Cheap do-it-yourself media costs mainstream players more

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The signal dilemma facing the established entertainment and media industries-and the consumer marketers that depend on them-is that the cost of creating and distributing cultural products is rapidly approaching zero.

Sounds crazy, no? Movie production is more expensive than ever: The production budget for the Oliver Stone epic "Alexander" topped $150 million, more than four times the film's anemic box-office take. The ABC prime-time hit "Lost" costs between $1.5 million and $2.5 million per episode -at least 15 times what it cost to make an installment of "Bonanza" back in the 1960s-and it, too, loses money. Magazine guru Samir Husni of the University of Mississippi says he has heard of magazine launches reaching $100 million in annual spending. Most new magazines, as Husni has so richly documented, fail. The notion that costs are plummeting seems frankly ludicrous.

But focus on the physical product itself-the publication, the recording, the video project-and the way it gets out into the world. Do that, and you'll see that a dramatically different picture has emerged.

Any musician can use off-the-shelf equipment to record, mix and burn a professional-sounding CD. If you bought a brand-new Apple Mac G5, any of a number of high-end audio mixing tools and a microphone or two, you might drop $5,000 or so-a mere fraction of what studio time and vinyl pressing would have cost just a decade or two back. If you already have the equipment, and you want to experiment with one of the superb freeware audio programs out there, the tariff for your musical tryout plunges to nothing (including the cost of e-mailing the MP3 to friends).

The same is obviously true with publishing, a skill so linked to the desktop that it's now taught to elementary-school students. And with the advent of digital video, DVD burners and quality editing applications such as Final Cut Pro, yesterday's hand-to-mouth NYU Film School student is a budding auteur within six months of graduation.

Evidence abounds that this dramatic, continuing reduction in cultural production and distribution is making a difference in the real world. Husni fills Folio with stories of entrepreneurs who bootstrap magazines with chicken feed-such as Jim Capparell, who launched Low Carb Living on a $200,000 budget. The suspense film "Open Water" cost $130,000 to produce, and grossed more than $30 million after Lion's Gate Films acquired its distribution rights at last year's Sundance Film Festival.

Sometimes, the impact of cheap media is purely its disruptive influence. Blogs, as I've argued previously in this column, as a medium hold little profit promise. But they have clearly upset the conventional information flow in the mainstream news media, forcing the establishment to adapt or lose credibility-and perhaps, ultimately, share. Fake TV commercials, circulated virally on the Web, have similarly disrupted conventional brand-marketing efforts by big companies-as happened with a spoof Volkswagen ad that depicted a VW Polo withstanding a terrorist bombing.

Even if it remains difficult for them to achieve mainstream distribution, on-the-cheap media crowds our mental and emotional shelf space, making it harder for establishment infotainment to maintain its toehold in our lives. Brand marketers that piggyback on the institutional media thus must spend more to build mind share and justify their premium prices.

All is not lost, however. For the wisest mainstream companies, the rise of low-cost culture means creative experimentation is cheaper than ever. Better yet, the whole world can now become their R&D lab.

Randall Rothenberg, an author and longtime journalist, is director of intellectual capital at consultancy Booz Allen Hamilton

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