Create more, with less, for fewer

Monday, December 5, 2011

The tide is shifting in the content creation business, and the swell is massive. I see this change happening in slow motion, but as I look forward, I see many being caught off guard. The old way of doing business has changed and that way of doing things is not returning.

As a part of this paradigm shift, we as content creators will be creating a business model similar to other industries (even if they themselves don’t recognize this model). The number of jobs lost since 2008 has been in the millions.

The general feeling among many is, “When will companies start hiring everyone back?” Honestly, I don’t think many will.

Why? Well, quite simply, they don’t NEED all those bodies to do what they are doing now. Out of a need to do more with less, they’ve been able to become uber-streamlined and ever so productive and efficient with less resources at their disposal.

Create With Less

Throughout the ages, technology displaces the workforce by introducing new efficiencies. Human telephone switch operators are replaced by automated switches. Factory workers are displaced by highly efficient robots. Cashiers are replaced by self-scan checkout lanes. In 1870, agriculture accounted for upwards of seventy percent of our population’s workforce. Today it is closer to two percent.

Technological efficiencies have allowed fewer people to do more. One reason why the job growth we are seeing is so slow is that companies are simply producing more with less people. The machines are taking over.

In addition to physical products, services are seeing the same trends. Ebooks are a good example (turned to software bits instead of physical things). Books became virtually free to produce, store, and distribute when they turned to bits.

I’ve created entire animations, websites, and iPhone apps on my laptop while hanging out at a coffee shop (though not all simultaneously, nor in one visit *grin*).

The technology has enabled me to create something that used to take a studio and team to create. Seth Godin hits the nail on the head with his analysis of media projects:

Media projects of the future will be cheaper to build, faster to market, less staffed with expensive marketers and more focused on creating free media that earns enough attention to pay for itself with limited patronage. (Source)

Create For Fewer

As illustrated by Godin’s last quote, we are seeing that shift to creating content for fewer people. Authors are now happy to sell fewer ebooks than traditional books. Why? Several reasons. First, because many are self publishing digitally, they are keeping a much higher percentage of the profits. And while the profit size is smaller, the larger percentage means they’re making more. With a standard deal, writers could often expect to see only twenty five percent of the profits (Source 1, Source 2) while the publishers kept the other three quarters.

And because of the removal of the “economy of scale,” the authors no longer have to write to a template that will appeal to the mass market. They can be more creative, take more risks, and build a smaller, but more passionate audience.

Create More

Many will continue to hope the economy just “gets better.” Others are riding this wave of change by creating their own startups. These smaller companies will constantly challenge the larger established ones. Square is challenging Paypal, who challenged Visa and Mastercard.

The Huffington Post and The Drudge Report challenged The New York Times. Angry Birds challenges Nintendo. We’ll be creating more things and we’ll be doing it more efficiently. As I said in my last post, this tsunami is here. Get your surfboard.