than the people who mastered the complexities of the past, who get to say what happens in the future.
Much of the problem with the current debate about all this is that people who have prospered (or been conditioned in) the old ecosystem just cannot imagine things being radically different from the way they used to be. And of course they are (understandably) distressed by the thought that some of the good/great things enabled by the old ecosystem might disappear (which they will). But that’s creative destruction for you.
LATER: We all (me included) use the term “content” too casually. The old publishing industries think that content is what they produce, which is why the concept of user-generated content is — to them — an oxymoron. But — as Jeff Jarvis points out here — ‘content’ is what everyone produces all the time: as email messages, tweets and, yea, even blog posts.