Friday, October 26, 2012

Part 4: The end of barriers to entry and financial limitations

Publishers can afford to be in all kinds of media because the capital investment required has dropped dramatically. Almost everything that a publisher needs to do in order to create and distribute content can be done with a personal computer. Adobe will rent you Creative Suite 6, with all the software needed to create almost any kind of media, including books, audio, video and apps, for $50/month per person. You no longer need to invest millions of dollars in networks and distribution equipment in order to do live worldwide broadcasting—all you need is an Internet connection and an account with YouTube, Livestream or Ustream. With the right people, a $1,000 DSLR can create video comparable to a $65,000 camera, and a $2,000 camcorder has the features and quality necessary for broadcast television. Every significant device used for creating media—PCs, tablets, smartphones, cameras, camcorders, audio recorders and much more—includes (or is based on) a microprocessor that’s subject to Moore’s Law. Costs go down and capabilities go up like clockwork.

It’s widely believed that the reason that media became “mass media” was due to its dependence on advertising—advertisers wanted to reach the widest possible audiences. That’s partially true, but the original reason was that the capital investment needed for newspapers, magazines, radio, television and motion pictures was so high that media companies had to pursue big audiences. Today, however, there’s no reason to pursue mass audiences—capital requirements are low, technology is readily available at the consumer level, and infrastructure that media companies once had to own themselves is now available in the cloud, on contract or on a project basis.

There are no more technical or economic barriers to entry. The biggest remaining barrier is the attitudes of the people making decisions at publishers, and those of the people advising them. If you believe that your business is making and selling bound stacks of printed paper, and you’ve believed that for your entire career, it’s almost impossible to accept that you’re really in the entertainment, or information, or education business. It’s very easy to confuse the tools with the products that the tools create, but it’s the products, not the tools, that matter.

Patton Oswalt delivered a brilliant keynote at the 2012 Montreal Just for Laughs Festival in the form of two letters, one to his fellow comedians, and one to the “gatekeepers in broadcast and cable executive offices, focus groups, record labels, development departments, agencies and management companies.” Here’s a quote from his letter to the “gatekeepers”:

“In my hand right now I’m holding more filmmaking technology than Orson Welles had when he filmed Citizen Kane. I’m holding almost the same amount of cinematography, post-editing, sound editing, and broadcast capabilities as you have at your TV network. In a couple of years it’s going to be equal. I see what’s coming. This isn’t a threat, this is an offer. We like to create. We’re the ones who love to make stuff all the time. You’re the ones who like to discover it, patronize it, support it, nurture it and broadcast it. Just get out of our way when we do it.”

Oswalt is being overly generous when he describes what the “gatekeepers” like. The only thing they truly “like” is to make money. Everything else they do is necessary in order to obtain the talent and content that they need in order to make money. To them, the content that they create is a “unit of production,” just as cars are to Ford or boxes of cereal are to Kellogg’s. “Patronizing, supporting and nurturing” are nothing more than product development—the process necessary to get any creative idea from an outline on paper to a finished work that can be sold in order to make money.
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