Making Money with Multimedia—Part 1

Over the last couple months, I’ve shared a few stories about people struggling to undertake Christian documentary photography in a sustainable way, with a couple of them going out of business. But the challenges these photographers face aren’t unique to this specific genre. Photographers generally are suffering from an upheaval in the marketplace. Supply and demand are out of whack, with scores of photographers around the world pursuing their love of photography in the face of unprecedented competition from new sources, driving prices down. The challenge is to figure out a business model that will allow a photographer to produce pictures with a purpose in this environment, while earning a decent living.

In my last post, I shared with you my excitement from having attended a program on multimedia put on by Brian Storm of MediaStorm. Brian’s company produces multimedia content on social issues, and at the same time is pioneering the development of a whole new business model. Indeed, not only is Brian charging ahead himself, but he is openly sharing the elements of his business model with other would-be entrepreneurs to help create an entire industry. Examining that business model, I find reason for hope.

I have already looked at the basic markets available to still photographers, and listed some of the more common. In this post, I focus mostly on the product aspect, and specifically on the multimedia products and services Christian documentary photographers can sell in these markets, profitably.

The Business Model Dissected: A Case Study Approach

To make this discussion more concrete in terms of profit potential, I will zero in on the specific multimedia products offered by MediaStorm in the markets that company serves. Borrowing the popular case study method used in business schools, I will analyze the various elements of the MediaStorm multimedia business model to understand its strengths and weaknesses, and to get a sense of whether we can expect this product category to flourish.

To structure the analysis, I have chosen the business strategy framework used by Prof. Michael Porter at the Harvard Business School. Prof. Porter’s framework helps: (1) identify the major elements of a business strategy, (2) evaluate the intrinsic benefits of the strategy in terms of profit potential, and (3) discern the opportunities for enhancing the business.

Let’s start with the big picture. In Prof. Porter’s view, there are five factors that determine the long-term profitability of competing in a particular market. He visually depicts those forces in the following diagram.

[gview file="http://christiandocumentaryphotography.com/wordpress/wp-content/uploads/2011/02/porter.pdf"]

Let’s put MediaStorm at the center of this chart. The five circles represent the five forces. So the profitability of MediaStorm’s multimedia content over the long haul is determined by:

(1) the degree of competition from other media such as print and broadcast,

(2) the potential that other companies might enter the multimedia space and compete,

(3) the power MediaStorm has to set prices with its customers,

(4) the power MediaStorm has a set prices with its suppliers of raw content such as photographers, and

(5) the center circle which reflects the competition among existing firms doing multimedia work.

While over the coming weeks I plan to address all of those, I’m going to start off by focusing just on number three, the relationship with customers, which in the chart is the circle on the right hand side with the name highlighted in red. That element involves the product most directly.

MediaStorm’s Customers

So who are MediaStorm’s customers anyway? I have not interviewed Brian directly for this piece, but rather participated in two of his seminars a couple of weeks ago where he spoke openly about his business. I’ve also spent some time on his website. So I don’t have many details, but I’m doing this more to examine the concept than the specifics.

I would group MediaStorm’s potential customers into five categories, and analyze their wants and needs as follows.

1. Audiences. People watch MediaStorm’s multimedia clips. Brian has the data to show that many of them have been quite popular. We don’t know exactly who his audience is, but presumably they watch the clips either for education, entertainment or perhaps actionable information. Brian can monetize his relationship with his audience by selling MediaStorm branded products like t-shirts and DVDs, or presumably someday, if he wants, charging them access for the web content itself.

2. Advertisers. MediaStorm gets eyeballs and ears, and advertisers want both. There certainly are pros and cons to chasing advertising dollars, and I don’t mean to get into that sticky topic here. I would note that as the photography agency VII launched its own multimedia online magazine similar to MediaStorm’s, their primary partner in the venture is a Danish advertising firm called Revolt.

3. The people in front of the lens. I put this here for conceptual completeness simply because the people in front of the lens benefit from MediaStorm’s activities. Certainly much has been written about earning a living based on sales to the people at the bottom of the pyramid. But I doubt there’s much opportunity for that here.

4. Organizations that represent the people in front of the lens. Nonprofits and NGOs often represent the interests of those people Brian’s multimedia clips seek to help. And in fact, Brian already does work for several of them, including the United Nations Foundation, Save the Children and Doctors Without Borders /Médecins Sans Frontières (MSF). In my earlier post regarding opportunities for photographers, I offer some observations about selling into this market.

