State of Pay

Back in the late 90’s, when I went to the University of Hawaii at Manoa, there was a revolution taking place.  But we didn’t have rallies, or protests, or soap box speeches at the Campus Center for this changing of the guard  — this revolution was happening in dorm rooms and computer labs all over the campus.

The name of the revolution was MP3.

It changed everything.  It changed the way we listened to music, and more importantly, the way we acquired the music.  In the pre-Napster, and even pre-Gnutella (anyone remember that?) days, you had to scrum around the search engines like Webcrawler, Lycos and the burgeoning Yahoo! to find all those MP3 goodies, but they were out there, free for the taking.

The music industry  first ignored, then tried to stem the tide of MP3, once it became apparent that is was dismantling the old sales model, song by song — but for all intents and purposes, the music industry failed to bring any effective action to the situation.

Now, the film and television industries are trying to avoid that same mistake.

While the mediums are different, the situation remains similar for film and television producers.  They’ve got an old revenue generation model that is rapidly being challenged by new technologies, and a society that is pushing the envelope in terms of viewing habits, and consumption.

In all fairness, the cable television industry is being very proactive, in the adoption and acceptance of new technologies like On-Demand, and Web streaming programs.

There’s an article over at TV Week that details cable tv’s struggle to find a way to make new markets and ad models work for them.

While there is no doubt that the Web is inevitably going to be a part of our media futures, there is a huge question regarding whether or not a distribution system like the Web can actually be monetized in the same way the television was.  Take in to account this:  TV networks were able to generate $1.68 Billion from web advertising last year.  A huge number; but compare that to the $67.6 Billion they made through regular tv advertising.  Even as ubiquitous as the web is, it still generated just a fraction of the total advertising revenue the networks were able to collect.

Here’s an article at New TeeVee that explands on the issue.