New Media and Business

hugh macleod just said: if you aren’t making money off web 2.0, we don’t know to tell you how. it’s kind of the same thing with me. the circumstances i’m in are kind of unique (it’s still ads though), but i wouldn’t know how to replicate the success with someone else. it ain’t easy, let me tell you.

The pinko commie bastard in me worries a little about what the proliferation of “effective web 2.0 business models” will mean to the future accessibility of this space…

Student loans, baby.

Okay, now that I’m done being flippant, here’s the thing about new media.

New media is media.

I can hear you saying, well, DUH. Of course new media is media.

What that means, though, is that new media generates revenue like any other media form, by communicating simultaneously to people who have needs and people who can fulfill those needs. Take a look at any mainstream media model and you’ll see the black box inputs and outputs for media.

- Ads
- Selling services/recommendations
- Infomercials
- Product placement
- Consulting
- Affiliate programs and secondary marketing
- Network marketing
- Brand transfer

We talk a lot about how new media is different than mainstream media, which is great for refining the art form, but if you never have the conversation about how new media is the same as mainstream media, you’ll never be able to determine which old media revenue models (you know, the ones people pay billions of dollars for) will work in new media.

Why reinvent the wheel?

One final thought. As you move forward as a new media expert, think about transferrence. What skills can you develop in new media (audio engineering, video editing, copy writing, etc.) that easily transfer to old media or to a “non-media” company (even though every company is a media company unless it doesn’t ever talk to customers)?

That’s how you will survive Bubble Burst 2.0.

Coffee mugs and mousepads!

http://www.cafepress.com/markdaycomedy

That wasn’t really what you meant, was it?

I love what Christopher is saying about using the media models at least for understanding. This is communication technology, after all.

Consulting has huge implications though perhaps small returns as we look at how to help lots of people do significant work with smaller audiences. For local communities to make channels, to link up, to produce quality…that takes counsel.

Also, thinking about the Bubble Burst time, make sure the transferable skills aren’t just technical but also reflect the relational, community-building stuff that CBrogan has been stressing as a difference.

Are we tech/media people building community, or community builders using technology? Where’s your heart?

Galacticast coming to a theater near you!

Well, not quite yet. But I can see it happening in the near future. This is going to become a reality due to movie theaters going to a digital film format [Read http://spectrum.ieee.org/dec06/4768. Now I am not suggesting that Rudy and Casey do a full-length two hour movie (unless they really want to). What I am envisioning is more of a regular or double length Galacticast episode. Theses movie featurettes could be shown before the main feature.

Now what is the draw, incentive for either the movie theater to place this featurette or Galacticast to produce one. Well these featurettes could be movie theater exclusives only shown in the theaters. This might ensnare a certain movie going demographic to come to the theater. Or Galacticast could produce several of the featurettes (Watch all five Galacticast shorts) and create a drawback for the viewers. This might work well with certain large Sci-Fi productions that audiences go back to see again and again (think Star Wars).

But the real attraction is to have a Galacticast night. The theater gains by selling tickets for an exclusive event and Galacticast could take a cut of the ticket sales. The real beauty is that with the digital technology there is no other costs (except for the minor clean-up of spilled Coke and popcorn). The top ten Galacticast episodes could be shown with an additional theater exclusive. Again the real attraction is watching Galacticast on the Big Screen.

There is precedent for such theater showings to an alternative audience. Yes, The Rocky Horror Picture Show. Now this idea might become a novelty. But it is a money making novelty.

And we are talking about not just Galacticast, or Rocketboom (think Universal Newsreels), or STBD, or any other show on Network2.tv. Instead of renting out the movie theater to view the latest movie, you could rent it for your Grandparents 50th wedding anniversary. The summer children’s art program could show their movies on the big screen. Theaters could host corporate events using digital media. Any large audience video cast or overflow seating for large events could be held at the theater. And those birthday parties, instead of the latest movie being shown, you could choose amongst several hundred movies now in digital format.

Now those latter ideas give more incitive to the theater for going to a digital format. But whether it is Galacticast night or the local movie festival at the digital theater you have a revenue stream coming from your digital media.

Not saying that any of the following is happening, or is likely to happen, but it could happen.

From what I know about the movie industry, they could very easily cancel the contracts to send the first run movies to the theatre if they wanted to.

It wouldn’t take much, and if they found out that you are playing something there other than ‘Hollywood’ content, that’s probably all they’d need.

The owners of the movie house aren’t going to take that chance.

This is a thorny issue. In part, the creative content may not pay the way we might want it to; people are already being “discovered” online and making a jump to traditional media, as well as old media types making a new space for themselves online. This is why Podcamp NYC is critical- old and new media meeting and talking about what we share and where we differ.

Michael, I agree that the reaction from Hollywood could be harsh but it would also be the wrong one. I am not talking about competing with Hollywood but supplementing the theaters regular schedule (again think of the monthly late night showings of Rocky Horror Picture Show).

I don’t see any comparison between, let’s say, Galacticast vs. a “Hollywood Blockbuster” in terms of production value, length of show run, nor income from number of seats sold. Even though Rudy and Casey produce a great product, no theater would replace a matinee showing of the latest Hollywood release with 10 episodes of Galacticast. But if the incentive (read $$) was there the theater owners would add it on top of the regular Hollywood showings.