5. For-profit companies whose interests align with MediaStorm’s advocacy objectives. In that same post, I discuss the specific example of Becton Dickinson hiring photographers and indeed creating its own multimedia content to spread the word regarding the need to enhance healthcare around the world. In many cases, businesses find it to their own advantage to support the type of work MediaStorm does.

The Product

In my first post on multimedia, I outline the basic creative and technical process for creating a multimedia clip from a combination of still images, video and audio inputs. In today’s analysis, though, I would encourage you not to think about the product merely as the digital output of that production process. This is important. To my way of thinking, the real product, or in this case service, lies in the ability of MediaStorm to satisfy the ultimate need or want of its customer.

So for advertisers, that is not just the eyeballs and ears of those specific people the advertisers want to get in front of, but actually selling the advertised product.

For nonprofits, that ultimate need or want is not just the attention of the specific group of people the nonprofit wants to reach, but actually changing the hearts and minds of those people to produce the desired action (for example, voting for legislation or contributing funds).

And the same could be said for the for-profit companies who want to see real change in the world.

Creating Value for Its Customers

So how much pricing power do firms like MediaStorm have selling those ultimate products to those customers? It all comes down to the ability of MediaStorm to satisfy the wants and needs of its customers. The more value MediaStorm creates for its customers, the more it can charge.

The following seem to me to be some of the biggest determinants of how much value MediaStorm can create and, as importantly, demonstrate to its customers.

1. High-quality content. As in any business, quality counts. Quality is determined both by the intrinsic God-given talent of the people producing the product, as well as the organization’s collective experience that moves them along the learning curve. Quality is not only reflected in the multimedia clip itself, but all of the service around the development and delivery of that clip, including working relationships with the client and on-time delivery. Creating this high-quality content is very challenging, and requires an outstanding team. If MediaStorm achieves only this, it will have created fair value for which it can expect to be compensated, probably based on some reasonable measure of cost (mostly the cost of labor.)

2. Effectiveness of the clip at satisfying the ultimate wants or needs of the customer. Here, in my opinion, is the ultimate opportunity to create value in a way that produces a sustaining price that goes beyond merely cost recovery. Other than the audience and the people in front of the lens, the other customers all have wants and needs that can be expressed in terms of specific actions by specific people. To earn a price that captures the value of producing this result, MediaStorm will need to develop techniques for: a) making specific design decisions in the production of the multimedia clips that target a specific viewers and specific actions desired by MediaStorm’s customers and b) measuring the impact their clips have in terms of reaching the desired audience and producing action.

Examples of Creating Value

Fundraising

I can give you a relatively easy example. Let’s say a nonprofit wants to produce a clip to use for fund-raising. The nonprofit develops a master plan for the fund-raising campaign, and decides there is an opportunity to raise a significant amount of money by targeting college educated women between the ages of 22 and 34 years old. They think the appropriate price point for that market segment is about $50 per person, but that some might contribute as much as $300.

MediaStorm could develop a clip that specifically is designed to be appealing to that audience. There are many design choices to be made, as Brian revealed in his seminar, such as whether used predominantly still photography or video, the selection of music, the edginess of the tone, the level of language used, the depth and complexity of the story, and so on. Brian could make such design choices based on what he believes will be effective with the target audience, leading to the desired action.

Then, both in order to encourage the desired action of contributing money, but also to measure the effectiveness of the multimedia clip specifically, Brian could include a link in his multimedia player that would allow for direct contributions to the designated nonprofit, traceable to the player.

The more Brian does these projects, the more he will be able to gauge the effectiveness of certain design decisions toward reaching specific audiences, as well as measure the overall effectiveness of producing the desired actions — in this case, contributions.

Advocacy

That all works pretty well for fund-raising. The trickier instance is where the goal is not fund-raising, but rather changing the hearts and minds of people who can do something about the problem identified in Brian’s clip. Here unfortunately I’m not smart enough to come up with a solution from an IT standpoint regarding how best to measure the effectiveness of the clip, but frankly I assume it’s out there already. Regardless, I would propose that Brian has an opportunity at least to prove his value proposition partly by being able to associate the clips he produces with certain audience demographics or psychographics.

In advancing this idea, I’m taking a page from magazine advertising. The economic model of magazines is to use editorial control to reach a well-defined audience that offers specific appeal to advertisers. By being able to well-defined the audience, the magazine makes itself attractive to advertisers who want to reach that particular audience.

