Is it possible to have a business model that rewards the 3 parties involved in collaborative content models, i.e. creators, platform enablers, and consumers?

Some time ago, Manu Sporny CEO and President of Digital Bazaar, Inc. – creator of the Bitmunk digital content distribution service, published an essay explaining a new “collaborative content distribution” system.

It’s 8 blogpages long so here are some key excerpts.

He writes that there are currently “wo different methods of creating content and distributing it via the Internet. In each method, there are three important roles: the content creator/owner, the content distributor and the content customer.

In Collaborative Content Editing, the content creators can be anybody, including you. The content distributors are the website where the content resides, such as MySpace or YouTube. The content customer is anybody that visits the website. Collaborative Content Editing does not remunerate the content creators but it does reimburse the content distributors via advertising revenue.

In Super Distribution, the content creators are usually professional artists or teams of artists, but can be anybody with talent (talent being a relative term). The content distributors are regular people on the Internet, people that are running programs like BitTorrent. The content customer is anybody that downloads content from the network. This method does not remunerate the content creators nor does it remunerate the content distributors.
In both cases, somebody is being shortchanged. So what are fair distribution terms and how do you ensure fairness throughout the process? Is it possible to be fair to everybody involved in the process, and what would that cost? Would it be more expensive or less expensive?

But there is a third method which could be envisaged, i.e. Collaborative Content Distribution:

“Collaborative Content Distribution ensures that all parties are treated fairly – something that is lacking in today’s current environment. This is where we get down to the nitty-gritty and for that we will need to compare and contrast a traditional distribution channel with a distribution channel that uses Collaborative Content Distribution, such as Bitmunk.”

The author then goes to show that internet distribution is much cheaper than traditional cable distribution and that in the cable model, creators get only a small part of the proceeds:

“Basic cable television is a classic example of a traditional distribution channel. A large television network acquires and produces content. This content is streamed to affiliates and then broadcast to viewers. This is a very uni-directional process – it is corporation to affiliate to consumer.”

According to the author’s calculations:

“the artists get around 30% of what you pay – the remaining 70% is devoured in distribution costs ($27.7B per year / $55.2B per year + $36.8B per year). In other words, of the $1000 each cable television household spends on entertainment per year, $300 gets split between all of the artists and a whopping $700 goes to the cable company.”

He then calculates the dramatic savings that occur in case of internet-based distribution, which is about 20% of the cable-based alternative.

And concludes:

There are several things that are needed for Collaborative Content Distribution to become successful:

• The content providers must start offering their content to more than just the cable providers. Exclusivity is no longer in the best interest of the content creators.

• A technology platform, Bitmunk being a prime example, must be created that can remunerate the proper parties accordingly. These parties include content creators, content distributors and content customers.

• Services must be launched via the Internet that allow television-like shows and lineups. When it comes to television, content is king.

We can clearly see that

• Collaborative Content Distribution is far more efficient than traditional content distribution models.

• There is no advertising required to make Collaborative Content Distribution more cost effective than basic cable services.

• All of the technological hurdles have been successfully navigated.

• The only remaining issues are ensuring that the older business models and corporations can have a smooth transition to the new Collaborative Content Distribution models.”