digital distribution does it different

8/8/2019 Digital Distribution Does it Different

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Richard NevinsWriting for Publication

Digital Distribution Does it Different

In the age of the telecommunications and the Internet, material media has been

outflanked. Forms of media such as newspapers or DVDs which require a physical

substance in order to be consumed cannot compete commercially with digitally

distributed media because of the investment in manufacturing costs (printing presses,

DVD burners) as well as the more extended distribution schedule (production,

manufacture, distribution, retail) of the traditional distribution method.

Digital distribution, that is the delivery of immaterial media content through New

Media forms such as the internet, has a competitive advantage over traditional

distribution because of the characteristics of the digital medium. An immaterial computer

file can be duplicated indefinitely without losing quality, in contrast with traditional

material media that loses quality with successive generations of copies. One consumer

can access an immaterial digital copy of media content without denying another

consumer access to that same content. Materially delivered content has a finite number of

copies, and distribution decisions can cause shortages in areas where demand was not

accurately estimated. Simply put: digital distribution can more easily and more quickly

deliver desired media content to consumers than traditional material distribution.

While the ultimate domination of digital distribution appears inevitable, further

reinforced daily by new developments, the Old Media guard continues to cling to their

outdated models of distribution because it fits their existing profit model. This was

evident recently in the Recording Industry Association of America (RIAA)’s attempts to

stop digital distribution of music through the internet and peer-to-peer programs by filing



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thousands of lawsuits against media consumers. Instead of embracing digital distribution

at the outset and establishing legitimate distribution venues (such as the now-lauded

iTunes by Apple and other services), the industry’s traditional belief that music could

only be delivered by physical media sold in retail outlets reacted violently once it

encountered this new means of distribution. The RIAA mistakenly directed its anger at

the tech-savvy consumers, instead of its own internal distribution department that failed

to keep up with technological trends.

Material Media vs Immaterial Media

The limits of material media lie in its post-production distribution model. Both

traditionally and digitally distributed content is created in more or less the same

production process. Once that process is complete, immaterial media can be made

available to consumers within minutes. A newspaper or a book, on the other hand,

requires investments in paper, ink and printing facilities, delivery trucks and time, among

other costs. If the newspaper or book is produced on a digital medium, whether it is typed

out using a word processing program or laid out with design software, why must it be

forced to travel back in time to the mechanical age in order to be printed and distributed?

This process incurs unnecessary costs in both the manufacturing that creates the physical

media object and the distribution, which requires the transportation of books or

newspapers by truck, ship, plane or rail to retail operations. Digital media can be

delivered by the producer directly to consumers on demand.

The creation of physical media also requires the producer to speculate on the

relative demand for their media content, opening the door for inefficient decisions. If too



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many copies are printed, then the producer must swallow the loss created by a pile of

unsold copies. If too few copies are printed then further costs are incurred by subsequent

printings. Bulk orders require furnishing discounts to some consumers, creating a system

of price discrimination that encourages some consumers to find alternative methods of

acquiring the content. Compounding the problem, scarcity can create a secondary market

for unauthorized copying that does not benefit the producer (this market usually operates

through internet auction sites and other digital means, naturally). With digital

distribution, there are never more copies made than requested, and never too few

available. Digital copies are made at the time of purchase and are not limited by any

physical demands short of available server bandwidth and compatible digital media

devices.

Consider the enormous worldwide market for illegally copied DVDs and internet

film downloads on peer-to-peer networks. In the lead up to the major blockbuster release

of Spiderman 2, Sony (the producer and distributor of the movie) pulled out all of the

stops to maintain the security of their content prior to the release. They searched the

Hollywood insiders who were invited to early screenings, and even made the actors,

agents and film critics walk through metal detectors before they were shown the film’s

premier. While the film was not leaked onto the internet before the scheduled release, a

pirated copy was uploaded within four hours of the first public screenings, and pirated

DVDs were found for sale at markets in far-flung places like Israel, Hong Kong and

South America within a week, according to the New York Times.

No film studio could ever hope to spread their product so far across the world so

rapidly using their traditional methods of distribution. Why, then, do studios remain



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married to a system in which their DVDs come to the market months after street

merchants have begun selling the same content for less?

