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The Commoditization of Content

February 14th, 2011

I wrote in a recent Blog post about how content is king again. It’s true: Online media properties with fresh, relevant, updated daily content are as hot as steak sauce at a Texas barbeque festival. Venture capital companies, banks and media holding corporations are lining up, one by one, to raise their bid paddles and take the next Web 2.0 start-up on the auction block. JPMorgan Chase is rumored to be setting up a new fund for Internet companies. Companies like LinkedIn are gearing up for an IPO while Facebook holds its cards close to the virtual vest. Twitter flirts from a distance with Google and Facebook. Others like Pandora, Tumblr and Quora are seemingly on their way to large injections of investment, acquisitions, or public offerings. Even sites like Mashable and TechCrunch, or companies like Gawker would appear to be top candidates for investment or buyouts.

For the big picture, what does all this mean for content in general? Well, according to David Carr, the onslaught of amateur journalism, a.k.a. “user generated content” is a scary proposition for the community of professional writers and reporters. “The Huffington Post, social networks and traditional media may all seem like different animals, but as advertising, the mother’s milk of all media, flows toward social and amateur media, low-cost and no-cost content is becoming the norm,” says Carr in his column in The Times.

Carr does a great job of defining the larger trend as he shares his feelings about unpaid, unprofessional writers donating their ideas and thoughts to companies that are now being sold for hundreds of millions of dollars, like The Huffington Post. In fact, he makes a convincing comparison to serfdom.

“It’s less about the diminution of authority and expertise, although there is that, and more about the growing perception that content is a commodity, and one that can be had for the price of zero,” Carr maintains.

At Media Companies, a Nation of Serfs

He’s right, of course. Content is being commoditized. I remember my days as a young art director when I used to commission illustration for magazines. As the years progressed, I commissioned or assigned less and less original art. Instead, I found existing illustration or stock photography and paid a one time, non-exclusive editorial rate — usually about $250 for a spot and about $1,000 per page. In those days, we managed to create an entire award-winning publication on an art budget of about $16,000-20,000 per month. That was 1987.

I was still hiring photographers through the 1990’s, and on a rare occasion, we hired an illustrator. Illustration felt less relevant and also the abundance of stock imagery made it less critical as an original, outsourced product. But even as it became clear that photography was more direct and communicated the sense of immediacy and authenticity for most brands, it too, was becoming commoditized. We could source a stock image on Corbis or Getty or Jupiter for much less than it would costs to assign original art. Also, in most cases it was far easier. Setting up on location, or even for studio assignments were time consuming, and the results were unpredictable. With stock, it was fast, cost-effective, and we could achieve a mock-up and client approval in mere minutes in some cases.

Considering the photography market today, there are a few billion images that appear to be shared without regard. It’s as if anything goes in the world of online publishing. Digital watermarks are applied, but there are plenty of ways around them for those so intent on doing so.

While it’s not my preference or the standard for our firm, image copyright abuse does seem to be progressively more accepted. Pictures are found, posted, researched, rediscovered, reposted, and so on. Good photography will always be less ubiquitous and more valuable, but the Internet is full of imagery, so much that one wonders about the welfare of professional photographers. Many of my friends whose portfolios were once successful in stock agencies, or who earned their living on custom work, have struggled over the years.

In the end, this is that same thing that Mr. Carr is writing about. Content — whether it is photography, illustration, prose, statistics, information graphics, news — is in danger because the technology that enables us to access it, also lowers the barrier to entry for us to create it. It’s the democratization of opinion, of news, of a thought or idea. It’s pure supply and demand at work: There is an over abundance of content through the channels of social media and hence, the value of such content is less. And the standards are lower, by the same laws of economics. It’s the “Labor-Value Theory,” which states that the longer it takes to create something, the more it is worth.

On the upside, no one columnist is allowed to corner the market on this asset; anyone with access to WordPress can express their thoughts. It’s just that in many cases, the opinions are being expressed on a property that doesn’t belong to the author.

Anthony De Rosa, a product manager at Reuters, recently wrote on his Blog, “We live in a world of Digital Feudalism. The land many live on is owned by someone else, be it Facebook or Twitter or Tumblr, or some other service that offers up free land and the content provided by the renter of that land essentially becomes owned by the platform that owns the land.”

Carr makes a great point of how unfair the whole system has become. “It will be interesting to see how the legions of unpaid Bloggers at The Huffington Post react to the merger with AOL. Typing away for an upstart blog — founded by the lefty pundit Arianna Huffington — would seem to be a little different from cranking copy for AOL, a large American media company with a market capitalization of $2.2 billion,” says Carr.

He continues, “Perhaps content will remain bifurcated into professional and amateur streams, but as social networks eat away at media mindshare and the advertising base, I’m not so sure.”

It’s the Great Democratization of Content — an ominous thought for the future of journalism, to be sure.

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This entry was posted on Monday, February 14th, 2011 at 9:36 pm and is filed under Business, Media, Technology. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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IridiumGroup Inc.

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