Friday, February 8, 2013

The Future Of Digital Content Is Exclusivity?

At the LA Innovation Forum on Tuesday, the experts in digital content spoke about the future of the industry.  At the panel Hulu's Jason "Kilar noted that the future of sites like Hulu will be with exclusive content, 'something you can't get somewhere else.'" And while I did not personally attend, I wonder if anyone challenged this notion.  Certainly not that it isn't true; rather, that it is the case for all content.

How did print content survive for so long, exclusive content.  In fact, their challenge is not just exclusive, but that the value of the content is minimized by other content that mimics it, only for less.  Print has been challenged because consumers are being asked to pay when other similar content is available for free.  Think generic drugs verse labeled prescriptions, or generic liquor verse premium liquor.  Once we believe that the premium or exclusive stuff is a better value, we as consumers will migrate back to it.  Hence, the New York Times and Wall Street Journal and other print are seeing digital subscriptions rise.

Distribution platforms that own content have a better means to protect it.  The New York Times has contracts with writers.  But except for Comcast, cable operators don't own their TV networks.  In fact, they make a business of selling content in different "windows" to try to keep content exclusive over periods of time.  Movie studios have made their business selling content across different windows, theatrical, premium, and broadcast TV.

In the movie industry, the exclusivity is threatened when content is moved in front of the pay wall and made available, sometimes illegally, to the masses.  Today's news of Disney classic animation movies not being protected on You Tube is but one example.  For cable operators, the threat is that the networks that they pay a monthly license fee for content is offering the same content to consumers on other mobile platforms.  It eliminates their exclusivity and has these cable operators literally offering broadband service to circumvent their own cable service.  Consumers who don't want to pay for cable can still get their TV shows through Hulu and other websites. 

Of course exclusivity is not the only means to gain consumer share of market.  A better transaction experience, easier download, quality of the stream of content, quantity and variety of product, and other factors affect the buying decision.  And as consumers we are willing to buy digital content once we believe it delivers to us a value proposition that works.

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