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Home Broadband

The Economic Laws of Content

by Dana Blankenhorn
August 9, 2006
in Broadband, business models, economics, Film, futurism, intellectual property, Internet, Music, Web/Tech, Weblogs
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Prosumer
Japanese researchers report that when broadband is fully available, people download only one-third more than they upload. (Picture source.)

This leads us to the assumption that folks are prosumers, producing as much as we consume, and that thus all users really are (and should be) equal.


But what are we really doing with the resource?

There is what I call an economic law
covering content. It’s a sort of inverse-square law on both the
production side and the consumption side of broadband.

  1. Almost anyone can write. It’s also
    low bandwidth. So it’s very symmetrical. And what someone defines as
    good (or bad) is so subjective there is an audience for almost
    everyone. (Even me.) Again, it’s symmetrical.
  2. Radio takes more people to do right.
    It’s higher in bandwidth. Less symmetrical. And less of it is also
    "good," so again, less symmetrical.
  3. TV takes even more people to do
    right. It’s even higher in bandwidth. Even less symmetrical. And,
    again, less of it is "good." Also, it wears on its audience
    quicker.

Bartles_and_jaymes_wine_cooler_ad
Now if you want to restrict yourself to
short bits (in terms of length) you can get over some of these hurdles. (Think blog posts.) It takes just a few people
to create a short song. While its chance of being perceived as "good"
is low, it’s also infinitely re-usable. Once someone decides a song
is good, they will listen to it many, many times.

Same thing, in spades, with making TV. It
takes more people to do even a short TV bit that will be perceived as
"good." Trouble is it’s also less re-usable than a song. How many
times have you seen your favorite "Seinfeld" episode? How
many times have you heard your favorite song?

It’s just as hard to do a bad TV show
as a good one. These economic rules don’t change. Networks and cable
have a lot of really bad TV out there, which has a very tough time
drawing an audience.

What does this all mean for the
economics of networks? It means that no matter how advanced or easy-to-use the
tools become, we have (as consumers) more appetite for sound, and
even more appetite for print, than for TV.

How do we get over this? By using
networks to work together. But that is something that is happening
more slowly, because once people get together on a project they have
to make decisions on roles. Which is hard, and subject to Moore’s Law
of Training (there is no Moore’s Law of Training).

I’m not trying to throw cold water on
the promise of the broadband medium. We are all still consumers as well as producers. What’s
happening, I think, is that our appetite for consumption is both
broader (we go to more sources) and shallower (we take less from each
source) as networks become richer.

Which is a very good thing indeed.

Tags: broadbandbroadband economicscontenteconomicsInternet broadbandInternet economicsqualityradio economicsTelevisionweblogs
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Dana Blankenhorn

Dana Blankenhorn

Dana Blankenhorn began his career as a financial journalist in 1978, began covering technology in 1982, and the Internet in 1985. He started one of the first Internet daily newsletters, the Interactive Age Daily, in 1994. He recently retired from InvestorPlace and lives in Atlanta, GA, preparing for his next great adventure. He's a graduate of Rice University (1977) and Northwestern's Medill School of Journalism (MSJ 1978). He's a native of Massapequa, NY.

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Comments 4

  1. Thuktun says:
    19 years ago

    Consumers using Bittorrent or other swarming peer-to-peer applications could contribute to this fiture.
    These applications download content at high speed by not only downloading, but assisting other user downloads by uploading that content to them.

    Reply
  2. Thuktun says:
    19 years ago

    Consumers using Bittorrent or other swarming peer-to-peer applications could contribute to this fiture.
    These applications download content at high speed by not only downloading, but assisting other user downloads by uploading that content to them.

    Reply
  3. Jesse Kopelman says:
    19 years ago

    It doesn’t take that much effort to modify existing video into something that people will enjoy separately from the original. A good example of this are those modified movie trailers that people have been doing. In one famous example they took a trailer for The Shining and by changing the music and adding a few text blurbs they turned it into what appeared to be a trailer for an inpsirational family movie. Does such a thing have good rewatchability, no, but it also only took a tiny ammount of time and resources to produce yet was enjoyed by hundreds of thousands, if not millions of people. When thinking about content over the Internet, the key could well doing a lot of things that each make a tiny profit, but in aggregate make a huge profit. Trying to apply traditional economic models based on completely different distribution schemes completely misses the potential and the point of doing things over the Internet.

    Reply
  4. Jesse Kopelman says:
    19 years ago

    It doesn’t take that much effort to modify existing video into something that people will enjoy separately from the original. A good example of this are those modified movie trailers that people have been doing. In one famous example they took a trailer for The Shining and by changing the music and adding a few text blurbs they turned it into what appeared to be a trailer for an inpsirational family movie. Does such a thing have good rewatchability, no, but it also only took a tiny ammount of time and resources to produce yet was enjoyed by hundreds of thousands, if not millions of people. When thinking about content over the Internet, the key could well doing a lot of things that each make a tiny profit, but in aggregate make a huge profit. Trying to apply traditional economic models based on completely different distribution schemes completely misses the potential and the point of doing things over the Internet.

    Reply

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