Digital, Schmigital

I absolutley love being in the middle of an industry full of upheaval and change, and trying to figure out how to create new economics of production and whatnot, especially in my new role at Endemol.

As of October 1, I’ve been made the new Director of Production, Digital Media for Endemol. Which is really damn cool.

In fact, our CFO gave me a great opportunity to pretty much build a new digital studio from the ground up. We are hard at work setting ourselves up to be the fastest turnaround, highest margin digital production company in the area and it’s exciting to be able to play a large role in that.

At the same time, I keep coming back to debate this great “everything should be free because it now it doesn’t cost anything to distribute it” thing.

I think we need to draw a clear distinction between the pieces of art (or commerce) that can be created by one person, and therefore very low or no cost, and those pieces of art that are commerce that cannot be created by just one person or as a hobby.

A painting, a drawing, a jam session with a band, all hobbies. All things that can be done in spare time.

Creating compelling stories of quality on video, film, or otherwise, all take very long days, from many people, over a period of dedicated time to create. Even the smallest of small short films I worked on where *everybody* worked for FREE and we only paid for the permits and equipment necessary to create “quality” film (properly lit, etc.) cost $5,000 and that was with a ton of donations. The next smallest short film I did was $70,000. A single episode for Discovery Channel I produced with a 4 person crew, over 4 weeks plus editing and travel? $300,000 – and no one was making *that* much money on that show either.

These are not costs that can be recouped on “The Long Tail,” because by the time we make the money back on onesie and twosie sales, we’ve been bankrupt for 10 years already. The inital outlays of capital it takes to make this stuff has to be recouped somehow.

For those that say “by advertising” I’d like to point out there is NO upfront market for any other distribution platforms except Network Television – and therein lies the rub.

Perhaps if there were an upfront auction for windows of advertising attached to properties *before* they are released, that could change the economics. Or, perhaps content producers could do a deal where a digital distributor pays an upfront for a certain number of downloads and streams – enough to where the content producer can afford to keep making content.

The world of digital is changing things rapidly, but there are a lot of questions regarding what the viable model is for all this. It’s out there, but I don’t think anyone has hit on it yet.

It’ll be interesting to see how it all shakes out. In the meantime, I’m busy working on making productions themselves as streamlined and as efficient as it can be so that when the models DO start making sense, that we make enough to make a living, and enough to keep telling the stories, and creating the entertainment that people enjoy.