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I saw a quote recently from IFPI (DMR 2010) that claimed the global content industry was worth around 1.4 trillion dollars per annum.
At the time, I remember scoffing and haw hawing.
Yet, dear reader, I am about to show you how John Kennedy vastly underestimated the value of the Content Industry.
Copyright owners have consistently pushed for longer copyright terms.
Yet in itself, we have discovered that copyright is not a catalyst to spur innovation. It is merely the justification for litigation.
Interestingly, Copyright is designed to return to the owner (not the creator) a fee, which as well as allowing one to pay the bills, is also a form of approval rating. The more fees collected, the higher the audience approval.
Yet today, the only persons collecting fees from 57% of all audio-visual content on the internet are the carriers who charge for each byte that transits their network.
The charges range on a global basis from a few cents per gigabyte in the information rich countries like the USA and Japan, where bandwidth is plentiful and essentially uncapped; through to dollars per gigabyte in information poor countries like Australia.
On the Internet, in those countries where data is not restricted by duopoly Telco agreements and all ISP’s and carriers peer their local
content, consumer choice is driven by crowd sourcing.
Curiously, no-one has analysed the entertainment value of these P2P sourced files.
On TVU, there are the links to 356,775 television show episodes being added to at the rate of 142 new shows per day.
The ratings vary from 4.5 (very good) down to .5 or 1 (not so good).
The number of clicks next to each episode shows the popularity. (I call this TVU Ratings…:-))
A number of company’s like Vquence analyse YouTube memes and patterns.
Neilsens tell us what is popular today on free to air and cable, yet Neilsens do not measure the content that the majority of the world is watching.
Personally, I find myself chuckling with mirth equally at Public Domain episodes of “I love Lucy” and the “Big Bang Theory”, however, this may be because of my advancing years. (I actually know who Lyndon Johnston was.)
As entertainment fodder, each program in it’s own way has fed my hedonistic appetite for content that entertains.
Therefore the value of the content has a value to me as an individual. The value is the dollar amount I am prepared to commit to to be
entertained.
We calculated the value of personal leisure-time last year. For a moment we will disregard that and estimate the value of life earnings
against total life expectancy.
|
Earnings |
Years |
Days |
Hours |
Minutes |
|
Lifetime |
75 |
365 |
24 |
60 |
|
$ 1,000,000.00 |
$13,333.33 |
$ 36.53 |
$ 1.52 |
$ 0.03 |
If my life earnings are a million dollars, then I should spend no more than three cents per minute if I expect not to go into debt.
If we take into account unemployment numbers, discretionary entertainment is down to around 11%. However, for the purposes of this blog article,
let us consider that it could be as high as 33%.
If we accept that Food, Housing, Medical, Transport and Clothing represents 66% of every dollar earned, then we have a discretionary budget of
one cent per minute for our entertainment content.
That means that a song on iTunes is worth 5 cents.
A movie (90 minute) 90 cents.
A half hour TV show (22 minutes without the advertising) is worth 22 cents.)
(These fees of course need to include the download cost….)
It can be argued that items of intense interest qualify for a premium viewing fee.
However, any increase in the 1 cent per minute means that I need to forgo Food, Clothing, Housing Transport or medical.
Let us assume that I pay one dollar for a song form iTunes. I now have to listen to that song 20 times before I have broken even on my
purchase. For a popular music item, 20 replays is easy to imagine.
Let us now consider an episode of “I Love Lucy”. Assuming I paid $1.99 (Amazon episode price) I would need to watch that episode of “I
love Lucy” nine times during my lifetime to stay on budget.
Highly unlikely.
However I could “share it” with eight other people and stay financially viable.
OR…
I could purchase the content on my credit card and go into debt.
When entertainment costs mean that people are unable to eat, pay their electricity [For New South Wales people that has a whole new meaning on your electricity bill starting today….], buy clothing, keep the roof over one’s head or afford to get medical care, then one needs to reanalyze ones spending habits.
Purchasing a $75.00 Blueray DVD is just not a realistic expenditure possibility for 93% of the worlds population. Mainly because of the 125 hours (@$0.60 per) of no content viewed required to pay for the credit card debt.
Consumers have started to realise that plastic without a job is not a viable option.
The pricing of discretionary entertainment options have not yet reached realistic pricing levels. I foresee a future where the Telephone Companies distribute all content for free and collect the transit fees.
The current choices for consumers are to:
-
Go into credit card debt to be entertained;
-
Not be entertained;
-
Download from the Internet for just the bandwidth costs;
-
Borrow DVD’s from better heeled peers and family;
-
Find a cheaper entertainment alternative;
Obviously, regardless of the legislative activities being forced on our parliamentarians by industry paid lobbyists, most will elect option 3.
Not because they are pirates and not because they don’t want to pay for the content.
But because the content is not priced within their budgetary allowances.
So what is the budgetary allowance of the average person on planet earth ?
The average salary (globally) is around $(USD) 9000.00 per annum.
|
Earnings |
Years |
Days |
Hours |
Minutes |
|
Lifetime |
75 |
365 |
24 |
60 |
|
$ 675,000.00 |
$ 9,000.00 |
$ 24.66 |
$ 1.03 |
$ 0.02 |
Down 33%. I now have only .675 of a cent to spend on non essentials. (that’s nearly one seventh of a cent, not 67 cents.)
