The digital-content business is living through an era of unprecedented growth and rapid change. Innovations in technology, understanding from measurement and analysis, and better digital product offerings are all encouraging and adding new revenue streams and profit potential, which has resulted in an exponential growth in the demand for such content. There is now a huge opportunity in the digital content space.
Yet, digital content still has the reputation of being risky, having a low value, being fraught with narrow channels to market, allowing for a poor user experience, and the chance for piracy and intellectual property violations. We know it’s not the content that is the problem. It is widely recognized that the frequent obstacles to providing rich and engaging digital content are structural rather than inherent to digital content itself. The problem is rather the oligarchic nature of the content creator, who focuses on well-known, narrow and often unwieldy distribution channels.
All publishers of content recognize and understand that they have to tailor the way they deliver content in their industry. They are learning that the overbearing power of one ecosystem, such as Apple’s control on music and entertainment, will lead to a deal practice that is disadvantageous to the content creator.
Content creators recognize that to exploit the opportunities of digital content, one has to create an ecosystem that matches the simplicity of the Apple offering while tailoring the user experience to grow and nurture a community of its own. In 2010, content creators will be going direct to consumers more and more, with a model suited to the channel through decoupled frameworks across platforms.
Whether the content is eBooks bought by chapter or by subscription, or games bought on a level-by-level basis, the choice of purchase model is essential. The right choice brings with it savings in delivery and frees up funding for marketers to gain an even deeper understanding of the consumer through in-depth analysis and measurements.
The issue though is when consumers expect to get content for free. Dan Brown’s latest book was scanned and on Bittorrent within 15 minutes of release. This mentality brings a continued pandemic of counterfeit content in the marketplace. How do we tackle this? Just say, "if you can’t beat ‘em, join ‘em," and give it away for free?
It’s a very interesting and different business model, but can advertising really support this? In the gaming industry, AAA games will surely attract big advertising investment, some in-game; however, does this mean that it will be the end for smaller, more niche games houses? The answer is probably not, and we should actually expect a natural mix of advertising heavy AAA releases and some smaller pay-as-you-go component-based models.
The key change in this market is the games houses’ ability to go straight to the consumer with products, thus raising brand awareness and value. The ones who pull this off will own the market for the next 10 years.
But how does this silence the masses that expect digital content to be free content? The answer, perhaps, is to give them something only digital can offer. The truth is you can get digital content anywhere, anytime, right now.
Already, there are a myriad of new, feature-rich delivery channels, such as iPod, iPhones, PS3, Wii and set-top boxes. As more people adopt these channels, the expectation for quality content to fill grows rapidly every day. Each new distribution technology and content type represents a new revenue stream. Simultaneously, emerging markets are rapidly expanding their digital-content exploitation infrastructures, and are adding to the global demand. At the same time, the total freedom of choice that digital distribution is offering, combined with the on-line phenomenon of “long tail marketing,” make for a much more fragmented, but also much more efficient and longer lasting, exploitation cycle.
Keys to success in 2010 will be:
Track record: A proven track record of producing quality content. The major content publishers have great content but are large organisms that are not conducive to cutting-edge creative thinking or fast adjustments to market changes. It will take them time and they will learn from smaller, agile content creators with lesser-known content but with an expert understanding of their consumer and who can deliver to their users’ needs.
Distribution Model: Distribution capabilities and a future roadmap for new distribution models. A digital strategy that provides a decoupled channel experience with the ability to deliver the right type of content to the right channel, whether it be to browser, desktop, console or device, is necessary. The key is that content creators unlock and turn on digital content distribution channels as needed.
Market Analysis: Proprietary market measurement and analysis across the entire ecosystem. The content business has historically been too single-channel focused with no strategy for multiple digital channels. The future lies in concentrating on the advantages digital can provide through consumer understanding, from tailored products to more subliminal, less invasive advertising that is actually useful.
Final Thoughts
The content creators who understand their consumer and have identified the correct channels and appropriate content will maximize their investment. Channels will continue to grow; content will continue to be tailored; consumers will become more aware; the cloud will become more and more important; and connected devices will flourish. Such is human nature. We will see an increase in major content creators delivering directly to the consumer through decoupled frameworks across multiple channels, with subliminal contextual advertising taken from detailed reporting and statistical analysis that only digital content can provide. 2010 is about content on the Web. Paid for or for free, it’s in bite-size chunks, it knows what you want, when you want it and it’s always available wherever you are.
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