Imagine the digital debut of a film. Instead of the video being illicitly uploaded

four hours after the first screening in a movie theater, it is streamed from the content

provider’s website or through some proprietary distribution software simultaneously with

any screenings in cinemas, and can be viewed at any time following. In this way the

studios can realize the promise of digital distribution: freedom from a fixed physical

location. Consumers do not need to travel to a movie theater to enjoy content, and

consumers in towns that lack a cinema needn’t feel cut off from media culture. The film

does not need to be seen at a particular time of day, and can even be seen in the middle of

the night (this would likely be one of the most profitable periods of the day for

distributors). Consumers would no longer arrive 10 minutes late to the movie, they would

choose the time of the showing. What the consumer is purchasing, in fact, is a specific

amount of time to view the content at their leisure, not unlike current video on demand

services offered by most cable service providers.

Now we are seeing an increased ability for consumers to bring their media content

with them. Digital media files are stored on various devices and gadgets (including the

dominant iPod) and can be consumed on the go. They are not limited to places that are

equipped with media displays (such as television monitors or speaker systems), as these

are built into the gadgets themselves. While there appears to be a market for these small

screens (Apple announced that they had sold 1 million videos through iTunes within a

week of launching the new video service), it seems necessary in the future for there to be



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some means of wireless interface between larger screens suitable for group viewing and a

portable media device which provides the content.

The danger of digital content providers allowing users to download media data is

the heightened risk of illegal copying. For all of the efforts of software engineers to

design a digital media file that cannot be duplicated, there will be legions of crackers

racing to be the first to break the code and release the content to the internet. Because of

the way that computer programming works, it is very difficult to engineer a hurdle that

cannot be reverse-engineered by further programming. The best way to keep crackers

from breaking the security code of the media data might simply be to refrain from

releasing the media data directly to consumers.

Content providers will have to make important decisions as to whether they want

to sell digital content to consumers or simply sell access to that content. For large media

corporations, they may find that it is more profitable to hold their proprietary media

content on their own servers and simply license access to it. In this way, the user will be

able to consume the content without being entrusted with a copy of the immaterial media

that might be illegally copied. Streaming video will allow content providers to retain

something of the ephemeral nature of television broadcasting, for example, which

captures viewer’s attention because of the knowledge that an image will soon vanish. The

difference will be that although the video will disappear once it has concluded, it will be

accessible again at the click of a button, instead of having to wait for some distant

rebroadcast.



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While it is a relatively young field, digital media distributors have come up with a

number of profit models in order to market their media content through the internet or

other digital means. One of the most common models is the subscription model.

Digital content providers may decided to provide two options – a ‘rental’ of a film, which

is available for a specific amount of time to a consumer, and a purchase of the film. The

two choices reflect different understandings of the nature of content distribution. In one,

the consumer has the right to “own” their media content. After purchasing media content,

they can consume that content when they want and as many times as they want without

restrictions. This is the privilege that a consumer pays for when they purchase a DVD or

CD. Critically, consumers can also enjoy purchased content in an ‘off-line’ setting, that is

without being connected to the content provider.

However, the idea of ownership of a copy of media content is strictly associated

with the regime of material media. Consumers own DVDs because they want to be able

to watch a favorite film or other media content whenever they want to put it into the

DVD player. But if the very same film is available at any time from the rights holder,

then why does a consumer need to maintain possession of an antique of material media?

Indeed, while consumers like to think that they ‘own’ their movies, all that they really

own is a plastic disc and a license to view the contents therein. It is clear that the role of

material media is slipping away, and the private video collection will likely fade away

with it, replaced with comprehensive access to proprietary digital media libraries.

Just as television’s ephemeral nature was captured by the VCR, so can streaming

content be recorded if a user is sufficiently devoted to this goal. The difference between

taping a television show on a VCR and recording a streaming video lies in its utility. The



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demand for the VCR’s time-shifting ability (which allowed a scheduled program to be

watched at a time other than its broadcast) existed because a program was broadcast only

once, requiring all viewers to be able to commit time to its consumption according to the

broadcast schedule. With streaming video there is no broadcast schedule; the content can

be accessed and viewed at any time. For this reason, the utility in recording a streamed

video is different than recording a VHS tape of a primetime television broadcast, and is

more likely to be concerned with illicit copying and black market distribution than

personal viewing. The only way to effectively combat illegal copying is to remove

barriers to delivering immaterial media content effectively across multiple mediums at

once, reclaiming the illegal copier’s customers through superior timeliness and delivery.

