I finally got around to seeing The Social Network this weekend and like any good film, it got me thinking (something that is increasingly rare for me once Fall Quarter hits week six).Aaron Sorkin and David Fincher deserve a lot of credit for creating an entertaining and thought-provoking movie with a main character who is almost intolerably obnoxious. The Mark Zuckerberg (played by Jesse Eisenberg) in the world of The Social Network is just a bastard. I love Jesse Eisenberg so much that I think I could watch a movie of him kicking puppies to death and still come out appreciating his brilliance. But despite Eisenberg's charm and talent, movie-Zuckerberg is almost impossible to tolerate.
Then I realized why movie-Zuckerberg is so hard to take (this is where the aforementioned thinking comes in). You see, in addition to portraying Zuckerberg as an ultra-douche, Aaron Sorkin and David Fincher also portray Zucker as 100%, undeniably correct about nearly everything.
Now, since you probably didn't watch that video I'll do my best to explain the high-points.
At one point in the film, Zuckerberg's business partner and Facebook C.F.O Eduardo Saverin (played by soon-to-be Spiderman Andrew Garfield) realizes that "The Facebook" is finally popular enough to appeal to advertisers and begins the process of monetizing Facebook. Zuckerberg vehemently disagrees with this plan and it's not necessarily clear why until former Napster creator Sean Parker (played by Justin Timberlake) verbalizes Zuckerberg's thinking for Saverin and the audience by extension. He says that Facebook is not yet at the height of it's "coolness." Currently, Facebook's worth is derived from how cool and trendy it is. Once it embraces a traditional route of monetizing a web site, it immediately becomes lame and it's cool currency spirals down to nothing. Parker says that the trick to turning Facebook into a billion-dollar venture as opposed to a million dollar venture is to simply wait for it to reach the apex of cool before opening it up to advertisers and application-makers.
As a former boy-band heartthrob explains this in the year 2010, it seems so obvious. On the internet, cool is currency. But as evidenced by Eduardo Saverin's horrified reaction, this wasn't such an easy call to make as few as five years ago. People have been struggling to make money off of the Internet since the first user logged in. And now that consumers are pushing traditional routes of media onto the Internet faster than the media can comprehend, figuring out just how to make money online is of the utmost importance. Thankfully, "Zuck" already figured it out for us.
Traditional routes of currency don't exist in internet media. Consumer A does not hand Media Producer X $0.95 in exchange for a Sunday issue anymore. Instead, Media Producer X must establish a different, useful quality before it becomes appealing to advertisers or subscribers.
Facebook generated tens of billions of dollars of off the notion of "cool." Of course, it's functionality is second-to-none. Facebook provides a useful tool for people's online lives. But "useful" isn't worth billions of dollars to advertisers..."cool" is.
This, of course, got me thinking about Kevin Smith's Smodcast.
You may have heard of Kevin Smith....mostly because I won't shut up about him. He's the portly gentlemen who wrote and directed Clerks back in the 90's and established himself as an independent filmmaker and nerd-icon Now, however, he is one of the most successful podcasters in the world. Go ahead and watch the video below so you know what I'm talking about.
Now, since you probably didn't watch that video I'll do my best to explain the high-points.
Back in 2008, Kevin Smith started a weekly podcast called "Smodcast" with his producer and close friend Scott Mosier. The initial stated goal was to merely catch up with each other once a week, talk about wildly inappropriate and unlikely scenarios and laugh. At some point, Smith opened the first 2 minutes of each show to an advertiser so he could cover the cost of mixing and hosting episodes, but the venture still wasn't profitable. The podcast's popularity began to climb, however, and after more than 80 produced-episodes, Smith and Mosier held a live Smodcast at a hockey tournament in Brantford, Ontario.
Now here is where the money comes in.
Smith still provided a weekly podcast for free on the internet but was able to draw in some cash from live performances across the country. Then, once the first tour was finished, Smith added even more wrinkles to his podcasting Empire. What was once only Smodcast became the "Smodcast podcasting network." The network consists of seven original themed podcasts, of which Smith appears in five and a new episode is released via Internet daily. In addition to the six new podcasts, Smith founded the world's first "podcasting theater." Smith bought a small blackbox-style theater in Los Angeles and turned it into the "Smodcastle." The Smodcastle seats around 50 people and hosts several podcasting shows a week with ticket prices ranging from $10 to $25.
So let's just say that the Smodcastle hosts three shows a week at an average ticket prices of $15. If every show sells out then the Smodcastle makes $2,250 a week. That becomes $9,000 a month. And that becomes $108,000 a year before (the very, very few) business expenses. And that is ignoring potential sources of income such as merchandising and additional advertising ventures.
Do you see what just happened?
What started off as free entertainment on the internet and continues to be free entertainment on the internet is somehow generating obscene amounts of money. Just like Zuckerberg's model of "cool before profits," Smodcast is using a similar model. In the aforementioned video that you may or may not have watched, Smith attributes the success of Smodcast to "trust." Since Smith and Mosier expressed absolutely no desire to make money off of Smodcast for almost two years, they gained the trust of their audience that they truly cared about providing quality entertainment before they cared about making profits. And now that the podcast is actually profitable, that initial trust and goodwill has carried over.
Of course, Smith had both an initial level of fame and fortune prior to his podcasting career that certainly helps in monetizing a podcast. But the content of each podcast is very much unrelated to his career as a filmmaker. Even the podcasts hosted by his relatively unknown friends draw large crowds at the Smodcastle. And six of the seven podcasts hosted by the Smodcast network have reached number 1 on iTunes podcast rankings.
It is possible for media organizations to make money through the internet. The only hang up is that it will take anything but the obvious means to do so.
2 comments:
I didn't know where you were going when you brought your hero Kevin Smith into your writing but your conclusion was insightful
You captured the challenge of monetizing the Internet expertly with this quote: " Instead, Media Producer X must establish a different, useful quality before it becomes appealing to advertisers or subscribers."
I 100 % agree. I'm not a follower of Smodcast, but I do listen to scores of other podcasts, such as anything on the TWiT or Frogpants networks, that follow the same model. In fact, I just wrote about how one Frogpants podcaster could teach us all a lesson about how to use social media.
Journalists should have been paying attention to guys like Smith and Johnson a long time ago, but they still aren't. Thanks for sounding the clarion call that they should.
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