If we accept that audio visual entertainment takes up an average of four hours and eleven minutes of our daily lives, then .675 equals 166.05
per day, ($1.66), or; $1,095,930,000,000 per day.
What is the real total value of sustainable Global spend on discretionary expenditure?
$59,400,000,000,000
A valid reason to put the prices of content DOWN.
Rob Wells of UMG (Vivendi) summed it up very nicely in the DMR2010 Report;
“ We’re much closer to the utopia, where we’re extracting €1 out of a million consumers as opposed to €10 out of a thousand.”
Well Rob, very soon, all content will be on the phones. How about a buck a day from everyone on planet earth for all content ?
Great idea… before those YouTube people take-over plant earth…. 25 hours a minute of newly created content. Wow!
Fig 1. – YouTube Video Uploads
Koltai Left and Right Brain conversation:
Who gets the money from that ?
Oh, Google and the Telephone companies.
Do the Telephone companies own any content ?
Apart from Vivendi ?
Yes, apart from Vivendi.
And Apart from Time Warner ?
Yes, Apart from them also.
Does iTunes owning part of Disney count ?
Are they a Telephone company ?
No.
Then they don’t count.
So is this something that Jobs overlooked ?
It would appear so.
So with all this content, who gets the most number of viewers ?
According to Comscore….
|
* by Videos Viewed |
||
|
Total U.S. – Home/Work/University Locations Apr-10 |
||
|
Property |
Videos |
Share of |
|
Total Internet : Total |
30,317,131 |
100 |
|
Google Sites |
13,087,462 |
|
|
Hulu |
958,176 |
3.2 |
|
Microsoft Sites |
643,711 |
2.1 |
|
Viacom Digital |
383,776 |
1.3 |
|
Yahoo! Sites |
370,947 |
1.2 |
|
Vevo |
331,730 |
1.1 |
|
Fox Interactive Media |
320,372 |
1.1 |
|
CBS Interactive |
316,930 |
1 |
|
Turner Network |
304,729 |
1 |
|
AOL LLC |
237,356 |
0.8 |
And what do they watch ?
According to the recent Pew Internet Report, [N=750] the average audio-visual content consumed is…
|
% |
Aged 18-29 |
Aged 30-49 |
Aged 50+ |
|
% |
% |
% |
|
|
Comedy or Humourous Videos |
93 |
74 |
52 |
|
News Videos |
56 |
72 |
59 |
|
Educational (How-to ) videos |
49 |
64 |
52 |
|
Movies or TV Shows |
62 |
49 |
30 |
|
Music Videos |
56 |
52 |
29 |
|
Political Videos |
46 |
45 |
37 |
|
Animation or Cartoons |
46 |
34 |
15 |
|
Sports Videos |
34 |
37 |
16 |
|
Commercials or advertisements |
26 |
23 |
16 |
|
Adult |
16 |
11 |
6 |
We posted this chart last month. We include it here for ease of reference.
|
Youtube Videos |
|
|
2,000,000,000 |
Per Day |
|
83,333,333 |
Per Hour |
|
1,388,889 |
Per Minute |
|
|
|
|
730,000,000,000 |
Per Year |
|
8 Minutes |
Average Length |
|
97,333,333,333 |
Hours |
|
64,888,888,889 |
Equivalent |
|
Movie Attendances (over 9 attendances per person on the whole planet vs 1.2 actual cinema attendances) |
|
We explained that over twenty-five hours of video content was being uploaded to Youtube, twenty four hours per day.
If we compare that to all Television episodes; (we blogged this last month, chart according to IMDB here),
and;
if we allow that each Television Episode is between 22 minutes and 44 minutes average length, we could say arbitrarily that all TV episodes are 32 minutes long. On that basis, we have 27,375,488 minutes of entertainment representing 456,258.13 hours which if created by YouTube fans would be created and uploaded in 18,250.32 minutes which is only 304.17 hours or 12.67 days.
In other words, what took the various content creators globally, seventy years to create, is replicated every 12.7 days on YouTube and from the
looks of the YouTube growth curve, it is just at the beginning of its hockey stick.
If you ask me, I would say that the content horse for traditional forms of content, has bolted.
Content Creators will need to now compete with funny shorts created by the guy or girl next door.
3D as an industry innovation, is an excellent commencement. I look forward to seeing what the industry will think up next to compete with:
YouTube, Computer Games and exacerbated by a lower willingness to commit to high levels of personal debt.
Conclusion:
The future of the worlds economy is in the hands mainly of persons of whom 93% prefer short humorous videos.
YouTube is at the Genesis of a new Industry – dominated by amateur videos. Which is shaping up very similar to the earlierst days of the motion picture industry.
Koltai Prediction:
- All content will be streamed for free by 2020 chosen by crowd sourcing friends views.
- Revenues will be from advertising opt-in pop-overs.
Question to Ponder…
Who will run the Amateur Video Industry ?
Either a very large cheque book, or a brilliant new Technology.
References:
Value of the Entertainment Business – IFPI
http://www.ifpi.org/content/library/DMR2010.pdf
The State of Online Video | Pew Internet & American Life Project
http://www.pewinternet.org/~/media//Files/Reports/2010/PIP-The-State-of-Online-Video.pdf