If a consumer would pay a small fee every time to watch their favorite film at any

time, then there is no need for the consumer to have a digital or physical copy of the film

or for the media content rights holder to release the media data file. This streaming of

media content could stem rampant copyright infringement that has plagued material

media distribution. Some content distributors already stream their content to consumers,

including many news websites like CNN.com and even the New School. Film studios

could follow this example. Illegally copied films, which are mostly produced illicitly in

China, are delivered to production centers through a digital medium and then written onto

material media (DVD’s) to be sold. If the original producer released their content

digitally, consumers could get the film from them before illegally copied DVDs even

reach the market.

Because of these intellectual property concerns, it appears that large scale digital

content providers should prefer the streaming model, which would better allow them to



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maintain the security and control of their content while simultaneously providing

consumers with a wealth of content to enjoy at their convenience. For the streaming

model to work, providers must maintain a varied (and arguably comprehensive) roster of

available content for consumers. The goal of digital media distribution is not simply to

remove material or broadcast media; it is to digitize it. Ideally the entire catalogue of a

media content provider would be digitized and consumers could select a classic film just

as easily as they could choose the latest summer blockbuster. There could be a graduated

price format, where accessing a selection from the archive costs more or less than a

current offering, as in newspaper website archives, but the economics remain to be seen.

What is clear is that digital media consumers are growing tired of being made to

conform to a content provider’s broadcast schedule. Given the alternatives that exist, why

should a consumer schedule their time according to the broadcast of a favorite television

show when that television show can be downloaded from the internet and watched at any

time? That this practice is illegal has not stopped a large portion of savvy consumers

from adopting it, and it should go to show the media producers the potential profits to be

made in the market for on-demand digital distribution of media content. Customers want

to be able to consume content according to their own schedule. If content providers adopt

a distribution model that allows consumers to do this, then they will profit. If not, then

the consumers can always turn to digital video recorders or the internet. Content

distributors are not going to beat New Media by continuing to employ their old strategies,

like a World War One cavalry charge into machine gun fire. You cannot win tomorrow’s

war with yesterday’s tactics. Companies need to adopt New Media solutions to confront

New Media challenges.



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Consumers as a whole are beginning to buck broadcast schedules, but they have

not yet abandoned them. A recent report on the use of Digital Video Recorders (DVRs)

issued by the six major American television networks concluded that households with

DVR’s watched more television than those without. This reassured concerned network

advertisers who were worried that the introduction of DVR’s into the market would

destroy the traditional television advertising model. Respondents reported that they

watched the majority of programs at the scheduled time, but recorded some shows

(usually high profile primetime programs) to watch at their leisure. This ability to watch

shows at any time was first introduced to consumers by a product called TiVo, which

brought the notion of “time-shifting” (the practice of watching a broadcast at another

time, previously limited to the infamously confounding programmable VCR) into the

digital era.

As technology has progressed and data storage capacity has grown according to

Moore’s law, relatively small devices can now easily store outsized amounts of media

data. This has led to the development of portable devices that can hold 10,000 songs or

the USB flash memory sticks that can hold a gigabyte of information on a gadget that is

not much larger than a pack of gum. Eventually, the relative storage capacity of these

devices reached a point where that the memory-heavy task of saving hours of video

content can be made profitable. A DVR is basically a large hard drive, which uses

proprietary software to record video through a cable input. Most DVR’s also provide

various services through their software that provide television schedules, and even record

programs based on a user’s previous choices.



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DVR’s offer an important marketing capacity, as they can tailor advertising to

users based on the channels and programs that they watch. Some DVR producers, such as

TiVo, have begun experimenting with selling advertising space within their highly

popular fast-forward function, which most consumers use precisely to avoid

advertisements. The advantage of DVR’s in collecting marketing data over traditional

methods like the Nielson Ratings is that the DVR’s record every show that the consumer

watches, instead of relying on a consumer to honestly and comprehensively fill out the

survey without omitting programs that they may be embarrassed to admit or adding

programs that they would want others to believe that they watched (PBS has long

maintained that Nielson respondents over-represent the amount of public television

programming watched). This is another example of the strength of the interactive nature

of digital media distribution, wherein the use of a digital user-interface necessitates

measurable consumer input. This in turn provides a more accurate (and thus more

valuable) marketing profile of the subscribers.

