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Monday, November 14, 2011

Can Content Producers Be Disruptors Or Is Content Only Meant To Be Disrupted? | Excerpt from TechCrunch

Then Why Aren’t TMCs Investing in New Media Programming

The Traditional Media Companies are not investing aggressively in lower-cost, made-for-Web (and mobile, tablets) programming.  They have absolutely no financial incentive to see online video advertising grow and hit the projections because a lot of that will invariably come at the expense of television.

Ultimately, online video content can be promotional or commercial.

To TMCs, in all likelihood, it will be promotional: it allows them to bring down distribution and marketing costs.  Video content is an investment, a cost of goods sold or marketing expense, but it’s a necessary part of the marketing mix and the most popular activity online, what people spend 47% of their online time doing.

This Creates an Opportunity for New Media Content Producers

Content is not a zero-sum game, so long as new media producers create content to fill the hole and demand online, then they can over time replace the mindshare previously held by the TMCs.  If you doubt that look no further than Disney’s decision to partner with YouTube even though it’s an investor in Hulu.  You also have to wonder when Viacom will sign a peace treaty with YouTube.  How much longer do they really want to not be on the largest video platform in the world?  How does that now grow the MTV brand and Viacom’s revenues?

VCs Remain on the Sidelines

You would think that VCs would see this opening and aggressively fund content, especially when you consider that we’re in the content consumption phase of the Web’s evolution: we have built the infrastructure and platforms, now it’s all about feeding the insatiable appetite of consumers who spend 33% of their time on new platforms (web, mobile, tablets) while marketers are only spending 19% of their ad budgets accordingly.  Kleiner Perkins’ Mary Meeker sizes the opportunity at $20 billion (see slide above).

Until more VCs come along who get the dynamics of media and online video, and back content plays, then they will be leaving a lot of money on the table.

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Posted via email from Siobhan O'Flynn's 1001 Tales

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