Shall we dance?
Billionaire Mark Cuban asks the following question on his blog:
“Are content producers prepared to reduced production costs….by 88%”
Cuban asks this as a rhetorical question, trying to demonstrate the almost destructive economics of video and the web.
I think, however, the question deserves an answer, and the answer is yes.
Content producers are indeed prepared to reduce production costs by 88% (or I would rather say by as much as 88%). Just not the content producers that Mark Cuban knows.
Making television and video content used to be an incredibly expensive and complex process. It isn’t any more. It isn’t anymore because new technologies have made creating video content about as complex as word processing. That does not mean that there is no creativity attached to it. There is. Some novelists make millions, not because writing is so complex,but because the content they produce is so compelling. On the other hand, there are millions of people who produce ‘words’, and make a living at it. Millions of freelance writers worldwide.
Well now creating video on a desktop is pretty much on a par with creating text. It requires about the same amount of work.
In a world that consumes millions of hours of video, the days of ‘million dollar hours’ are over.
So are the days of paying a professional cameraman $1500 a day to carry around a camera on his shoulder and push the button. The numbers just are not there, as Mr. Cuban points out.
But we draw different conclusions.
Mark Cuban asks if content producers are prepared to take an 88% cut in production costs. (I think his number is a bit high, but let’s take it anyway).
When I started to produce cable shows for Discovery, they paid about $250,000 an hour per show. The show is 44 minutes. At $250 per 44 minutes, the rate then was $5681.81 per minute. If we take 12% of that, (call it the Cuban Conversion), we arrive at $681 per minute for video produced.
That, I think, is a pretty good rate, as any freelancer with a laptop and a camcorder will tell you. Current.com pays $250 a minute and places like CNN take it for free.
How hard is it to produce a minute of video with a camcorder and a laptop?
Last month, the NY Times reported that people are now uploading 10 hours of video to Youtube every minute!
At $681 per minute, the ‘value’ of that uploading is $409,909.00 per hour, $9.8 million day,
$68 million a week, and about $3.5 billion a year. And we are just in year 2 of Youtube.
Now, of course, not all of that is going to be worth $681 a minute. Some will be worth appreciably less. Some worth nothing. But some will be worth a lot more.
How much is a page of typing worth?
Well, if it’s the first page of Harry Potter, it’s worth quite a lot. The manufacture of writing is cheap. The market determines its value based on content. Now video starts to enter the same realm.
What does this mean in the long run?
First it means that Mark Cuban’s numbers are not so wrong and not so bad.
They are only bad if you have a career tied to the old economy – one in which the act of producing video seemed some kind of magical, difficult, secret, complex and expensive process.
Oh, and by the way, at Mark Cuban’s numbers, a half hour of video would cost a network about $20,000. Anyone out there with a laptop edit and camcorder who wants to sign up to produce a cable half hour for $20,000? How about a series at that rate?