Whenever a user pushes a button on their TiVo’s remote control, they are

inputting data that can potentially be converted into valuable marketing information. The

programs that a user selects to record instruct an advertising algorithm that has access to

databases profiling viewers of individual television programs, as well as time of day,

physical location and other information that can be used to refine the marketing profile of

a consumer for the benefit of targeted advertisers. Because TiVo controls the interface, it

can require users to ‘click-through’ dialog boxes, or to make a selection based on several

choices, which provides further insight into the marketing profile of a user. The TiVo is

always connected to a central server through an internet cable, which allows the service



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provider to see real time data on the viewing habits of users, adjusting directed ads and

programming suggestions on the go. Compared with the traditional broadcast advertising

model, TiVo provides advertisers with a plethora of information about their users, which

allows them to target with more precision, increasing the value of the ads to both TiVo

and their clients.

This issue of time shifting raised by DVR’s has fueled the growth of on-demand

services from cable television providers. While TiVo and other DVR systems played a

crucial role in spurring innovation amongst cable providers, they are not likely to have a

lasting presence in the face of competition from on-demand services. Cable providers can

simply do a better job of providing access to on-demand content than DVR’s, because the

content must be broadcast or transmitted by a content provider before a DVR can record

it, while an on-demand system would supplant broadcasting as we know it, rendering

TiVo redundant. Instead of broadcast times, a media content provider would have a

release date of content. Following that debut date, the content would be available at any

time through the on-demand service and perhaps other outlets (such as an internet

distributor like iTunes). A strong system hoping to replace material media content

delivery would archive shows to maintain their availability for as long as they met a

minimum threshold number of hits in a period.

Current on-demand structures, however, only provide a small selection of content

for consumers to choose from, which begs the question of what would be the result of a

content provider making all of their media available on demand. If all of the content of

Time Warner, for example, were available on demand, would it make any money? Are

the costs of digitizing entire archives of films and television programs so large that they



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cannot be recouped by revenue generated by selling access to that enormous store of

media content?

While the initial investment in digitizing content will no doubt be substantial, the

long-term revenues are as assured as long as consumer interest in media content

continues. Through this digitizing process, producers will be able to profit from any or all

of their content catalogue at any time, instead of limited to displaying one show per

channel at any time. More people will be watching more different shows which will

result in more money being paid for more ads by more clients.

Metropolitan WiFi vs Wireless (Cell Phones)

At this moment there are several experiments in providing wireless internet

throughout an entire metropolitan area. The outcomes of these experiments (in New

Orleans, San Francisco, Philadelphia and elsewhere) may help determine the promise of

digital media distribution. Although there are patchwork WiFi networks across some

tech-savvy urban areas, and there have been some attempts by the private sector to install

infrastructure in public areas (especially parks, train stations and airports), a

comprehensive metropolitan WiFi network would allow for enormous growth in the

potential of digital media distribution.

The creation of a comprehensive WiFi network in a market would have enormous

consequences for digital media distribution, further removing the consumer from a fixed

physical space. At the same time, the dynamic nature of a mobile media consumer lends

itself to many applications based on a temporary sense of location. A user on

metropolitan WiFi walking down the street might receive an advertisement for a coffee



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shop that they are approaching, for example, and it might include a coupon attachment to

further encourage patronage. In a public emergency, WiFi users in an affected area could

be delivered information and instructions, perhaps even an attached map that

recommends an evacuation path based on the user’s location within the WiFi network. A

network that is synced up with metropolitan transportation systems could have

information on approaching trains or buses, closed stations or service changes distributed

digitally to consumers based on their location.

Although metropolitan WiFi is still in experimental stages, there are other

wireless services on cellular phones that can offer similar New Media solutions. Real

Simple Syndication (RSS) allows consumers to sign up for information streams that are

distributed via cellular networks to phones and other portable data devices. RSS and SMS

(cell phone text messaging) have already proven themselves to be useful in

communication amongst large groups, quickly and efficiently distributing information to

a wide network. New Media advocates never fail to note the role of SMS in the downfall

of the Indonesian dictator Suharto, where anti-government factions organized enormous

protests using the free SMS text message service that had been introduced in the country

to spur interest in the cell phone market.

