Saturday, June 6, 2009

Market Value of Content Hard to Assess

There are new untried ways to make money with moving pictures with synchronized sound, and lots of other ways it's currently being done, but I think who pays for the means of distribution and how is interesting and worth noticing. Substitute "moving pictures with synchronized sound" for "journalism" in this quote and interesting ideas form.

So long as our information economy treats journalism as overhead, valuable only as advertising-bait, then our economy will be glutted with free, low-value journalism. We won't be able to study specific indications of value - in terms of price or quality - so long as it's produced as a subsidized commodity. The Web merely revealed that truth

(from The fire that frees the seed).

Various forms of infrastructure are needed for video/film/TV distribution, for example:

  • physical DVDs and shipping
  • movie theatres and their films which can cost >$30,000.00 per print
  • cables/wires/wireless systems that carry the internet to you
  • etc.

The costs of the moving picture distribution infrastructure are covered directly and indirectly in different ways.

  • Movies in theatres can have the physical reels of film paid for by the distribution company which often affords to pay for the prints by getting a part of the box office receipts (charging the viewer directly). The final stages of distribution, like the projector and screen/speakers, are paid for by the exhibitors that get part of the box office but make most of their money through concessions (candy, popcorn, drinks).
  • Broadcast television through the air has its first stages of distribution paid for in the early stages by the station (transmitter and licensing fees) which it sells ads to pay for. The final stage, as with online video, is a viewing device usually owned by the viewer.
  • Video uploaded online, say to YouTube, has its hosting and first stages of distribution paid for by a web site (an internet company) like Google, which often sells ads to make the money to afford do so. The final stages are covered by the telecommunication companies (which charge the viewer) and finally the display device which is usually owned by the viewer.
  • On-Demand, be it iTunes-like or through a cable or satellite company, is paid for by charging the viewer directly.

This is not a complete list. All of these models can change, with the last two changing most quickly today (internet ad supported and on-demand).

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