In the mad rush to distribute video and audio content, here are 5 major hazards that threaten to derail the revolution.

By JanSteenkamp

2007 will be the year digital content companies lose billions of dollars.

I know… it’s a buzz kill, especially in the midst of this digital content revolution. But the undeniable fact is that many companies have taken a “damn the torpedoes” approach to monetizing their audio and video content in order to capture their slice of the pie as quickly as possible. But in the rush they’re making costly errors.

The appeal is obvious. With companies like Fox studios reporting that “24” will yield higher revenue from direct to consumer initiatives then from international licensing and syndication combined, companies are realizing that their digital assets represent a veritable gold mine. And they’re right. To not leverage audio and video content is to miss out on a tremendous market opportunity. The problems arise, however, when companies don’t think through the long term ramifications of their go-to-market strategy. What are the threats associated with content theft? How easy will it be to move from broadband to IPTV platforms in the coming months? Is it important to enable ad-supported content, or will a pay-per-view model suffice?

The downhill slide begins with this line of reasoning: “Our competitors are selling content to consumers online. We need to be doing the same thing to reach those consumers. Let’s just get our content on the Web now so we can begin monetizing our content today. We can migrate our on-demand services to handhelds, cell phones, and IPTV in a few months.” The reality is that underlying technologies and standards which drive the content distribution revolution are evolving at a maddening pace and companies that don’t think longer-term may have lose millions when migrating or evolving their distribution model even slightly.

 

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