Missing data points in the IIPA copyright study

A couple of data points I would have liked to have seen but could not find in the study released Monday by the International Intellectual Property Alliance on the copyright industries’ $1.5 trillion contribution to U.S. GDP:

1)  What portion of the economic activity in what the report classify as “non-core” copyright industries is being counted toward that $1.5 trillion? Following classifications established by the World Intellectual Property Organization in 2004, the report divides Copyright-symbolthe copyright industries into four categories: Core industries (movies, TV, books, newspapers, recorded music, computer software); Partial copyright industries (industries in which a portion of their output is eligible for copyright protection, e.g. fabric, jewelry, furniture); Non-Dedicated Support industries (transportation, telecommunications, etc.); and Interdependent industries (CE manufacturers, wholesalers and retailers, blank media etc.). Together, the four make up the report’s “total copyright industries.”

According to the report the core industries contributed $889 billion to U.S. GDP in 2007, the last year for which data are available, while the non-core industries contributed $636 billion. Not all economic activity in those related industries is related to copyrighted works, however, as the authors of the report acknowledge. So how much are they assigning to the copyright category? “A portion,” according the report. How big a portion? The report doesn’t say. Read More »

Nothing to ad

Got a business plan for a digital media application and looking for funding? Better take out that part about, “and they we sell ads against it” and come up with Plan B.

According to a panel of venture capitalists at the Digital Media Conference in Washington, DC, Thursday, ad-supported is not a viable online business model.

gupta“We’re really looking for consumer-pay models,” said Arun Gupta of Columbia Capital. “We would really shy away from any digital media idea that is ad-supported at this point. Ad-supported can be part of it, especially if you already have some traction building value in other ways. But ad-supported is the gravy, it can’t be the meat.”

Ditto Kuk Yi, managing director of Best Buy Capital, the electronics chain’s VC arm.

“You need pretty massive scale to make ad-supported work,” according to Yi. “If you have a viable business that is not based on selling ads it’s pretty easy to layer the ad piece on top of that. But it’s very hard to build a busine ss that requires the ad piece to be there.”

Kuk-YiBest Buy Capital invested in an early-stage games compan, Yi said, that creates paid games that get embedded on social networks and mobile platforms. Another company in its portfolio is generating revenue of $1.5 million a month selling virtual goods online.

“Ads may eventually be  part of both of those but that can’t be the whole business,” he said.

Grotech Ventures general partner Don Rainey offered a somewhat sarcastic dissent.

Rainey“You can do ad-supported if you have 2o or 30 million visitors a month,” he said. “The trick is getting to 20 or 30 million visitors.”

Rainey added that, unlike years past, VCs in the digital media space these days are looking for ideas “that are actually good ideas, and can scale and become big ideas.”

Ahh, for the good old days. — TMW

Welcome to the Wonk

Welcome to The Media Wonk blog. And a special welcome to former readers of Content Agenda (moment of silence), where the Wonk first appeared. As you may have heard, Reed Business Information, which owned Content Agenda, recently decided not to continue supporting the site. As I was the full-time editor of the site, they decided not to continue supporting me, either, and so I have “moved on,” as they say. This blog is my own doing.

Content Agenda readers will find much here that is familiar. But the emphasis will be somewhat different. Although I’m sure I’ll be commenting on developments in the digital media business, and linking to items of interest, my goal is not to attempt comprehensive news coverage. Rather, I’m hoping to focus a bit more broadly on the critical–if ad hoc–global restructuring of the knowledge economybeing wrought by digital technology. That means looking at how cultural products are created today, how they’re commercialized, the significance of their mutability as digital objects and the policy debate over their proper role in wealth-creation, democratic discourse and technological innovation.

I’m also very much hoping it won’t be a monologue. I know from my work at Content Agenda and my previous experience covering the media and entertainment industries that there are many folks more qualified than me to address those issues and I hope they find their way to The Media Wonk and weigh in with comments.

For now, though, The Media Wonk remains a bit of a work in progress. I hope to begin posting regularly here soon, after I’ve dealt with a few other life details. So please bookmark the site and I’ll see you soon… — PS