TREotM: The History of Media Revenue Models Continued

The Revolutionary Evolution of the Media is a book in progress. Go here to read it from the beginning.O&#173;nce again monetization is the topic of the day. Why? Because history repeats itself.&#160; And that repetition is your single best bet for picking winning strategies.Realistically speaking, there are only a few ways to monetize any medium.&#160; For centuries, patronage was the way.&#160; However, as the commercial world expanded and literacy become more common, barter economies gave way to monetary economies.&#160; War, of course, played a big part as well. But the key has always been money.So, let&#8217;s take a short detour to look at a capsule account of the history of money.&#160; Barter naturally suffered from what is called &#8220;a coincidence of wants.&#8221;&#160; What I have might not be what you want; and vice versa.&#160; The result was the tendency of each growing civilization to land on a commodity that rather naturally satisfied both sides of any transaction.&#160; Some the so-called &#8220;intermediate commodities&#8221; used included wine, rum, rice, gold, silver and even cowry shells.&#160; Intermediate commodities shared a characteristic of shelf life (it didn&#8217;t perish) and regular demand (it wasn&#8217;t seasonal).Coinage showed up between 700 and 500 BC and took a variety of shapes.&#160; Some were stamped, some hammered, some with holes (in India along the Ganges valley and on the Chinese plain; they could be strung together).&#160;In 5th century BC Greece, the discovery of massive veins of silver &#8211; along with the discovery of a touchstone method of ascertaining the relative purity of metals &#8211; led to significant coinage of silver that was used to pay Athenian soldiers.&#160; The second big discovery led to a much bigger army.Sparta, meanwhile, used iron coins to discourage &#8220;foreign&#8221; trade.Gold as a monetary unit grew out of Asia Minor.&#160; The touchstone made the assaying universal allowing for a real medium of exchange &#8230; and it worked with gold, silver and copper.Now, let&#8217;s fast forward for a close look at subscription revenues.&#160; We left off last week looking at some of the ways patrons financed some aspects of the beginning of monetizing media forms &#8230; performers, artists, writers, jesters and, quite seriously, religious and social workers.The news &#8211; and the fact it really never ends &#8211; helped develop the concept of subscriptions.&#160; News was distributed originally via hand-carried letters and/or word of mouth by travelers. &#160;Nothing much was current, though, as we&#8217;ve seen before.&#160; The growth of better roads, postal services (private and governmental) and moveable type paved the way forward as the costs of providing regular news reports continued to drop.&#160; Charging minimal amounts for printed flyers or pamphlets allowed for the creation of newsagents and newsstands.&#160; Dropping distribution costs (via postal services instead of private couriers) made longer distance distribution possible.Asking for small amounts for regular information created subscription models.&#160; Those models continue on a plethora of platforms today for news, information and entertainment.&#160; Despite flirtations with free newsletters via the Internet &#8211; many of which have devolved to teaser &#8220;clickbaits,&#8221; subscription models prevail for high value content.Indeed, it wasn&#8217;t until Home Box Office debuted with a subscription model that premium movie sales took off over cable and then satellite.&#160; A large part of the demise of Blockbuster can be laid at the hands of the Netflix &#8220;all-you-can-eat&#8221; monthly subscription model &#8230; first by mail and then via broadband.Even though the Internet wanted everything to be free for users, and even though advertising seemed to work for a while, nothing remains free for long.&#160; And that&#8217;s not just on the Internet.&#160; Subscription models are being re-introduced almost daily.&#160; Some ad-supported sites and subscription models are adding premium levels.&#160; Politico has added &#8220;Pro Politico&#8221; as paid insider newsletters.&#160; Hulu, an ad-supported on demand video system, has added a paid subscription version.In almost any media venture, it is worth reviewing what&#8217;s worked before.Next: We&#8217;ll begin touring media formats and discussing other monetization models.&#160;Next week: Chapter 14, Part 3The opinions and points of view expressed in this commentary are exclusively the views of the author and do not necessarily represent the views of MediaVillage/MyersBizNet management or associated bloggers.

TREotM: The History of Media Revenue Models Continued

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Paul S. Maxwell

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