Digiclusive
A new generation of content creators, content marketplaces and content consumers today have taken the full-leap to go exclusively digital. Some consumers have “cut the cord” on their cable subscription for TV, sold their CD and DVD players and they purchase and consume all their content exclusively digitally. This ‘letting go’ of physical content has been enabled by digiclusive distributors like Hulu and iTunes that only distribute digitally. The work they do in making all content available digitally (including AC/DC) allows more people to cut-the cord on physical content consumption. And the greater the audience for digital content, the more it becomes possible for all content creators to symmetrically cut-the-cord to physical content production (CDs, Books) eventually.
While, many are familiar with the larger story of the rise of iTunes Music, to become the #1 Music retailer in the world, not many are familiar with the sub-plot of digital-only content on iTunes. “iTunes Exclusive” was the name given to content that was only available through iTunes, and given the dominance of iTunes in digital sales, it may as well have been called “Digital Exclusive”. In 2007, for the first time ever, an iTunes Exclusive song debuted in the Billboard Top 10. The track was “I’ll Stand By You” performed by Carrie Underwood during that week’s American Idol charity episode. This song would have never made it to the Top 10 without digital distribution as offline distribution in retail stores would have taken months. And with this, the rise of the “Digital Exclusive” began.
The “Digital Exclusive” isn’t unique to Music. In 2007, Amazon released the Kindle and 2009 Marked the release of the first Kindle-exclusive book with Stephen King’s UR. Today, 27 of the Top 100 Kindle books are Digital Exclusive under the Kindle Direct Publishing Program.
In the world of TV , where production costs are quite a bit higher than with Music and Books, the birth of Digital Exclusive has only just begun. Hulu launched an original sitcom called “Battleground” and a reality show called ‘A Day in the Life” earlier this year and many more are slated to come. Netflix just released House of Cards and Orange is the New Black as Digital Exclusives last year. High production costs ensure that film will be the slowest to adopt digital exclusive, but the early signs are positive. Direct-to-VHS has now morphed into Direct-to-iTunes and in 2011, the Polish Brothers’ admittedly low-budget film titled ‘For Lovers Only’ became the first profitable feature-length Direct-to-iTunes product.
The promise of digital in the world of content is significant. Content creators get to avoid the significant production and distribution costs of physical media like DVDs, CDs, etc when they move to digital content. They can also move to online-exclusive advertising for their digital-exclusive content. Not only is online marketing capable of being much more targeted; consumers that see an ad for digital content are just one click away from previewing it, purchasing it and another click away from consuming (viewing/listening) to the content they purchased. This immediacy allows for online marketing to be far more measurable and deliver a greater ROI than its physical counterpart. The symmetry of using digital advertising to market digital content is a potent combination.
Content Diversity
Digital Content is a different kind of animal. Let’s examine the rise of phenomenon like unbundling, reaggregation and tl;dr with digital content:
Unbundling
The economies of scale that are naturally present in the distribution of physical goods has forced us to create nicely-defined boxes that content can fit into. Strangely, the technical-limitations of the gramophone disk resulted in artists having to tailor their output to fit into 3-minute chunks called singles. The generation after that, the popularity of the music ‘album’ stemmed from the fact that with physical albums cost just as much as singles to manufacture and distribute in Vinyl, LP and CD format and fetched 10-times the retail price. The “single” as a popular music format has reborn with the rise of digital content distribution. It represented that the economies of scale that defined the distribution of content were not present anymore with digital content and it launched an era of content unbundling. The unbundling of content can now be seen everywhere from news, cooking recipes, etc. With the rise of the ‘playlist’ and content aggregators like Flipboard, the “editor” is crowd-sourced.
Re-aggregation
Digital not only makes it possible for content to be purchased in an unbundled form, it also allows re-aggregation/rebundling of content to become a valuable commercial activity. Digital editors have become one-man businesses. Niche Blogs in every content category have emerged as digital curators and editors to the sea of content that is available online.
The essential capital will be editorial talent and energy, as it had been in the glory days before conglomeration when editors were themselves de facto publishers, publicists, and marketers. Specificity, reflecting the structure of the web, will matter: a guide to the cultivation of daffodils will more likely succeed than a more diffuse gardening title. - Jason Epstein
Shorter Content and tl;dr
Books have historically always been restricted in length (upper and lower bound) due to the cost of printing and distributing them. A larger book had to cost more not because the content was better, but because the book cost more to manufacture. The technology of the generation tied the hands of content creators and forced them to tailor their output to fit within these specific parameters. Content that couldn’t fit into these parameters, couldn’t be commercialized and therefore never got produced. Digital distribution has finally allowed for shorter content types to be commercialized. Kindle Direct Publishing has made it possible for novellas and short-stories to re-emerge as popular content types. Direct-to-iTunes has made it possible for short films like animated shorts, live action shorts and digital shorts to have a commercial life outside of film festivals and awards shows.