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Future of Media Summit Blog
Future of Media: Panel discussion on emerging business models
A quick review of the first cross-continental panel at the Future of Media Summit 2007, which was on Emerging Business Models, featured Keith Teare, CEO of edgeio, Anne-Marie Roussel, Director – Stategic and Emerging Business for Microsoft, Chris Gilbey, CEO of Vquence, and Rob Antulov, CEO of 3eep. A few reflections on the discussion (from memory, so please excuse misquotations :-) ):
One of the themes of the discussion was whether business models are changing. Rob said that after much consideration, he’d decided that there were no new business models: the three that continued to exist were 1) customers paying directly for your content; 2) a third party paying to be associated with or incorporating your content; 3) third parties paying to distribute your content. Keith in particular disagreed, noting the new approaches possible through social media. Edgeio’s business model itself suggests new possibilities for intermediating value. Chris, a doyen of the music industry, said that it is moving to a point at which it is no longer possible to monetize music directly. Consumers are no longer prepared to pay for music, so advertising or other indirect revenue models are becoming essential. Anne-Marie talked about the web as a basis for social entertainment. People are primarily influenced by their peers in buying entertainment, and it is now possible for people to buy from or through their peers. Keith used the phrase“selling content through peer relationships,” noting that edgeio will shortly release tools for monetizing sales of content through third-parties.
There was strong support for the concept of personalized advertising, with Anne-Marie noting that it was worthless having truck or beer ads on while she was watching television, but that she would value advertisements personally relevant to her. Keith said that he values personalized offers and responds to them. In this context, he noted that for edgeio’s job ads on Techcrunch (NB Keith and Michael Arrington are shareholders in each others’ companies), Techcrunch earns $30,000 per month for 30,000 page views, an effective advertising rate of an extraordinary $1 per page, due to the highly targetted and thus effective advertising. Keith noted that there is strong interest in the models of Aggregate Knowledge and Loomia in providing personalized shopping recommendations.
Anne-Marie believed that micropayments will play a significant role moving forward, for example in paying for games for casual use. Keith said that he’d be prepared to pay for some bloggers’ content, meaning this could provide meaningful income for bloggers with sufficiently compelling content. However Chris thinks that micropayments obstruct the relationship between consumers and content providers, in much the same was as Digital Rights Management. As such, advertising and related models that can be embedded in people’s relationships are more likely to provide a workable model.
Overall a fantastic discussion with some great insights. The very diverse perspectives from the panellists gave some great fodder for those exploring emerging business models. Social media in particular is clearly opening out new ways of making money from content. The key elements of emerging business model frameworks from the Future of Media Report 2007 provides some other useful starting points, and a reference for panel discussions.