(FIRST DRAFT -- A Work in Progress. Comments Welcome)
Print media publications of all kinds -- newspapers and magazines -- are dying out, as the Web and online advertising take their place. Increasing amounts of what used to be premium content (via paid wire services and databases for example) is now available for free on the Web.
At the same time the rise of blogs and wikis is giving individuals and groups of people effective ways to publish and distribute content to global audiences. As the major publishing brands decline in audience, upstart online brands are rapidly gaining eyeballs. And now, in the middle of this chaos, social networks like Twitter and Facebook are changing the way content is discovered, further chipping away at the value of the traditional leading media brands.
Major newspapers are closing, journalists, writers and editors are being fired in droves, and there is a sense among those who work in print media that it is the end of an era. Print as a medium is in the process of being superceded by online media. As this happens the content and advertising industries that have formed around print media will undergo radical disruptions and change as well. As we shift to an online media-centric world the economics of content and advertising must and will adapt.
But what will the new model be like? How will the economics of content publishing and distribution be different in the near future of the Web?
In this brief article I will propose the beginnings of a possible new economic framework for Web 3.0 and beyond -- one which could revitalize the media business and help it transition to the online world.
I'll call this new economic model "Content 3.0" or "C3" (to coincide with Web 3.0, the third-decade of the Web, when media goes completely online).
In the Content 3.0 (C3) media economy it all begins with pieces of original content. Each piece of content has a corresponding block of "stock" available to be owned by various kinds of investors. The principal classes of stock are:
- Creators Writers, journalists, photographers, artists, designers, editors and their representatives such as agents etc.
- Distributors Publishers or other types of distributors
that aggregate audience for content, and who monetize access to that
content by their audiences, and their agents if any.
- Participants Audience members or customers who consume the content (for free or for a fee), rate, annotate, discuss, and share the content. Participants are not just any consumer of the content, they are consumers of the content who choose to invest to earn or purchase shares in the content.
Each piece of content has a certain number of shares of virtual stock, just like a corporation.
When a piece of content is first created 100% of its stock is owned by the Creators. The Creators may then sell some of their shares to Distributors in order to bring it to market.
Distributors bring Participants and revenues to the content, creating a market for it. To attract Participants, Distributors pay to market the content. To attract revenues, Distributors invest in sales and other processes to attract and/or integrate with various monetization partners (such as advertisers, ad networks, affiliate networks, etc.).
Distributors frequently buy and sell shares in content with other Distributors, with some focusing on debut-only content portfolios and others on portfolios of reference and archival material. This aftermarket in content shares is facilitated by various brokers and agents.
Participants may also invest in shares of content, by helping to spread the content (and thereby earning shares) or by buying shares from the other shareholders (Creators and Distributors and any other Participants who hold stock). Participants may also buy and sell shares in content in the same aftermarket that Distributors participate in.
Any profits from monetization of a piece of content are shared as dividends, pro-rata, among the shareholders.
Each piece of content functions like a public company stock in a virtual stock market. This virtual content stock market, like other public markets in securities, is regulated by the SEC or an equivalent regulatory body.
Once a framework like this is in place, complete with the necessary micropayment and legal systems to make it work, the new content economy can really take off. It is a much more loosely coupled and equitable world -- one that creates strong entrepreneurial opportunities for professional content Creators, while still providing a solid ROI for content Distributors who team up with them. Participants can also participate by finding hot content early and investing in order to reap shares in the profits, and to potentially flip their shares to someone else before the price goes down. It works just like the stock market.
The final major element of this picture is that there may not be just one stock market for buying and selling shares of content items. Instead there may be many. Each of these stock markets will be the equivalent of the media empires of today. Various content Creators, Distributors and Participants will participate in these marketplaces in order to transact around the shares of particular pieces of content that are listed in them. It may also be possible for an item of content to list across more than one of these markets at the same time.
While a system like this would face numerous hurdles to actually become real and get official legal status, I believe it could be where we are ultimately headed. It may take 20 or 30 years to fully emerge however. I believe there could be compelling business opportunities to form new business that enable this Content 3.0 ecosystem.