Sprint and other wireless cell phone carriers have recently introduced their video

delivery options with much fanfare. Ads promising streaming sports scores, gossipy

tabloid-TV clips on Hollywood stars and breaking news reports have appeared on cable

television. This might be all for naught. If metropolitan WiFi becomes a reality it is the

cable providers, servicing the WiFi network, that will be delivering portable video

content (along with any other immaterial media) to consumers. The phones, or other



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portable media devices, could also operate through the metropolitan WiFi network

utilizing Voice over IP (VoIP) technology, another example of digital means supplanting

an existing infrastructure.

Cell phones, particularly the 3G (third generation) models that are popular in

Europe and Asia, but have not caught on with the same enthusiasm in the United States,

play an important role in the future of digital media distribution, but have other limiting

concerns such as relatively lower data transfer rates. Still, cell phone networks’ coverage

is at a level now that metropolitan WiFi can only aspire to, and the industry is enjoying

an enormously booming market. Nokia, the world’s leading manufacturer of cell phones,

announced that they had sold more than 800 million units worldwide in 2005. As a figure

of comparison, Apple sold about 35 million iPods in the same period.

Cell phones now operate on the digital plane, connecting users to the internet and

email through wireless telephony and other technologies like Bluetooth. While it is not

certain at this moment whether it is digital cell phone signals or wireless internet radio

signals that will provide the bandwidth for delivering immaterial media, there is no doubt

that an increased immediacy of delivery and freedom from the fetters of physical location

is demanded from New Media. Whether it is metropolitan WiFi that devours cell phones

or the other way around is not necessarily of consequence for the consumer. What is

important is that they will be able to deliver the service and content that consumers

demand.



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Content Distribution Profit Models

There was once a time when nearly all web content was provided for free. Now it

is usually split into one of three types: subscription content, advertised content and free

content. Some sites contain a combination of types, sometimes offering the latest content

for free and requiring a subscription to view archived content or vice versa. On many

sites subscriptions simply provide access to content, they do not always remove

advertising. Many sites require registration, which provides an opportunity for the

content provider to learn more about the consumers, which it can use to increase

advertising revenues. Still other sites provide content for free and are supported by a

foundation or donations, or else are operated by volunteers or as a hobby.

The business model of advertising on the internet is at it’s base no different than

advertising on television or in a newspaper. Media content captures the attention of

consumers, and advertising takes advantage of that attention to promote their products

and services. The goal of commercial advertising is to reach as many potential consumers

as possible and convince them to buy something. To the extent possible, advertisers

prefer to direct their ad’s to populations that they expect to be interested in their products

and services. This is generally accomplished by choosing media content that is somehow

related to a field or interest of the desired advertising demographic, for example

advertising a financial services firm in the business section of a newspaper. Despite these

preferences, in both material and immaterial media, volume counts. The more people you

can attract with your media content, the more money you can make by selling ads.

But how much money? How do advertisers make decisions about the value of

associating their product with media content? Vanity Fair, a leading taste-making



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consumer magazine, charges more than $100,000 for an inside-cover advertisement, but

how do advertisers know if this is a sound investment? In traditional print media, it is the

circulation figures that dictate ad rates – how many copies of the magazine will be sold?

In television, the ratings determine rates – how many are watching? On the internet it is

usually traffic, which is measured in unique hits, that dictates ad rates – how many

consumers have visited this website? Each unique hit represents a different Internet

Protocol (IP) number, which is the identifying number that an individual computer is

assigned when it connects to the internet.

But digital mediums such as the internet can take advantage of advertising in

ways that other traditional media cannot. Advertisers on traditional broadcast television

purchase time on networks based on a very broad profile of the consumer they want to

target. They have no choice, because a network broadcast does not differentiate between

a teenager and a senior when it transmits content, even though those two consumers

respond to very different product marketing. Network television advertising is based on a

take-it-or-leave-it model that manages to function because of the raw volume of people

watching it. From the advertiser’s perspective, however, it is not an ideal model. Most of

the people who will see an ad are not likely to be interested in the product and indeed

may not be the targeted audience of the ad, yet the advertiser has to bear the financial

burden for that consumers boredom.

