The “New Cheap” – Inventory is Cheap and Production Getting Cheaper

I was talking with a couple of video and photographer professionals and we shared some ideas. What we are literally seeing before our eyes is the marketplace being flooded with new advertising inventory. The obvious driver is the Internet. What the Internet is doing is giving advertisers options away from radio, newspapers and TV. Supply and demand are at work in a big way and we are all effected by it. One thing for sure is that Google’s PPC inventory is still strong and so are their prices. As with any direct response media there are advantages and disadvantages as well as market sectors that one media can reach over the other.

So lets first start with search engine optimization. When I first built a blog called SpeechRep.com I only wanted a site that allowed me to write simple posts and comment on others work. It does just that. Simple stuff. Then I wanted to rank for a simple keyword phrase “Internet Marketing Consultant.” I made a feeble attempt to do that knowing full well I did not care if I did or not, and all the while knowing exactly what I had to do to rank for it. The reason I bring this up is I got a call the other day. Tim Pipher of Major League Video said he was perusing the web and found me by typing in “internet marketing consultant.”

What is interesting about this is I potentially did not find a customer, but a supplier using SEO. Cost = $0.00 and a hour plus of simple SEO and maybe a few links from some articles I wrote. It gets more interesting. Tim has a company called South Eastern Studios. These guys have spent a small fortune building a studio with all of the special effects and hi-def camera equipment and on air talent. So at the end of the day you can get a super high quality video for less than a $1,000 bucks for a minutes or less. People do business with people they know like and trust, online video does a great job at communicating this.

What can this do for you? It can even the playing field with your competitors as a small business competing with players with bigger budgets. Tim is going to drive the profits out of many typical DRTV production studios and other studios competing for the same advertising dollars. What will make Tim’s business fly or not are the business processes he has in place to actually produce the videos or the direct response commercials. He is going to have to do volume and have smooth production processes to make this all work profitably.

In this brilliant article The Collapse of Complex Business Models by Clay Shirky he surmises what the media executives are thinking, “Web users will have to pay for what they watch and use, or else we will have to stop making content in the costly and complex way we have grown accustomed to making it. And we don’t know how to do that.” I think the last sentence is a pure cultural thinking problem and should read, “And we won’t do that.” Every blogger and Twitter user is in some way giving Rupert Murdoch a run for his money. While some of might not pay for “journalism,” my question is do we need to pay for journalism? And is what we were being force-fed on i.e. TV News and the Newspapers “journalism” at all? The guy who sent the Tweet of the US Air plane in the Hudson published “news.” Does that make him a “journalist? Hell no, but do we need a professional journalist to then spin the “story” dozens of different ways and then call it “news,” and is that worth paying for? Maybe not.

So if the media can’t get the advertisers to pay the “old cheap” prices they were charging, guess what? More of “the news” will move into the studio and be manufactured infotainment in my view.

Now advertisers have two options, pay “the new cheap” rates and pay “the new cheap” production rates and create their own channels and create their own “online media” with Tim and Southeastern Studios.

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