The (media) democracy that never was
http://blog.marcellus.tv/2008/10/24/the-media-democracy-that-never-was/
When Time Magazine nominated You as the person of the year in 2006, the notion that resonated was that YouTube had methodically deconstructed every notion we had about content production, consumption and distribution.

We now had the tools to create and express ourselves freely(Blogger/YouTube), the ubiquity that made content accessible(broadband internet/RSS feeds/device independence), and the ability to distribute content at a very micro-level, enabling levels of individualization that has never before been possible.

Lev Grossman aptly said: "It’s about the many wresting power from the few and helping one another for nothing and how that will not only change the world, but also change the way the world changes."

In December 1996, exactly a decade before Time came up with this brilliant feature, Alan Greenspan made a comment in reference to the stock market boom of the 1990s. He said: "But how do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions as they have in Japan over the past decade?"

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Fast forward to 2008, skipping through the revolution that YouTube has brought about. Try to ignore the fact that Greenspan was proved right during the dot-com bust, and focus on the fact that he is about to proved right, once again.

In 2001, we didn’t really have broadband, there was a player war where even Real Player could hold their ground, and content delivery was expensive. Companies like Vingage could charge you $50,000 for content management, encoding and delivery...AND still call themselves inexpensive. They’re dead now, because folks like us can now offer the same at $49 + $10/month.

You see, today, we have broadband, we have Flash, and we have cloud infrastructure.

Effectively, we have the all the basics in place, and in theory, online media business models should be thriving at this point. We should be seeing a truck-load of very imaginative models taking full advantage of this unique position we are in.

In 2007, YouTube alone consumed as much bandwidth as the entire Internet did in 2001. There’s your demand.

By the time I’m done writing this post, there will be an additional 50 hours of video content, if not more, up on YouTube. There’s your supply.

It’s obvious that media content production and consumption on the Internet has grown phenomenally, and Lev Grossman was spot on: YOU are responsible for this phenomenon.

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But something’s obviously gone wrong. Online media business models today are a joke...merely glorified(and fine-tuned for style) versions of old media business models.

Of course, advertisers are seeing declining returns(if I can get a lower-rez, ads-free version of SNL on YouTube, then I’m going to YouTube. Period.) and we’re having to choose between charging people money for premium content, or improvising on the placement of ads.
Hulu has effectively put to rest the first option: people are now going to think four times before trying to charge their viewers for premium content.
And sure...toying with ad formats and placement might help, but that’d only delay the misery.

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So what’s the problem? The problem is that we’ve ignored distribution.

We’ve understood that there’s a lot of production, so we need platforms.

We’ve understood that there’s a lot of consumption, so we need infrastructure.

But we’ve forgotten all about distribution. There are no real answers (or even questions, for that matter) about what next-gen distribution is going to mean.

The way we see it, even the best folks out there building online video platforms(from Jeremy Allaire to Chad Hurley) understand the Internet and they understand video.

But in their quest to get video on the Internet, they have forgotten about the importance of the same people who made LonelyGirl15 an online phenomenon. Yes, they have forgotten about YOU.

* You form a critical piece in the new media value chain, and your importance has been mis-interpreted...under-rated.

* Yes, you are the producers, and the consumers, but you are also the new distributors. You are the new medium, not the 480 x 360 Flash player.

* You drive traffic. Heck, you ARE the traffic.

* Your interactions and involvement determines how much money an advertiser will pay for an ad spot.

* You represent the soul of the media democracy- the democracy that never was, because you have been looked upon as audiences, not participants.

Please don’t get all worked up. I’m sure Allaire and Hurley meant well. In fact, I know they meant well. Brightcove and YouTube are products of love, and their success speaks to their intent.

But, if we can set aside our (irrational) exuberance for a second, and look at the business of online video objectively, it’s clear that no business can succeed without an effective distribution strategy, no matter how wonderful the surrounding economics are.

My pitch on TechCrunch talked about a $1.75 in infrastructure costs bringing in $4.00 in ad revenues, but I also said that I’m not going to B.S. you..that you’d still have to go out there and distribute your content(.."market your site") for the economics to make any sense.

So here’s the challenge we want to tackle: go out there and construct a viable model for new media distribution that places due importance on the distributor:YOU.

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Thanks for reading. I’ll look forward to your thoughts.

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