There are a lot of conflicting views about the value of new business models enabled by the Internet.

One of the hardest things is to get a quick impression of what various alternatives may mean for the entrepreneur.

Of course it is relatively easy to map the comparative cash flows from one model or another, but it is much harder to attribute concrete value to the services that the “inbetween” players may bring.

I came across a visualization of the comparative values of the top line revenues for selling music online as opposed to selling it in the form of CD's at Information Is Beautiful. The graphic is displayed below and if you can't read it because of the resolution in the browser download the image or go to the original.

My view is that with regard to content industries, the role of the editor or the curator is now becoming much more valuable than ever before. These are the people who either make content more discoverable or more desirable. That happens either through the provision of advice to the creator of the content – traditionally what the music publisher or the book editor or the record producer has done in the past, and in some cases continues to do; or through providing technical expertise in terms of online technologies to enable material to be more rapidly presented to a potential customer, through the use of search engine optimization or choice of meta data or even perhaps by use of new tools that are being developed such as Prezi.

The creative entrepreneur who ignores the role and value of these intermediaries is unlikely to succeed. Now that doesn't mean that everyone who wants to sell their creative works online still has to go through a giant corporation. The reality is that many of the people who are truly expert in these various fields don't work for big corporates. But the fundamental issue is that unless you cost into your overall profit model, the inclusion of these services, what you end up with is content that fails to engage and therefore fails to generate sufficient revenue to make it worth while.

Have a look at the numbers for music and you will understand why making money online is not as simple as it sounds.

This entry was posted on June 5, 2010 at 10:41 pm. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Posted in Main Page by Chris Gilbey No Comments Yet