The year of Re-Designing the Content Business

Another post from my co-author Gerd Leonhard.

“What are the new, web-native, social & inter-connected business models that will power the future of content creators and their industries?

In 2008, the disruptive force of the Internet finally hit home, and – as is usually the case – it all came much later than we had estimated but the disruption was also much bigger than expected. A quick look at some trends in this context:

* Newspaper revenues are seriously down (25% in some cases); and magazines and other print media are severely challenged, as well
* Digital music revenues are still going up, overall, but very very very far from enough to stop the free-fall of the recorded music industry, in general (approx 20%, globally, would be my estimate for 2008) *pennies for $$, see below
* DVD sales are declining, worldwide, prices are falling, too – and this will only accelerate next year
* Online video views and audiences are up a lot – but so far pretty much everybody has trouble making any real money with online video

“My hunch is that the Internet may well – and soon – bring us an utterly scary reduction of traditional content models that is somewhere in the neighborhood of 1:5, i.e. if you keep relying on the old ‘disconnected’ content revenues models you may eventually see only 1/5th of the financial returns that you had before. This could vary by industry, location and context, of course, but I would dare say that if you stick to your old models the future will be bleak, either way – and this goes for the actual creators but even much more so for the businesses that are build around them.

To me, the bottom line is that most of what used to work just fine in a disconnected world of ‘totally segregated consumers and producers’ will simply not work in the future.

This is why I think 2009 will be year of:

* Totally exploding consumer / user / fan / listener / viewer empowerment (yes, you ain’t seen nothing yet – wait until 2 Billion + people are wirelessly connected via increasingly smart and easy-to-use mobile devices)
* Re-inventing content commerce (such as: charge for access… not just units, bundle content into access, freemium etc)
* Re-evaluating copyright as that sacrosanct, sole, principal, or even main driver of revenue – the solution for what I like to call ‘digital payment-refusal’ aka piracy is not a technological issue but a business problem
* Re-inventing advertising (since new kinds of advertising will no doubt be one of the future drivers of content commerce, as well)
* Getting the telecoms and network operators aboard – for they can’t make it work without content, either!

I do have a hunch that this old Chinese proverb holds a part of the solution: “Tell me and I’ll forget; show me and I may remember; involve me and I’ll understand.”

Read the whole thing from Gerd Leonhard here.

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