Thursday, April 26, 2007

The Commodotization of Democratisation - The Digital Tsunami

Today at the Australian Technology Park's World IP Day I had a chat to Beata Kade, the head of a company called The Art of Multimedia.

We where chatting about the work I do, and I mentioned that I can produce vodcast and webcasts for as little as 1k (30 minute shoot), she was concerned that it was so cheap and that it devalues what companies like her can charge.

She pleaded that I shouldn't charge so cheap as it conditions clients to pay as little as possible. The net effect on her firm is that clients want low budget work and she can't deliver as she has a cost base she needs to cover.

I beg to differ, for starters there will always be a market for High End Blockbuster productions, however a small market - that's work for corporate DVD's and other boring stuff.

I work with firms that want to build a large community by casting events via the Internet and vodcasts, be it for the Youth or other markets - they have small budgets and don't see any value in paying a minimum of 10k for every cast.

No matter what I do or what Beata's company does, it will not stop or slow the Commodotization of partically everything; be it video, photography, graphic art or web design, hosting and other related services.

Google's biggest effect on the industry has been the Commodotization of web advertising.

The effect of digital within the video production industry, has been that it has commdotized just about everything; ranging from Cameras, lighting, media (Tapes, Hard Drives, etc), editing software and video hosting (YouTube, etc) and other distribution methods (RSS feeds, iTunes, etc) - including production!

I think that's a good thing.

Companies refusing to service a sector of the market, i.e. the small budget in this example, will not stop or slow this trend - regardless of their cost structure.

Before digital, there was no such thing as Vodcasting or Webcasting. However now days, it is a very profitable way for all firms to use the web to build a community with out having a huge budget.

It's called Democratisation of Digital Services.

If a Firm's cost structure is not geared to leverage the Digital Tsunami, they will miss a huge opportunity.

To leverage this new order, Firms need to do either:
1. Adjust their cost structure
2. Adjust their strategy
3. Wither away


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