Video Content Easier to Share Than Written Content? A Content Strategy Paradox

Content strategy at traditional media companies is moving in two different directions.  Companies that focus on written content are making it tougher to leverage their word-based assets.  The AP is suing blogs who “scrape” content from their sources and Newscorp chief Rupert Murdoch recently announced that they are exploring micro-payments for content.

On the other hand, video content providers are opening their doors to sites who want to embed their video.  Hulu, the joint venture started by NBC and Fox, permits web sites to embed video content they own.  ABC, a unit of Disney, decided that this model was something worth paying for, as they recently took a 28% stake in Hulu.

Good Written Content Is A Commodity

As a medium, written content is far more ubiquitous than video content.  Even at the high end, there is not much difference between the New York Times Week In Review and Slate Magazine to the typical consumer.

News companies are desperate for revenue, so perhaps giving micro-payments a shot is a last-ditch effort at survival.  But even a Hail Mary towards users payment doesn’t seem like a sustainable business model as content publishers grow more numerous on the web.

Quality Video Content Is Expensive

Relative to high quality written content, good video content is very expensive to produce.  The move to foster embedded video content seems to reflect certain media companies’ strategy to gain more of the benefit of viral content and reduce the resources it takes to chase down illegal copies.

The strategy also appears to be a desperation move, but a slightly more calculated one.  If everyone is going to watch the latest Justin Timberlake and Andy Samberg video, they might as well watch it from a site the companies control.

By making it easier (and legal) to distribute video content, you can at least get some revenue from embedded advertising and traffic as well as the ability to show users “related videos”.

Someone is Making a Strategic Content Pricing Mistake

Classic micro-economics suggests to me that a non-scarce good (written content) should cost significantly less than a scarce good (video content).  Therefore, it seems one of these two groups of firms are making a strategic error.

The AP and Newscorp stand to lose more if they are wrong.  If they charge a price where “good-enough” substitutes are free, consumers will shift to the free good.  This shift could increase the reputation of alternate news agencies and diminish the brand equity of AP and Newscorp, even if they return to a free price.

If NBC, Fox, and ABC are wrong, they simply miss out on “extra” revenue.  Strategically, they benefit from destroying content pirates as well as from the savings in no longer pursuing legal action against the pirates.

Posted by Ben Foster

Posted on May 12, 2009 at 9:37 pm by Ben Foster · Permalink
In: Content, Strategy

4 Responses

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  1. Written by Chris Brooks
    on May 13, 2009 at 3:19 pm
    Permalink

    The idea of scarce verses a common good is really one worth considering. Like you mentioned in the wired magazine article free is the new price, so charging for good enough when the world is wanting more and more for free just is bad business. That however doesn’t mean there isn’t a market for premium services, like video, you just have to make it worth it. If I can see it on Youtube or read about it somewhere, why should I pay you? What can you offer me in terms of value that makes me want to open my wallet?

  2. Written by Chris Brooks
    on May 13, 2009 at 9:19 am
    Permalink

    The idea of scarce verses a common good is really one worth considering. Like you mentioned in the wired magazine article free is the new price, so charging for good enough when the world is wanting more and more for free just is bad business. That however doesn’t mean there isn’t a market for premium services, like video, you just have to make it worth it. If I can see it on Youtube or read about it somewhere, why should I pay you? What can you offer me in terms of value that makes me want to open my wallet?

  3. Written by Alain Breillatt
    on May 14, 2009 at 6:48 pm
    Permalink

    And this is exactly the question that was exploded open during SxSW. If everything is free, now what? And the answer is, go back to charging for high quality production – whatever the medium might be. But make sure your loss leaders have a very clear objective. Seth Godin has additional insights on the purpose of free.

  4. Written by Alain Breillatt
    on May 14, 2009 at 12:48 pm
    Permalink

    And this is exactly the question that was exploded open during SxSW. If everything is free, now what? And the answer is, go back to charging for high quality production – whatever the medium might be. But make sure your loss leaders have a very clear objective. Seth Godin has additional insights on the purpose of free.

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