This article by Ben Thompson is focussed on a musician trying to work out whether paying for her YouTube is worth it. (For her it isn’t) …. but Ben get’s to the logic through the ‘duh’ moment of the fact that he sees two business models on the Internet ... and thus two ways to maximize revenue:
You can try to make a little bit of money from a lot of people – this entails getting a little bit of money from everyone on the curve.
You can try to make a lot of money from a few people – this entails maximizing the gain from the people on the left side of the curve.
It is not dissimilar to where he and I were going here – and inevitably I come back to publishing. Bottom line making pennies on large numbers of subscribers only works if you have large numbers of subscribers …. and it is not actually a route to success. The smiling curve has publishers current business models at the bottom of the value chain – and so doomed.
When you start to draw the pictures – everything falls into place. Of course – Publishers are not doomed (at least the thinking ones aren’t) … they just have to use a different way of thinking. And I know people that can help on that front.