Content is a commodity, no question. But who stands to prosper from it? There’s the rub.
So far, the ruling model falls in favor of the programmer and platform builders—not the content creators.
The latest revelation, rendered brilliantly by MyCube, that Facebook earned $1.86 billion from user-generated content in 2010 has people in awe. The problem is that the business model is passé — past its prime. It’s just another advertising scheme. Why? Because it’s a lopsided model that leans in favor of the platform builder and cuts content creators out of the deal. Overtime, users can find other places and ways to connect, leaving the platform vulnerable.
Far more durable in “content-as-commodity” realm are the collaborative capitalists. My favorite to watch is Bandcamp. It’s one of the Web’s fastest-growing communities for artists. Think Etsy of the music world. Go to an outdoor concert this summer and you’ll hear musicians crow from the stage, “Check us out on Bandcamp.”
I recently sat down with one of Bandcamp’s co-founders, Joe Holt, while I was making a swing through the east coast. Over lunch at a quaint Vermont inn, Joe revealed how Bandcamp’s impressive growth has been linked to its ability to help its members sell their content. All future plans for Bandcamp, as Joe explained it, will be driven by helping members succeed financially and sharing in that profit-making.
Everyone being committed to the other person’s success is the future of business.
Certainly Arianna Huffington knows this. While she started off with a news aggregation platform and unpaid bloggers, the HuffPo sale to AOL put it in another league. The new model is a more balanced business model where everyone has a shot at making money off of content, not just Ms. Huffington.
The slug-fest between Google and Facebook is an interesting one to watch. But my eyes are trained on collaborative capital companies. It’s not only where the action is, it’s where the future of business is headed…and fast.