Making sense of the content business

During a recent photo-industry discussion, the topic of growing the market for high-margin photo specialty products (PSP) came up. Despite heavy investments by major industry players, there is relatively little uptake by consumers for these products (photo books, photo cards, canvas, etc.).

I think part of the issue the photo/imaging industry has it still comes to this with a “production mindset,” not a “customer mindset.” Consumers never asked for 4×6 prints; that’s what was provided. In the analog days, that worked. It allowed producers to be wasteful to achieve economies of scale, and forced the consumers to pay for the waste. Like a song? Buy the LP or CD. Want pictures? Shoot a whole roll of film to get the three good shots. Want to read an article by Hunter S. Thompson? Buy the whole issue of Rolling Stone magazine.

Digital has changed that, and not necessarily for the benefit of the producers. Consumers are armed with more data and more choice than ever, while quality has largely achieved parity. Are any lab’s prints really any better than their competitors at this point? If it is, it’s not a level of difference that will matter much.

Want to watch that SNL clip everyone is talking about? I don’t even have to watch SNL; just go to a friends Facebook page – where it’s embedded – and bypass NBC altogether. Yet, NBC’s costs to produce SNL are the same. So they have to find other ways to monetize that content. Now, instead of a first-run showing and maybe a re-run, they provide SNL bits as Hulu content, and as “best ofs” collections on DVD and downloads.

I think one of the fallacies we have heard in this “digital nirvana” we now live in is the assumption was made a “rising tide lifts all boats.” This is far from true, I’m afraid, because I think some business are in completely different bodies of water. The rising tide of content creation — photography, video, writing, etc. — has not necessarily benefited those who produce this content in favor of distributors (websites) and consumers. The laws of supply and demand are still in play, however, which means those of us in the content creation business are seeing downward pricing pressure. What are photographers getting for weddings these days? Who can make a living shooting stock photography anymore? CNN just let go all of their still photographers. (Especially heartening for me: I just read where a blog is looking for writers, at the princely rate of .009 to .02 cents per word. Do the math.)

Do I sound negative? I’m not. I’m a realist. I think there are huge opportunities out there for a lot of players but, as we’ve seen with the collapse of some very big companies in this industry, the old rules don’t apply, and the new rules haven’t been written yet.