(This post is cross-posted from Notes From the Vine, our company blog over at PlaceVine as it is a topic of both personal and professional interest)
Over the past decade, declaring the death of “content as king” has become quite fashionable. Andrew Odlyzko seems to have started the trend in earnest with his January 2001 First Monday article entitled, “Content is Not King”. This week Lehman Brothers analyst Anthony DiClemente jumped on the bandwagon. In discussing structural changes in the film and TV content businesses, DiClemente went back to the well and prophisized that “content may no longer be king in the entertainment business“.
In my opinion, these declarations are sensationalist and off the mark.
Will the tectonic changes in distribution set in motion by digital infrastructure change the economics and structure of the content business? Certainly.
Will quality content (great stories performed by great talent) still be the defining asset of the winners in this shake-out? Absolutely.
DiClemente states that “distribution giants Apple and Google seem to prove time and time again” that content is dying. Yet 48 hours later the Wall Street Journal was reporting on the significant challenges that Google is having monetizing content on YouTube. With reports that YouTube is only able to sell advertising against 4% of its entire universe of content, and Google sales head Tim Armstrong attempting to fix the “105 problems with YouTube’s ad sales”, all does not seem so rosy in the land of DiClemente’s heir apparents.
Our old king, Content, seems to get another boost from an upcoming study by The Diffusion Group. As reported by NewTeeVee…
“User-generated video will account for 42 percent of streams this year, but only 4 percent of online video revenue… Conversely, professional online video will account for 58 percent of streams and 96 percent of revenue.”
Advertisers and media buyers, who in many ways hold the keys to the kingdom via ad support, seem, at least for the foreseeable future, content (no pun intended) with the current monarch. That said, there will be no lavish feasts in the castle. To borrow another old adage, it may no longer be “good to be king”.
The economics of the content kingdom will shrink and will be marginally more distributed. The recent writer’s strike and current SAG negotiations are just one piece of evidence that there is strife amidst the royal family. The ability to produce great content with lower production costs means that more great talent may able to finance and monetize content independently. New technology means that great content may be developed in a multitude of forms and with new degrees of interactivity.
Regardless, great content is still what will attract viewers. No amount of wrangling in the kingdom will leave viewers happy to watch poor content just because its broadcast on an IPTV or an iPhone. Content will still be king. It will rule more benevolently and perhaps more frugally, but it will still reign supreme.