2011 – Year of the Content Provider

David MarlettBy David Marlett, Managing Director, enkHouse

If 2010 was the year of the iPad, then 2011 will be the year of the tablet wars, with new hardware from a variety of companies fighting to carve a slice out of the marketplace. And what that means is 2011 will also be the year of the content provider.

New hardware technology can’t be sold turned off and laying dormant. It needs dynamism, and that means new content that is fresh and ably demonstrates the new possibilities these devices enable. Thus, transmedia producers should also be seeing a bright year ahead. Or so goes the theory.

But beyond theory there are the practical questions, including those of client availability, staffing needs, creative design awareness, and marketing exposure. All important. But perhaps the most important question is that of profitability. Can it be done? Are we there yet, or are we still in the R&D zone with profits something to look for in 2012? Regardless of when, some are even worried whether or not it is possible at all beyond the abstract.

Can you be profitable in the transmedia space?

I am hearing that from all corners – from publishers, agents, software companies and other transmedia producers. Frankly I’m a bit perplexed by the question. Not that I don’t get it. I do. But to me the answer seems obvious: Of course there are not only profits to be made, but riches.

Heck, we should be planning that new Learjet, if you ask me.

But how so? As in the film industry, there are four keys to transmedia profitability:

  1. Pick the right projects;
  2. Choose the right elements/medium for exploiting each project;
  3. Maintain right and tight budgetary discipline; and
  4. Have a solid distribution strategy uniquely designed for each project.

PROJECTS

First, picking the right project: an art form in itself. Some publisher/producers have teams that help filter and decide, and some just go on their gut. I am of the latter group.

I know what interests me. Then we do our homework on the economic possibilities and probabilities for a project of that sort. (Please see my November column for details on this subject.) It is a careful and deliberative endeavor which requires equal doses of recklessness and spontaneity.

Picking projects is not for the timid or faint of heart, any more than it is for the unprepared daredevil.

ELEMENTS

Deciding the right means/medium for any particular project is equally critical. Some projects are much weightier than others in that, in order to justify any sort of enhancement, the enhancement itself will need to be large and possibly costly. We are dealing with that currently in our enhanced Little Black Book of Kama Sutra. But that project can ‘carry’ the additional cost burden due to projected distribution.

Reasonably large expected revenue carries larger production values. Seems logical. The question for those types of projects comes in at the balance between production values and anticipated revenue. They are proportionately related, but to what extent? Does $1.00 more in production value (thus production costs) equal $1.50 more in anticipated sales?

Without a large data pool from which to glean these answers, we are, at this point in the industry’s evolution, left to guess. On the other hand, regardless of an also large projected distribution, our enhancement of The Paraclete Psalter will be subtle and elegantly understated due to the material itself. It won’t require weighty enhancements, but a deftly light touch.

(Yes, I just compared a Kama Sutra project and a Psalter project.)

The same kind of analysis happens with all projects, from our See Jack Die series, to interactive ecookbooks, to enhanced ebooks which will spring from their bigger sibling television documentaries (talk about big cost enhancements!). Balance in all things, with a crystal ball within reach.

BUDGET

Then there are those costs, the third key element: a carefully prepared and enforced budget. The cost control elements are self-evident. But something all birth-industries must pay close attention to (actually, industries of any age) is overhead and other unnecessary cost burdens placed on stand-alone projects. Those top-heavy weights are potentially fatal to an individual project’s prospects of profitability…and also, eventually, to the viability of the entire organization.

The second part of this is budget maintenance and enforcement during the production process. Surely that is self-evident as well, so, I’ll move on.

DISTRIBUTION

Last but certainly not least, is the distribution question and its impact on the profitability of the project. Without question, with a dead distribution arm, nothing gets out, and there are no profits to be found. And this is of course quite the challenge in the transmedia space right now. But these avenues are continually widening, from Amazon and Google’s challenging Apple, to many others as well. And soon I predict a number of firms dedicated to just the distribution of transmedia products, just as such entities exist for the film and music industries.

Thankfully there is already a broad array of data being gathered for app and eBook sales. What I look forward to is enough data from the sales of enhanced ebooks and uber-Apps that we can do more accurate distribution modeling. It’s coming.

A key question here is who, exactly, in the production process, should be responsible for these distribution costs: the publisher or the transmedia producer? And if the publisher carries the distribution responsibilities and costs, should those costs be netted from gross revenue before or after the divisible net profits are calculated?

All key questions currently in negotiation across the industry.

So, it’s a new year. But not just any ‘New Year’. It should be the year of the transmedia content provider. And if we can keep to the basics and not get too ‘out there’ in our choices, we can capture and build some excellent profits along the way. Perhaps enough for a Lear.

If you do, just remember that I prefer a window seat.

One final note: See you at DBW 2011 in a couple of weeks! I hope you will make it a point to attend our session Rethinking Rights in a Transmedia World on Wednesday, January 26th, at 11:30 AM. I will be a panelist, so bring your questions. Oh, and if you want to meet up any day that week, just drop me an email at dmarlett@enkHouse.com. See you there.

Write on,

David

PS: Progress update on See Jack Die….er, uhmmm… see next entry.

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