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Problems facing hit-driven media, from the gaming perspective

Saw this interesting presentation today: Age of Dinosaurs.

For those of you not interested in gaming, just scroll down halfway through where he starts talking about the value chains within lots of different media industries. It’s fascinating to see the games industry hit the same wall as all the other media – between digital distribution, long tail effects, and the breakdown of the taste-making gatekeeper types, you see the games industry hitting a pretty major wall in the next couple years. It’s been fascinating to read about this in conjunction with what’s been happening in the music industry.

It was also interesting to see the content creation costs go up while the hits do not. I’ve seen a graph like that in the past, and it was about drug development. As I understand it, it’s becoming more and more expensive to create new drugs, whereas the actual number of drugs that are getting through to FDA approval (and thus become "hits" in the hit-driven world of medicine) is staying about the same. Supposedly, it’s only going to take a decade or so for the model to get so messed up that making money will be pretty tough.

Either way, it’ll be very difficult to see this shake out – I suppose there aren’t too many levers to pull on the media side. You just have a couple options:

  • First, you can focus on the revenue side. I doubt that you can find more money by promoting the "hits" so I assume it’ll come from Long Tail media within established channels. This would mean you expose people to more of the niche stuff, and maybe people will start buying that.
  • Related to that idea, perhaps you can carve new media genres out and find some hits in
    there. Many folks have observed that there’s a huge trend towards "media fragmentation" out there – whereas 50 years ago we had 4 channels, now we have hundreds or thousands, plus Internet, plus XM radio, plus all that stuff. So maybe within a big industry like gaming, certain sub-genres form, then grow bigger, until they create mainstream categories themselves
  • Another option is obviously to focus on cost. So if you can help carve down the pipeline that it takes to create this content, that might be useful. It’s funny that user-generated content, for example, has emerged as a worthy way to create destination sites rather than paying a bunch of writes, photographers, and designers to create the site for you. Perhaps other methods will emerge to make generating content easier/faster

I think ultimately, all of these approaches will work, and you’ll see focus on each method. That said, I’ll be keeping my eye most closely on the fragmentation of media and how these fragments grow and take on lives of their own.

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