Network broadcasts are a one-way signal. There is no back-and-forth between

consumer and the distributor, so the broadcasters themselves know almost nothing about

the people watching their content. All that the networks know about their consumers,

they learn from Nielson ratings, which despite their best efforts are only speculative when



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compared with the marketing information retrieval systems available to digital

distributors. Although producers of physical media such as newspapers generally know a

good deal more about their audience than network broadcasters, their product shares the

take-it-or-leave-it characteristic – you cannot bargain over what information has been

printed in a newspaper.

Digital distribution is a two-way interface and it provides the mechanism for

consumers to provide a great deal of marketing information about themselves. Digital

content distributors collect information from their consumers through registration and

surveys (both of which are quickly and easily accomplished through a web browser) and

also receive some valuable information in the standard exchange of data by the user’s

web browser and the content provider’s server software. Among other things, distributors

can see what website a consumer was looking at before they accessed the server, what

websites referred consumers to the server and also data about their Internet Service

Provider (ISP) and their geographic location which can suggest various profiles including

income. These various bits of information, assigned to a unique IP number through

cookies downloaded by the web browser, can be triangulated to create a marketing profile

that is markedly more accurate than the hopelessly broad advertising profile of a network

broadcast consumer.

This information is not limited to user input from forms and surveys. Following a

consumer’s progress through a webpage can create a marketing profile. If an internet

news website finds that the user tends to click on news items that follow a trend, then

marketers can direct advertisements that match the consumers interests as expressed by

the articles that they choose to click. If a user displays an interest in health related



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content, for example, then they would see more ads for medication, health insurance and

medical services. If the user was mostly interested in sports content, they would receive

targeted ads from companies offering sporting equipment, event tickets or trading cards

With this detailed information on the profile of a consumer in hand, the content

distributor can go to an advertiser and demand a higher price for the opportunity to

advertise to a consumer who is more likely to be interested in their product. This is not a

new kind of marketing. A more detailed consumer profile has always yielded more

advertising revenue, and it has also led to the development of more diverse and

specialized content distributors who aim to capture a given market. That’s why you see

more ads for athletic shoes in Sports Illustrated than in Architectural Digest. Advertising

specialization will simply be further enabled by the ease of information exchange and

more detailed marketing profiles on the internet.

This exchange of information is the crucial marketing advantage that digital

distribution holds over traditional methods of distribution. Ultimately it benefits the

advertiser, the consumer and the distributor alike. The advertiser is pleased because their

ads are targeting consumers who are more likely to purchase their goods, and consumers

are more satisfied because they are seeing advertising that is relevant to their interests.

The content distributor, of course, reaps the most rewards with increased advertising

revenues brought by the targeted advertising.

Unless traditionally distributed media content finds ways to similarly narrow

down their marketing profile by soliciting information from their consumers, digital

distribution lays poised to overtake traditional distribution shortly as the preferred

medium for advertisers to communicate with consumers.



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One method that has been attempted with some success involves content

distributors selecting consumers, instead of the other way around. If a content provider

can select their audience, they can spell out the marketing profile according to their goals.

This model may only function in certain under certain conditions, but there are sufficient

examples available to suggest that this method has a viable future.

Absolute Magazine is a New York City luxury lifestyle magazine that targets the

richest people in the New York area. Absolute Publishing combed various databases,

including luxury car and boat registrations, charitable donation tax reports and property

tax value tables to create a list of 60,000 consumers who fulfilled the minimum threshold

of a $500,000 yearly income ($1.5 million if including real estate holdings). Having

compiled this list of highly affluent subscribers, Absolute is able to demand high rates to

advertise to this valuable consumer market. The advertisements are mostly for luxury

goods, including high fashion, jewelry and cars, and the advertisers are comforted by

knowing that only people who can afford their products will be seeing their ad.

Another magazine (a traditionally distributed medium) that has operated under a

similar structure is Vice. Vice is a magazine aimed at contemporary urban youth culture

and fashion. Vice enjoys recognition as an important taste-maker in the coveted 18-35

advertising demographic, which gives it influence in directing consumption by

determining what is desirable or cool. Because Vice has gained such a reputation as a

tastemaker, it can demand a higher rate from advertisers. Vice makes so much money

from advertising revenue, in fact, that the magazine is distributed for free to consumers.

