Cash Flow

So where does the cash flow?

When I first arrived at Channel 4 my job was Creative/Commercial Director of 4Learning. Channel 4 has always existed with that tension between public service and commercial, and I remember sitting down after the first couple of weeks, trying to reconcile that creative slash commercial, and writing down the 8 ways of making money off content slash services on the internet.

Yesterday morning (on the 20th anniversary of the day Tim Berners-Lee sent *that* memo which gave rise to the Web) I attended a very stimulating workshop at NESTA set up for the Digital Britain team (directed by Lord Carter which gave rise to a top class peer-to-peer joke) who are tasked with mapping out the way forward for the UK into the fully digital age. Among the colleagues in attendance were Charlie Leadbeater, whose critical response to the Digital Britain interim report was the springboard for the discussion; Mark Earls of Herd: How to change mass behaviour reknown; the energetic, insightful JP Rangaswami; Matt Locke, fellow commissioning editor at Channel 4; the always lively James Cherkoff; Roland Harwood and Jon Kingsbury of NESTA; Steve and Johnnie Moore; Joanne Jacobs (what is it with digital media and the scarcity of the fairer sex?); and Christian Ahlert of Open Business.

I found Charlie’s response to Digital Britain stimulating, particularly liked his categorisation of media into Enjoy, Talk and Do media (the first of these modes is usually couched in negative terms like Passive which don’t do it justice). But I felt the hole in the piece was a failure to address the lack of new business models to take over from the disrupted and digitally undermined ones. Beside a passing reference to “people who lose jobs set[ting] up microbusinesses online”, there’s very little sense of where the cash flows in this world of ‘mutual media’ or how most people make a viable living in what presumably remains a significant industry. Charlie did, however, address this issue early in our discussions yesterday. In this context, JP drew attention to Kevin Kelly’s illuminating blogpost Better Than Free which lists 8 ways to make money in the digital world. In super-brief, these are a set of “generative values” – qualities which must be nurtured and grown, and cannot be copied or faked:

• Immediacy
• Personalisation
• Interpretation
• Authenticity
• Accessibility
• Embodiment
• Patronage
• Findability

The thing about new digital business models is that people often second-guess or idealise behaviour when they’re trying to conceive them. I remember sitting in a meeting at Intellect in Russell Square in the early days of the Broadband Stakeholders’ Group and having at one point to ask people round a big table, as they blathered on about subscription and Pay-per-View: Who here has parted with actual cash money for digital content in the last month? And the answer, needless to say, was next to no-one.

So by way of experiment to test Kelly’s ideas and get a feel for how cash flows in the brave new digital age I thought I’d try to note down for a typical quarter what I spend on products and services from within the realms of digital content and networked digital services (i.e. media and communications). I won’t bother listing stuff like regular monthly bandwidth or mobile account (only where that’s over and above the routine). So here we go, starting now… (14.iii.09 17:30 gmt):

Date Purchase Amount

14.iii.09 iTunes Track of the Week Big fat zero, honey (nor is it worth anything much)

18.iii.09 2GB of extra bandwidth (cos of having to watch loads of Embarrassing Bodies off-line edit videos for work) £2.92

22.iii.09 2 x iTunes tracks for Mother’s Day mixtape £1.58

21.iv.09 Domain name renewal £12 (actually on behalf of Channel 4 on expenses)

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