How Important Is Distribution Now?

The gatekeepers are dead ... platforms are dead. Content providers are going to fundamentally win.

- Gary Vaynerchuk, founder and host of the video blog Wine Library TV

In Gavin O'Malley, Industry Leaders Discuss TV, Facebook At Social Summit, Online Media Daily, February 11, 2009

Speaking on a panel at an industry meeting called SocComm: The Social Communication Summit, Vaynerchuk argued that distribution was longer a powerful factor in deciding the success of content. He asserted that because of new digital platforms the individual creators of content can distribute material easily by themselves and so do not need intermediaries--or "gatekeepers"--that help them present materials to audiences for a fee. The result, he said, is that The Wall Street Journal and Fox Broadcasting are "fundamentally out of business." By contrast, he feels that Facebook will be the medium through which creators get out their materials to huge numbers of people.

Others at the conference disagreed strongly. Kenny Miller, EVP of MTV Networks Global Digital Media group noted that distributors are still important for funding and marketing; calling attention to a media product in today's world still takes a lot of work. "The idea that every content creator is going to go out there and fund their own show, I think, is unrealistic," he said. Steven Greenberg--who left his post as president of Columbia Records in 2007 to head up a wb-based music label S-Curve Records--made the case for traditional talent management and media models. "Some violinists are really great, but they are horrible entrepreneurs," said Greenberg. What's more, "Columbia and others are still content owners," he said. "There is still room for collaboration."

Amid the roiling changes of the new digital system, it is tempting to believe that production is everything and that distribution has become a cheap commodity in the presence of blogs, RSS feeds and other vehicles. How much importance one places on the impact of this ease of distribution depends to a certain extent on one's point of view. Yochai Benkler, in The Wealth of Networks, would certainly emphasize it. But major media firms are proceeding with the idea that certain distribution routes (including the web) are crucial to master. The most popular sites online are, in fact, owned by major media firms with only a few exceptions (such as Facebook).

Hulu's Successful Distribution Model

"We're very similar to Starbucks in that we're an impulse business. They put (coffee) everywhere and make it easier to consume, and we try to do the same with content.

-Jason Kilar, CEO of Hulu

In Gavin O'Malley, "Hulu's Obsession With 'Every Little Pixel' Pays Off," Online Media Daily, September 19, 2008

Co-owned by NBC Universal and News Corporation, Hulu is an advertising-supported service that streams "premium content"--that is, professional programs from cable and broadcast television networks. The six month old firm has substantial competition; Joost (with CBS as a major investor) and Fancast (owned by Comcast) are two examples. Yet, according to Gavin O'Malley, "while Fancast launched two months before Hulu officially debuted, Hulu recorded vastly more video streams--119 million--than Fansite's 2.2 millions streams in July." Kilar would like to believe that the reason is the video distributor's punctiliousness. "We obsess over every little pixel," he said. "I can give you a hundred examples of that." At least as important, though, is Hulu's cutting-edge appoach to distribution. Understanding that people might choose to view TV shows on a whim, Hulu has chosen to place itself in front of as many people as possible instead of having them come to Hulu. To do that, it negotiated distribution deals with top website portals, including Yahoo, MSN, MySpace, and even competitor Fancast. The result is the more people are exposed to Hulu's products than if it rlied (like Fancast) only on its own website. This strategy of distributing video content on the web via many exhibitors has in the past few years become the preferred mode for companies trying to reach large audiences.