The New Media Onslaught is Making Entrepreneurs out of Creators

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by: John Caddell

An article from the New York Times earlier this week ("Bridging The Gap, The Sequel") starkly illustrated that venture capitalists from Silicon Valley and creative types from Southern California are having difficulty cooperating to create financial and partnership models for new media.

One of the biggest obstacles, according to the articles, is the Southern Californians’ focus on upfront cash rather than long-term equity.

How this situation came to be is easy to understand: when the means of production of creative property were expensive, there was a distinct separation between the "suits," who raised needed capital, and the "talent," who wrote, acted, sang, directed, etc. The suits financed productions and paid the talent, who worked job to job. It was in the talent’s interest to get as much of their payment upfront as possible because (1) they didn’t know when their next job would come through and (2) the suits could, and wanted to, maintain full ownership of the property.

Now production costs can be much smaller, for music, video, text, etc. Prices for distribution are coming down too as new outlets emerge for digital distribution. And media companies are looking to hedge their risk as the old moneymakers (CDs, DVDs) erode.

As a result, an entire new entrepreneurial class has emerged, between the suits and the talent, combining the ability to raise money, cut deals, etc., with songwriting, producing, or acting. Around this "middle class" is a new set of technology and business enablers that are providing key pieces of the production and distribution infrastructure for these creators. (This edition of the radio program "Fresh Air" discusses some of the new models and companies emerging in the music business. Companies like Indieflix provide distribution services for video/film producers.)

Here’s an example of the new world order for music: the LinkedIn profile for Fran Ten of the LA band West Indian Girl:

oversee and run all the departments of the west indian girl business – management, marketing, new media, touring, merchandising, promotions, licensing, legal, accounting, art, etc etc.

music is a business and musicians that dont understand this are at a disadvantage.

this job is just as much a blue collar job as the one i had in high school working at a brake factory in grand rapids, mi. sometimes i think it’s even dirtier.

Technology advances have made internet video and mobile entertainment accessible to consumers on a wide scale. The business models are lagging behind. The old way–suits and talent–isn’t going to be able to work them out. The "middle class" will have to do it.

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