Business models, new media, and verticals
I’ve been thinking a lot lately about business models and new media with a specific focus on verticals. I’m passionate about the open source movement, and have been involved with free software since the mid-90’s. In fact, I’ve earned my crust, all these years, thanks to open source, so I have no complaints there!
Anyway, lets talk about new media. I’m thinking specifically around podcasts, video podcasts, and even online magazines.
We’ve seen the demise of LinMagAU (regularly hit Slashdot, when it was running), and even the MyOSS Magazine, all labours of love. In this space, I think the most successful magazine that sits online today, is Linux Weekly News (LWN). And they do it, thanks to having a business model – affordable subscriptions (USD$5/month), or group subscriptions.
I think one of the most successful podcasts, is the now defunct LugRadio. So popular, they even managed to create a conference around it (LugRadio Live!).
That seemed to run on pure love, with sponsors for hosting. I don’t recall any ads, and I think they did it for the fun of it. Now if you search for “Linux” in the iTunes Podcast directory, there are just under 150 related podcasts (and video podcasts, maybe), that have Linux or an open source connotation in them.
Their quality varies. Some aren’t even updated any longer. One of the most successful FLOSS podcasts, that have a business model behind it, seems to be FLOSS Weekly (part of the whole twit.tv army that Leo Laporte has). They have advertising on the TWiT network, and you can support the network via donations (one time contribution, $2/mo, $5/mo, or $10/mo recurring). This stuff works via Paypal, and I can’t imagine the $2/month recurring option makes so much sense (considering Paypal fees that go with it). Plus you can buy some merchandise (something you can do, when you’re established).
Something that has recently caught my eye, is the Ubuntu Podcast. Its a video podcast, they accept Paypal donations. It also seems like a labour of love.
Media (audio, and video files aren’t small) hosting and delivery isn’t cheap. The TwIT network makes use of CacheFly, and they’re not cheap, though they seem to have a reliable, global CDN. The Ubuntu Podcast seem to use DreamHost, who must have affordable hosting options, as they host their videos on the site too.
And that’s the other thing – if you’re doing something in the open source vertical, you better have multiple file formats. You want to provide audio files using MP3’s, yes, because people have iPod’s, and they might want to play it in their cars, but for the purists, you need to have OGG files too. That just about doubles your storage space. Think video, and you will start to cringe.
YouTube seems like a good hosting platform, with sensible CDNs, but you’ve got a 10-minute video clip limit (which might be a good thing). Blip.tv wants to help you monetise your video, however, getting video from them in Malaysia is a painful experience, so far. TWIST uses ustream.tv – I haven’t tested them out yet.
A lot of labours of love, work for a while, but then die in time. It seems that unless you have a kosher business model, you’re not in it for the long haul. LWN and the TwIT network seem to have got it right – you need to get some kind of income, to defray the cost of doing business.
Are most open source people blind to ads? I recently checked my Google Analytics account and found that no Linux users clicked on any of the ads on my blog. The Windows users were kinder than the Mac users, naturally. So Google AdSense might cover things like the cost of hosting, but its not exactly a business model.
Looking for sponsors might make some sense. I don’t know what the TwIT network rates are, but Jason Calacanis has This Week in Startups, and his rate is currently at:
Each commercial is $1,000 and you can purchase them in 10 week run by emailing email@example.com. All sponsors must be pre-approved and have groovy products like DNAMail and Ustream (our first two products).
This is a new show, and the projections are anywhere between 10,000 – 25,000 viewers in the first six months after it debuts. At a size of nearly 1GB for an 18 minute podcast, I wonder if that’s being kind?
So it comes down to finding sponsors, who believe in what you’re doing. And donations might work (it works for No Agenda with John C. Dvorak and Adam Curry, and it seems to work for the TwIT network of shows).
Subscriptions work, if you have premium content (LWN), that people can sample for free a week later.
So, what are the up front costs?
- A good mic [for audio podcasts]
- A (cheap) video camera (Flipcams seem to work even these days) [for video podcasts]
- Hosting [this requires a lot of thought – remember that bandwidth isn’t as luxurious all around the world]
It looks like there might be some time involved in post-production. The tools are available fairly easily, on most operating systems that you’re on (though I hear, iMovie on the Mac is about the best for video on the cheap).
And yes, I’ve not figured out where to host podcasts or video podcasts yet….