This likely further contributes to the magazine’s unconventional or subversive cachet as a

taste-maker.



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The tastemaker has a role of enormous importance in the distribution of digital

media and the marketing of products, as they serve to deliver consumers to content

distributors. This role is the same as that of the critic who advises which books, movies,

cars or other products to consume based on various attributes (cultural, political,

economic and others, all of which can be broadly understood as a marketing profile) of

readers of the publication featuring the critic. The difference in taste making in regards to

digital media is that through the use of hyperlinks and the interconnectedness of the

internet, a taste-maker can provide a direct link from their critical analysis of content to

that content’s point of distribution in one click.

The tastemaker is a content creator of its own, albeit one that relies on other

media content to survive. In the digital world, tastemakers have the opportunity to further

benefit from their work by becoming brokers of digital media. Imagine a system wherein

a tastemaker directs consumers to a content outlet, then collects a fee from that distributor

for bringing in customers. This is similar to a referral-based internet advertising scheme

(a website is paid a small sum for each time consumers click on a clients ad) or to use an

example from the analog world, it is much like the party promoter’s role in the nightclub

scene, bringing a large group of paying customers into the marketplace in order to secure

free consumption for the promoter or broker. Some may suggest that this practice of

delivering consumers would somehow compromise the critic, but it is no more

compromising than the appearance of a full page advertisement for a film on the

adjoining page of a critical review of the same film in a newspaper. The click-through

link is not contingent on a favorable review, all content that is featured would include a



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means of acquiring the media in question as a service to readers. This is akin to a

newspaper printing cinema show times and locations.

This more or less happens already in an unofficial capacity on blogs. There are a

wide range of blogs, from the amateur to the professional, but all of them function in at

least some degree as tastemakers, directing readers to media content and providing some

evaluation of the merits of that content. Marketing towards blogs has become a fast-rising

trend and several different methods of providing access to content, as well as regulating

the role and interference allowed by advertising, have been proposed.

The relationship between the taste-maker and digitally distributed media is mixed,

because in many ways digital distribution undermines the role of the tastemaker yet at the

same time it begs for critics to make sense of the plethora of content. Under a regime of

digitally distributed media, the options for media content are multiplied by such a large

factor that a taste making concierge or guide is essential in finding content that pleases.

Confronted by such a press of content, users seek out a guide to connect them with

agreeable content. At the same time, the more egalitarian aspects of digital distribution

(there are very low barriers to entry in digital distribution) create such a complex map of

media content that many consumers decide to become tastemakers themself. Thanks to

the two-way interface and the ease of communication between consumers, the role of

material media institutions as the arbiter of valuable media content appears to be

diminishing. There are so many voices that none can be heard above the others, and

claims of legitimacy based on a position in the previous traditional mechanical media era

is tenuous at best.



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But how is immaterial content collected and indexed? Some websites that traffic

in user-created content (such as Shockwave Flash cartoons, games and amusing or

digitally altered photographs) simply post content in the order it is received. This is

strictly for practical purposes of getting as much content online as possible, and leaves

the considerable effort of sifting through such a pile of content to the consumer. While

this is a truly egalitarian model, it can easily overwhelm a consumer and may keep the

best or most popular content from being appreciated by as large an audience as possible.

Other sites employ various types of grading systems, where users (who sometimes have

to be registered with the content distributor) can rank content relative to the rest of the

available offerings and the highest rated float to the top while the lower rated content is

relegated to the bottom of the page.

Slashdot, a popular website for internet news, information technology topics and

various subjects related to digital culture, operates with a prestige function. Users are

encouraged to contribute news or features to the site, and the rankings that other users

assign to their contributions reflects on the standing of that user. The greater digital

respect a user has accrued, the greater precedence their contributions are given. Another

website, Newgrounds, which is a clearing house for flash videos and games that has been

operating for over 10 years, gives users with higher standing greater weight in voting.

These methods are ways for consumers to play an important role in determining the way

in which content is displayed for them, and also allows the content provider to minimize

any editorial staff necessary to curate or select content, instead allowing consumers to

choose for themselves.



