Live from XMediaLab: Richard Cardran

From the program: Richard Cardran is a media strategist and technologist who was recognised in the October 2006 Hollywood Reporter/Producers Guild of America's year end "Digital 50" as well as Streaming Magazine's "Fifty Most Influential People in Streaming." Richard has garnered two Emmy Awards for "Outstanding Achievement in Interactive Television" and "Outstanding Achievement in Advanced Media Technology" through his pioneering vision and efforts surrounding the paradigm shift in TV broadcasting to new TV2.0 strategies. Richard co-founded and in 2006 sold Zetools, Inc. a digital media software and services company - now the global advanced media and broadband television unit of TANDBERG Television, Part of the Ericsson group. Burning down the forest The current global economic climate is the incredibly challenging. Burning down the forest allows sunlight to reach the fertile ground and promote new growth. Opportunity can be found in chaotic times for those who bring new thinking to aging business models. Social net-worth? A related trend is to build large audiences and high traffic through social network models that in theory make the audience build out the offering to offset direct development costs in favor of user generated content. (That sentence does make sense -- read it again if you don't believe me.) But does it work? Twitter: $0 revenue on total investment of $55 million. Facebook: EBITDA: $50 million in 2008 -- is it enough? Free is not a business model. Free-as-a-business-model has been the overriding trend in recent start-ups looking to provide web services based primarily on potential ad revenue; however, economic trends especially in display ad revenue are simply not enough to support a free business model directly. Publishers are being paid anywhere from $1CPM to $35 CPA. What kind of scale do you need to make that work? Can you at least return my email? Investment capital is increasingly hard to secure, and the startup market is also suffering from angel investment paralysis. Consequently, start-ups in web services or social network business models need to be informed around sound economic principles and include integrated revenue directly into their core strategic planning. Four basic business models:

• Platforms
• Content
• Technology
• Services

Platforms are really expensive to build and have an unclear revenue strategy. He’s really high on content -- content is king! Content-based business models have the potential to grow organically. Winning strategy: use virtual distribution through multiple portal syndication partners (avoid destination-only models). Go to the audience -- don’t make them come to you. It can ultimately yield reasonable returns, especially for content that jumps the fence from web-only distribution into conventional media distribution. Here's his current favorite example of branded content:

A technology model also has some really good possibilities, as does a service model. Companies are reducing their OpEx and outsourcing, and direct service models are also flourishing. Ad service revenue-based networks are making money, as are mobile service applications. Hyrbid models: Platform + content + technology + service He showed a couple: Polyvore, and ecommerce and social network hybrid, and Perceptive Pixel, which is also dealing with gesture-based UI. These latter guys have a synergistic combination of hardware and software. You need to check them out! They’re amazing. Richard cofounded Zetools -- multimedia content publishing and syndication tools. Pretty quickly, they found they weren’t going to get any funding. To survive in the early 2000s, they expanded their model from technology to service. They started doing brand translation, they built a video model for AOL, they did Dell InHome, MTV, Comedy Central, Bloomberg, etc until they sold the company to Ericsson. So now he’s a ‘hired gun’ strategist. His final point: now is the perfect time to plow the field and sow the seeds of innovation.