9 Apr 2010

When Complexity Fails

This piece by Clay Shirky is a bit long and a bit academic but it's well worth the read for anyone interested in how the internet is changing complex and traditional media business models.

With the recent introduction of paywalls at News Int, AOL's inability to fund profitable growth with Bebo, and Youtube seeking new ways to monetise their offer it's a timely article which looks at the difficulties that emerge for business when expensive, complex content production models enter direct competition with simple and cheap, even free, alternatives.

As Shirky points out, the most viewed minute of video in recent years isn't a Hollywood movie clip, World Cup goal highlight or astonishing news scoop, it's a low quality amateur film of Charlie biting his brother's finger. Twice. 176 Million views and counting.

The truth of the matter is that News Int, AOL and others are really saying to us:

“Web users will have to pay for what they watch and use, or else we will have to stop making content in the costly and complex way we have grown accustomed to making it. And we don’t know how to do that.”

Interesting stuff.