Here is the central point, the $$ incentive. The Hollywood business has the incentive to go to digital (“savings of several hundred million dollars [annually]“). But for the theaters owners the cost of a digital projector increases from $35,000 to $100,00 thousand. Where is the deciding factor to convert? Let me give that to you in three words. User Generated Content. At little cost, if any, to the theater owners, the audience creates their own content and the theater sells the seats reaping in all the sales dollars. Or a third party, like Galacticast, provides the content and the theater owners spilt a share of the revenue with that content provider.

And Hollywood would be rewarded in loosening the reigns a little on what the individual theaters play outside of the regular schedule in two ways. First, at these additional showings the theater would run the usual Hollywood movie previews. And second, the theaters could show any digitized past Hollywood releases to requesting audiences splitting ticket sales with Hollywood.

Ed,

Yes, I agree with you and I also agree that Hollywood would probably react in the wrong manner.

I know that a 30 pre-spot ad cost $3,500 for 4 weeks to have aired, because I purchased one about 4 years ago. To replace that with a freebie, no matter how good, only means a loss of revenue for someone in their foodchain.

Don’t get me wrong, I wish that all of the pre-show runs were nothing but episodes from all of the web content which we all love.

Perhaps initially, there’ll be a few “progressive” theatre houses who will begin to do just that.

Then if they see that people are showing up a little bit earlier because the word is out that they’re showing some great stuff before the feature, things might begin to roll a little bit quicker.

Of course, we couldn’t show just any episode – some old rocketboom episodes have dropped the “f” bomb and some beer drinking, and other web content certainly isn’t General Audience rated, but that doesn’t mean that they couldn’t produce a few “theatre grade” episodes. Or better yet, the episodes they pick to show could just go along with the rating of the main feature – problem solved.

I wish that everything you are saying is the way that it would be. It would be a great opportunity to introduce people to what they’re missing

Do you know any owners of a movie house with a digital projector yet?

Ok, so here is the business plan (sorry for hijacking this post Chris)…

New Media Business Plan #1

Summary: XXXX provides digital content and digital video services to the three local Pittsburgh Carmike Cinemas. The digital content is original work provided to supplement the theaters regular schedule. This original content will be shown every Friday night at midnight and will contain a pre-net release of STBD along with pre-net release of Galacticast and other new media content totaling 45 minutes of content (including 5 minutes of sing along). In addition to the original digital content we will provide our digital video services for a extra fee. For special events at the theater, again outside your regular schedule, you can sell seats to customers and we will work with those customers to generate digital content. Examples include wedding anniversaries, class graduation videos, corporate events, Best of the Arts series week, exploring the underwater world of the Pittsburgh rivers in 3D.

Vision: We believe that the combination of digital theater productions and the desire to be seen on the Big screen is the next new big wave. This wave will provide new revenue streams for theaters.

Revenue Streams: For the Friday Night Specials $6 ticket (-$0.50 our share) x 50 seats x 52 weeks = $14,300 year for the theater. For corporate events, flat fee of $5,000 of which we take $300-$700 depending on the video production work. For Birthday Parties $120 of which $30 we take for video production, etc. etc. In addition we will sell DVD copies of the events back to the participates which we will give you the theater a 20% cut of DVD sells. Overall the theater’s revenue will increase by 15% with very little increase in operational costs.

Future: We expect to increase theater attendance by several thousands seats sold per year.

From the real rough sample business plan the big selling point is that with digital production the theaters can add new tickets sold by providing user-generated content. And you, the new media types will be providing both content and your services to make it happen and providing you with an income!

Wow. You guys are really making this post rock. Thanks for the passion and the commitment.

In lots of ways, most of us are either on the verge of something good, or we’re on the verge of going under. I’m hoping we find a way to be A not B.

–Chris…

I like the idea of the theatre stuff, even in a Second run, or film festival mode- Could we have a best of the Vlogs film festival? Why not? (I do know some people left over from the days when I went to DC occassionally with my boss for lobbying issues with the National Association of Theatre Owners…..)
Pixar has a huge digital cinema in their studio outside San Francisco- I bet some museums might as well……… I think this idea could have some merit, even if it was a serial one off in different towns, say in conjunction with the tribeca film festival in NYC, for example.
Anybody up for it?
Whitney

Anyone insterested in finding more about installations of digital projectors can find it at DCinemaToday. This link comes from the article I originally quoted, “Bits on the Big Screen” in the December 2006 issue of IEEE Spectrum. (I noticed the link above was broken as they now require registration to view the article).

I like the business model behind Ed M’s digital content night, and think you could blend it with a concept like Sellaband to take it to the next step. Rather than have an organization act as a clearinghouse for digital content to be shown in a theater, it might make more business sense to simply manage an investment model for it.

Example: Content producer A says that it wants to get its show into X theater(s). It publishes a public support drive (auction on eBay? proprietary tool?) to gather enough pre-sold tickets @ $15/each ($10 for the theatre, $4 for the content producer, $1 for the site manager) for the theater of its choice. Once the goal has been hit, tickets are electronically issued and a cash disbursement is made to the theater.

The idea behind this model is that instead of trying to centrally manage relationships with a theater, put it out in the open for the content producers to manage. If Justin at STBD wants to get onto the silver screen at Loews Cineplex 16 in Pittsburgh, he can rally his support base to create the ticket sales, and the organization in the middle can work out all the administrative stuff like credit card transactions, etc.

Also, Justin could take a different route and seek a corporate sponsor for STBD in Pittsburgh to sponsor the event. See all of STBD Season 3 on the big screen sponsored by Network2!