Disintermediation

It’s a big word, and the technorati are fond of talking it up, often arguing that in the information age, content producers connect directly with their audiences. What is really at stake, as Comcast and the major broadcast networks know all too well, is that the content distribution landscape is shifting. Amazon is pursuing this aggressively, and now Pandora makes it more clear:

> Have you heard of Donnie McClurkin, French Montana or Grupo Bryndis? If you haven’t you’re not alone. They are artists whose sales ranks on Amazon are 4,752, 17,000 and 183,187, respectively. These are all working artists who live well outside the mainstream – no steady rotation on broadcast radio, no high profile opening slots on major tours, no front page placement in online retail. What they also have in common is a steady income from Pandora. In the next twelve months Pandora is on track to pay performance fees of $100,228, $138,567 and $114,192, respectively, for the music we play to their large and fast-growing audiences on Pandora.
>
> And that’s just the tip of the iceberg. For over two thousand artists Pandora will pay over $10,000 dollars each over the next 12 months (including one of my favorites, the late jazz pianist Oscar Peterson), and for more than 800 we’ll pay over $50,000, more than the income of the average American household. For top earners like Coldplay, Adele, Wiz Khalifa, Jason Aldean and others Pandora is already paying over $1 million each. Drake and Lil Wayne are fast approaching a $3 million annual rate each.

[The whole post is worth the quick read](http://blog.pandora.com/pandora/archives/2012/10/pandora-and-art.html).

Youtube has movies

It’s a very interesting time for both content creators and content distributors: YouTube is not only attempting to fund original content, much like Netflix is doing, but, in a page also taken out of Netflix’s and Amazon’s playbook, is also in the classic movie rental/viewing business:

A movie available for viewing on YouTube

Our household subscribes both to Amazon Prime and to Netflix, but both of them really have a content problem and pricing problem:

* The problem for Netflix is that much of the content they once had, has slipped away. This is of course true in terms of the content it was able to offer via DVD but we have noticed some loss of streamable content as well. Content which was compelling to us and with its loss, makes Netflix less compelling.
* The problem for Amazon, and for iTunes for that matter, is similar in that the content that is available for “free” — once one has paid the Prime subscription fee of $80 per year, which is less than Netflix’s annual subscriptions of $96 per year I should note — isn’t all that compelling. The content that is compelling is priced rather stupidly.

For example, over the holiday break I caught a piece of a movie from the late sixties, early seventies that I really wanted to watch in that moment. In fact, it made me want to watch three films in all that were from the same period and were in the same genre, for the sake of comparison. This is purely for fun, a potential diversion of two to six hours. None of the three were on Netflix. All of the three were on Amazon, but at rental prices of $3 per film with a 48-hour window to start and finish or $10 to “own” the film. Of course the problem for Amazon is that I can’t watch the films on my iPad, and so I would have to pay more money than I want to pay for the privilege of watching, within a limited window of time, under less than ideal circumstances one or more movies in which I have only a passing interest.

I passed. And that is, I think, the problem going forward for the new distributors: they are going to have to find a model for distribution and pricing that works for consumers like me, who are interested in paying for content but want, then, to have that content available to them under terms more amenable than are currently available.

Of course the real problem for the new distributors is negotiating this with the old, and new, content creators. I assume that a lot of the problem is that the old middle men are still around and want to maintain their lucrative place in the middle of the chain.

Coppola on the New Creative Economy

Nice interview with Francis Ford Coppola in The 99 Percent on his three rules “1) Write and direct original screenplays,  2) make them with the most modern technology available,  and 3) self-finance them” and much more. Along the way he laments that cinema was so quickly commercialized and he makes this very interesting comment about the future of content creation:

We have to be very clever about those things. You have to remember that it’s only a few hundred years, if that much, that artists are working with money. Artists never got money. Artists had a patron, either the leader of the state or the duke of Weimar or somewhere, or the church, the pope. Or they had another job. I have another job. I make films. No one tells me what to do. But I make the money in the wine industry. You work another job and get up at five in the morning and write your script.

This idea of Metallica or some rock n’ roll singer being rich, that’s not necessarily going to happen anymore. Because, as we enter into a new age, maybe art will be free. Maybe the students are right. They should be able to download music and movies. I’m going to be shot for saying this. But who said art has to cost money? And therefore, who says artists have to make money?

In the old days, 200 years ago, if you were a composer, the only way you could make money was to travel with the orchestra and be the conductor, because then you’d be paid as a musician. There was no recording. There were no record royalties. So I would say, “Try to disconnect the idea of cinema with the idea of making a living and money.” Because there are ways around it.

 

Make Stuff Not Search

Derek Powazak has a nice post about SEO optimization: don’t do it. Or, as he details, do it the way you would have done good content in the first place and don’t spend time, nor money, trying to “optimize” for various search engines (e.g., the mighty Google, which shifts and tweaks its algorithms weekly anyway). Powazek goes on to argue that SEO is, in fact, [poisoning the web](http://powazek.com/posts/2090).

It goes without saying that this applies a broad range of industries, disciplines, vocations and it shouldn’t surprise anyone that there YAP (yet another post) that really is some version of *do what you love because you love it* — okay, the echoes of Joseph Campbell’s “follow your bliss” make my head hurt — which is really becoming something of a Web 2.0 mantra. Don’t get me wrong, I like it … I even believe it. *Yikes!*

The Future of Content

[Paul Graham][pg] is proof positive that usually the best writers are some of the best thinkers. (We have done ourselves a terrible disservice by separating the two, but that is for another time.) Not only is Graham one of the best essayists at work today, he is also someone who knows how to find solutions to problems. Witness his most recent challenge:

> RFS 1: The Future of Journalism

> Newspapers and magazines are in trouble. We think they will mostly die, because we think we know what will replace them, and it is too far from their current model for them to reach it in time.

> And yet people still need at least some of what they do. You can’t have aggregators without content. So what will the content site of the future look like? And how will you make money from it? These questions turn out to be very closely related. Just as they were for print media, initially. The reason newspapers and magazines are dying is that what they do is no longer related to how they make money from it. In fact, most journalists probably don’t even realize that the definition of journalism they take for granted was not something that sprang fully-formed from the head of Zeus, but is rather a direct though somewhat atrophied consequence of a very successful 20th century business model.

> What would a content site look like if you started from how to make money—as print media once did—instead of taking a particular form of journalism as a given and treating how to make money from it as an afterthought?

> (The good news is, we think the writing will actually end up being better.)

> Groups applying to work on this idea should include at least one person who can write well and rapidly about any topic, one or more programmers who are good at statistics, data mining, and making sites scale, and someone who’s reasonably competent at graphic design. These functions can of course be combined, and in fact it’s even better if they are. Ex-Googlers would be particularly well suited to this project.

[pg]: http://paulgraham.com/