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04.11.06


Buy Side Publishing

By Ross Mayfield

What are the alternatives to DRM with a viable business model for content producers in an increasingly decentralized market?

A new media landscape is unfolding, where revenue leakage does not stem from theft, but competition from participatory models and co-opetition from aggregation models.

Participatory models can be exemplified by Craigslist, blogs and Wikipedia. Users directly generate the content. Craigslist serves as a datapoint of disruption ($10M in revenue while disrupting $60M ). Blogspace is generating it's own media as conversation Wikipedia is a constructive community that collaborates to create content. Production on Craigslist is driven by both market and social signals, blogs and Wikipedia largely by social signals. The first monetizes a subset of potential posting fees, the latter is all about ME, as in Monetize Elsewhere or repetitional benefits. All benefit from superior production economies, if not arbitrage conditions between social incentives and markets or firms.

Aggregation models can be exemplified by Edgeio, simplyhired and Google. Edgeio leverages contributions at the edge of the network into aggregated listings that are complete and complicit. SimplyHired is a vertical search engine for jobs that scours the web for summaries and links. Google search provides fair use summaries in result. All monetize attention wrought through aggregation, largely through advertising market-targeted to the externalities of attention. All realize production and search economies.

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While the long bet may be that Wikipedia eats Google between these models, the game at play is between traditional media and participatory and aggregated media. The winners will balance freedom and profit-motive with social contracts that beget trust.

Quite frankly, traditional media cannot compete against participatory models.

Simon Waldman thinks out loud:
Fact one: aggregation is a fact of online publishing life - now, and even more so in the future.

Fact two: even if it's just headlines and links back to content owners sites - if an aggregator is making money from this, they are effectively making money from our content.

Fact three: there is currently no structure for content owners and aggregators to have a useful conversation about rights/ licensing etc, beyond the mutual assertion of ‘you need us more than we need you'.

Fact four: ultimately, individual aggregators dealing with individual rights holders/ content creators is unworkable for both parties.

His solution is a centralized rights agency, the solution that worked for record labels and radio stations. Unfortunately, that solution was invented in an analog era, and applying it in a digital era will lead to digital rights management.

Click here to read the full article.

About the Author:
Ross Mayfield is CEO and co-founder of Socialtext.


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