What's the future for digital content, creators and media companies? Part 1

“If your content cannot command more attention than it takes to consume that content, then your content has no economic value.”

I don’t think that’s a particularly aggressive statement, though some will think it such.  I think it’s a statement of self-evident facts.

For now, I am going to use a few catch-all terms and try to be consistent.  I am going to use the word “content” as a placeholder for music, movies, tv, articles… the work of content “creators”.  I’ll use “creators” as shorthand for artists, writers, filmmakers, those who are the source of content.  Finally I am going to talk about “consumers” of the content, as a general term rather than more specific words like customers, readers etc.  I am also going to try to avoid terms from economics, like marginal utility and the like, because the purpose of this series of posts isn’t to be an essay on economics, it’s trying to establish in a practical sense where the industry is going - and more importantly, because I am not an economist.



Content transactions have always been a three-way exchange of money, content and the attention of those consuming the content.  One could go further and argue that dominant media giants are structured in a way that seems to see content as little more than a value-add, to facilitate marking up the price of a limited commodity - paper, restricted electromagnetic spectrum, physical media.

That’s a creator-unfriendly filter to be sure.  However, often the more costly the physical media the higher the price.  Usually the higher the price the greater the portion of the payment is expected to be in cash not attention.  That speaks to the value the industry places on the actual content in the overall equation, when it comes to modern media companies (though of course relative value between two content items varies dramatically).

The equation varies between individual consumers, as to just how they balance what they’ll pay for any particular content item in terms of dollars and attention.  Most often consumers will part with attention before cash.  Partly because it’s easier to part with attention to a very high degree of granularity.  (Of course attention has an indirect relationship to cash in the individual’s valuation of their own time.)

The all important “surplus attention” is that attention a consumer is prepared to give, over and above the attention necessary to merely consume the content.  It is the surplus attention that is monetizeable in the form of advertising.  If you cannot command more attention, from a consumer of your content, than it takes to consume that content, then you have not produced anything of significant economic value.  i.e. if people are not prepared to part with anything of  value to you, in return for their consuming your content, then they don’t place a monetizeable value on that content.  If they won’t pay, and won’t accept with other commerce (e.g. ads), they just don’t value it.

In a free society people only pay for what they value.

This doesn’t mean people cannot be taught to value different things.  And it doesn’t mean they won’t pay for things that start out free.  Think about the busker, or street performer.  If you like what they do, and value their entertainment, you may through a few coins in the hat, a couple of bucks into the tipjar.  Most people can learn to say thank you in this way for content they consume that they value highly.  That’s what explicitly paying for content is.  For other situations there’s the mass-market approach to content funded via advertising based on forced interruption.  Either you pay cash, or you pay surplus attention.

Next… the government supported attempts by industry to force a transaction where people don’t value the content…