There are a lot of good reasons to believe that the internet is the future of the content business. From the woes of the traditional media to the evident power of internet distribution, I think it’s hard to argue that the internet isn’t going to play a prominent role in the future of content. It already is.
But that doesn’t mean that online content is easy.
A reminder of that comes in the form of the shuttering of a digital studio called 60Frames Entertainment. Backed by Hollywood powerhouse United Talent Agency (UTA), 60Frames was based on an appealing concept: produce and finance the creation of video content as a pure-play digital studio.
It seemed like a good idea at the time and thanks to UTA’s support, 60Frames brought on some big names. But 60Frames obviously couldn’t develop into a self-sustaining business before the money ran out and wasn’t able to raise additional financing to continue operations. The Hollywood Reporter explains:
Sources familiar with the company’s travails pinned the problem on the sluggish
nature of dealmaking online and on bad timing on the fundraising front. The
company was thwarted in its attempt to secure a second round of financing just
as the U.S. economy soured.
As The Hollywood Reporter points out, another similar studio shut down recently. A handful of other players remain.
While I still like the concept of the digital studio and there are usually lots of failures in new markets before somebody finds the right model, we shouldn’t pin all the blame on the economy. 60Frame’s downfall highlights what is really taking place: the content business is changing.
From the challenges faced by newspapers to the misfortunes of online properties heavily dependent on display advertising, the signs are all around us. To say that this is an offline-online thing or to blame the economy is dishonest in my opinion.
There are a lot of upheavals taking place at the same time in the content business. Consumption habits are changing, distribution channels are evolving, content producers have been forced to reevaluate the economics of their business models and the advertisers who have so often supported content production are reconsidering the value of what they receive in return.
The impact of these upheavals is more evident online simply because there was far more revenue to fall from. But make no mistake about it: the internet is just as affected.
When asked about the business of news content on the internet, Rupert Murdoch recently declared that “The current days of the internet will soon be over“. In other words, we’ll soon be dropping the ‘r‘ from ‘free‘. He may very well be right (I suspect he is) but when it comes to the content business in general, I’m confident about one thing: change is the only certainty. Those that get with it will survive; those that don’t won’t. Offline and online.
Photo credit: Silvio Tanaka via Flickr.