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Many veterans of the internet often lament the changes that they’ve seen over the

years on the web. It is not uncommon to hear complaints about the commercialization of

the internet (indeed some states are beginning to debate the value of an internet sales tax

which is leaving e-commerce agents wringing their hands) and the loss of the relative

freedom of the ‘good old days’. This notion is strictly romantic – even if websites

generally didn’t charge for content in 1991, dialup internet access was charged by the

minute, which resulted in bills from ISPs that dwarf standard consumer ISP bills today.

The costs have simply shifted from the Internet Service Provider to the content providers.

Nevertheless, there is a strong sense among many internet users that content

should be, and could be, free. To what extent is this possible? Most free content providers

use advertising to cover the costs of building and hosting a website, but could it be

possible to create a business model based on the tastemaker’s referrals to provide free

content without additional advertisements? That is the $100,000,000 question.

The closest thing to this model can be found in the search engine portals like

those operated by Yahoo! and Google which are heavily subsidized by advertising.

Despite the use of ads, these portals have taken several steps towards the model of

immaterial media broker. Firstly they have worked out partnerships with media content

creators like newspapers, wire services, television networks and even blogs. Content from

these clients appear regularly on Yahoo’s main page where Yahoo’s consumers then click

it to read, view or listen to the content. The client’s chief digital distribution outlet

(usually a website) is also linked to from within the content (not on Yahoo’s front page).

Yahoo maintains a staff of its own content creators who write news stories, put together

features like the Buzz Log (which follows internet search trends) and produce other



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special content projects. This proprietary content creation is a mistake, as it creates

further costs for Yahoo in the form of salaries, office space and other expenses. A true

free media content broker need not produce any content on its own (beyond a marginal

length of copy on the website), it should be able to survive on the content of its clients.

The key to achieving freedom from advertisements lays in changing the idea of

what it means to be an advertisement. In a broad sense, the tastemaker’s website is

nothing but an advertisement for digital content. Instead of a taste-making website editor

writing about their thoughts on a given piece of content, the digital free content concierge

would provide the content itself for users to consume. This is accomplished by working

out partnerships with media content providers (as Yahoo and others have done) to

provide a “free sample” of their media content to us, in order to attract more customers

for the provider. In this way, the content becomes an advertisement.

For example, imagine a television network launching a new primetime series.

Given all of the subjects that have been discussed up until this point, the network

executives are looking for a way to digitally market and distribute their new show. They

approach our digital free content concierge and work out a deal: the pilot episode of the

show will be streamed for free on the third party concierge website with a fee paid by the

network for each time the content is accessed. After consumers have viewed the content,

they are forwarded to the television network’s content distribution page that then allows

them to purchase further episodes or the entire series.

Here is another example. A leading daily newspaper irons out a deal with our free

content concierge where every day the headline story as selected by the paper’s editors

(or perhaps based on a marketing profile of returning consumers) will be run in its



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entirety on the third party website. After the consumer has reached the bottom of the

story, they are forwarded to the newspaper’s website where users can continue to browse

content. Or perhaps a women’s fashion magazine will provide the content concierge with

a spread of the season’s clothing lines. Users can view the same high resolution photos

that are contained in the print edition of the magazine as well as on the proprietary

website, and they will be forwarded along to that website after they have viewed the last

photo. The idea is to feature as many types of media content as possible, and to have the

options continually updated, as a blog would be. Content providers can pay for a one-off

listing, continuous updates, a daily feature at the top of the list or other options according

to their goals and budget.

The main hurdle to this model is simply providing enough content to enough

users and building up a base of consumers who use the service. This is essential before

large clients are likely to sign away the use of their content in this manner. One possible

solution is to introduce the service to an existing internet portal which already has the

audience, the brand name and the business acumen to attract high end clients. The danger

in this is that portals are heavily tied to advertising revenue and it might be difficult to

persuade business leaders to abandon standard internet advertising.

The innovative approach to a new kind of advertising (content as advertisement)

is an example of the kind of thinking that digital content providers need to keep coming

up with. The digital playing field is constantly reconstituting itself and new developments

are happening every day. The further these developments push the cutting edge away

from the Old Media guard, the more opportunities there will be for New Media to move

in and appropriate the distribution business from them. The old guard is still in a



broadcast mode, where they send out a message expecting consumers to take it. Now,

consumers are opening up the interface to media distribution and sending the old guard a

broadcast of their own: give us the media we want, when we want it, and you better like

it.

digital distribution does it different

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