Content Still Is King -- Always Will Be -- Money Will Come

Janke Roettgers of Gigaom just wrote a piece titled "Netflix, Hulu & the Golden Age of Content", in which his major premise is that we have reached a new high point for video content because virtually all major online distributors are now developing original programming (a la HBO). That includes Netflix, Hulu, YouTube, and even Amazon! His major point -- it's not just about the major studios and indie film-makers anymore.

And, yes, that is a big deal. But, why are all of these major online players now getting into their own major video content creation game?

Quite simple. Economics. Pure and simple. Economics.

You see, we are, in fact, entering a new golden age for video content creators. But, for very different reasons than Roettgers' main premise.

Here is the real deal. He (or she) creates the video content, ultimately gets the gold. In other words, video content creators are now discovering -- or re-discovering -- that it is their content that ultimately drives the entire online video engine. You see, there are scores of video distributors, all of whom essentially do the same thing. They bring you, the consumer, the same content that others can also bring you. But, the video content they bring you -- on the other hand -- is absolutely unique. No two programs are identical. And, if any online distributor wants to deliver that unique work of content to you, they must pay the content creator. And, those content payments (licenses) for online distribution are now finally becoming big, very big. All of these major online players -- Netflix, Amazon, Hulu -- are starting to pay big big bucks to deepen their pools of content. And, we are still only in the early innings of the online video revolution.

These licenses will substantially increase over time, as all major online video distributors will fight to offer the deepest pool of online video content to their users (and have the bragging rights that they do so). We have already seen that happen in the online music business. All online music distributors -- iTunes, Rhapsody, Spotify, Rdio, Napster -- always boast, first and foremost, that they have gazillions of tracks to offer. This is simply a price of admission to be a real player in the online music game.

Same thing is happening in the premium online video game. Real bucks are being paid. And, yes, these major players are now trying to pull an HBO and augment (and differentiate) their libraries from the others with their own self-produced programming. But, the real bread and butter will come from shows they don't produce.

And, that's great for all of the kings of content ....