According to a book by Sammye Johnson and Patricia Prijatel called The Magazine: From Cover to Cover, magazines generally spend an enormous amount of time trying to define their target audience in terms of both demographics — those easily quantified elements such as age, income, and geographic location—and psychographics — harder to measure issues such as values, attitudes and beliefs. Magazines control every content and style element with that audience in mind. So the tone, the length of articles, the topics, the layout, the cover style, the placement of ads—every decision made regarding the magazine—is made with attracting that audience in mind.

Obviously I’m not inventing anything here, but rather simply learning from old media what might work well for new media. If organizations like MediaStorm can be deliberate about their editorial style to the point where they can reliably reach a reasonably well-defined audience, they can go from being merely a content supplier to being a provider of an advocacy solution that uses a specialized media platform with content to reach a particular audience. That’s real value.

Value Proposition

In this model, someone like Brian becomes an editor whose primary role is to control the editorial voice used in the storytelling. Just as with magazines where everything is controlled to attract a specific audience, the MediaStorm website that hosts the clips serves the same function. For the online media, the music, the voices and images used, and the player all become key elements in determining the nature of the audience attracted and therefore the value proposition to customers. Brian’s website becomes, in effect, a 21st century magazine.

[gview file="http://christiandocumentaryphotography.com/wordpress/wp-content/uploads/2011/02/ValueAnalysis.pdf"]

With this strategy, the question naturally comes down to: how do Brian’s design choices in his multimedia storytelling affect the crowd he attracts? From the numbers Brian put on the screen in his seminars, obviously thousands of people already like the style Brian uses. But who are they? How old are they? Where do they live? What sex are they? How educated are they? How much money do they typically make? Do they tend to be leaders or followers? Do they tend to be progressives or conservatives? What kinds of professions do they engage in? Do they tend to be in business, or government or nonprofits? Do they tend to vote? Are they social creatures who tend to share content with others? Are they action oriented or passive?

If Brian could develop tools to measure some of these and other characteristics, and over time relate them to design choices he makes, he would have the data to demonstrate his value proposition to many of the customers identified above. I know that he has started down this road with very basic characteristics, but it sounded like there was opportunity to take this farther.

The Size of the Opportunity

In this world, we spend billions upon billions of dollars to persuade each other of what we believe.

  • In the U.S. alone, stakeholders spent perhaps $4 billion in connection with the 2010 midterm election.
  • For-profit and nonprofit organizations spent $3.5 billion lobbying decision-makers in Washington in 2009.
  • In 2009, organizations spent almost $10 billion hiring public relations firms to advocate the image they want to have.
  • And only the Lord knows exactly how much companies spend in advertising each year.

All of these organizations and the dollars they spend are potential customers for those who can reliably draw specific audiences to their content and produce desired actions. If multimedia organizations like MediaStorm can develop the evidence necessary to show as specifically as possible who they reach, and their effectiveness at producing the desired action, they will have no trouble sustaining their business.

To sum up, as I go along with these posts, I will maintain a slide of the key factors we examine. Understanding the true wants and needs of the customer, and developing a process to meet those needs, is the key to creating value and getting paid a sustainable fee.

[gview file="http://christiandocumentaryphotography.com/wordpress/wp-content/uploads/2011/02/BusinessModelelements.pdf"]

In my next post, I will address the relationship between the photographer and the multimedia producer, to show how the Christian documentary photographer can participate in this value creation.

This entry was posted in Markets and tagged , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink.

One Response to Making Money with Multimedia—Part 1

  1. To whom this my concern.

    What a amazing website.I’m a social documentary photographer in South-Africa and even thought about giving up a few times.Just such a difficult market.
    One of my goals is to have exhibitions but got told my work is not contemporary enough.
    I’ve done some work for NGO and CSR companies but I know there is more I want to do.
    At this stage I want to focus more on what is happening in the Christian word around me,just to show what is really happening where I’m a reborn christian and find myself in interesting places.
    People must se the truth.

    Will you please have a look at my website and tell me what you think.There is material I have that is not on there yet,like Mighty Men Conference of 200 000 men getting together for Christ in 2009 and 2010 in RSA.
    Look at Fort West and the Word going to Motare on website.
    Thanks Sabie.
    0027 793537233

Leave a Reply

Your email address will not be published. Required fields are marked *

*

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>