Sean Jackson and Katy KatzIn the days before the Internet, if you wanted to create and distribute any kind of content on a large scale, you needed to either be wealthy, have connections, win the cultural lottery of getting picked, or possess a nearly impossible combination of any of those factors.
Only a very privileged few had the resources to own a radio station, a recording studio, or a printing press.
Even fewer could cover the cost and supply the expertise required to keep those kinds of operations running.
But all of those problems existed before the Internet.
What now?
In this 14-minute episode you’ll discover:
- How a detergent company in Cincinnati became a television producer
- Why a “disposable marketing” approach is an unnecessary waste
- Which asset you can give away, still keep, and watch increase in value
- Why I turned down a seven figure offer for copyblogger.com
- How to maximize your marketing wealth with new media
- Why Mark Zuckerberg makes the rules for fools
- What real freedom looks like
Listen to New Rainmaker Episode No. 3 below …
How to Build a Lucrative Asset While You Make it Rain
Robert Bruce: In the days before the Internet, if you wanted to create and distribute any kind of media on a large scale, you needed to either be wealthy, have connections, win the cultural lottery of getting picked, or possess a nearly impossible combination of any of those factors.
Only a very privileged few had the resources to own a radio station, a recording studio, or a printing press.
Even fewer could cover the cost and supply the expertise required to keep those kinds of operations running.
But all of those problems existed before the Internet.
What now?
This is New Rainmaker, from newrainmaker.com, I’m Robert Bruce and today Brian Clark takes a look at the true and potential value of creating original media over time … and why you must own its distribution.
Stay tuned …
Brian Clark: Back in the 1930s, a detergent company based in Cincinnati had a problem. There was no effective way to reach the women the company depended on for revenue during the Depression-era decline of the United States economy.
The company decided to innovate by reaching these women in the home with stories, through a new technological medium … radio. Not just any stories, mind you, but compelling episodic tales of families facing strife, drama, joy and pain, complete with multiple plotlines and cliffhanger endings.
That company was Procter & Gamble, which went on to become one of the biggest brand advertisers on the planet. But when it came to this particular channel, P&G was both the media producer and the advertiser.
At the dawn of television in 1952, Procter & Gamble Productions quickly shifted its Guiding Light serial from radio to TV, followed by the debut of As the World Turns in 1956. The aptly-named “soap opera” became a staple of American culture and, by the 1970s, the most lucrative television market around.
Let’s pause for a second and let that sink in. Because other than giving people what they want, instead of what they don’t, this is the biggest difference between a media-first approach and marketing.
And it’s one some people are screwing up badly.
The Media Business is About Intellectual Property
Robert Bruce: To rent, or to own?
In a someone’s personal life, this question usually boils down to the financial decision on a home, and there are a lot of smart and strategic reasons why you might choose either path.
But in business? When it comes to the creation and distribution of media? There is only one truly wise, long-term path.
Here’s Brian again …
Brian Clark: When people think of media and money, they think advertising. But we’ve already seen quite clearly that you don’t have to sell your audience to others to make money.
But even with an advertising model, it’s only part of the economic equation.
Here’s the beauty of the media business. You create something, it makes money. Once you’ve stopped creating that something, it can still make more money.
Sometimes way more money. Let’s take a closer look at television.
Did you know that some producers will sell a show to a big network at a loss? It’s true, but why would they negotiate a payment that’s less than it costs to produce the show, while the network profits from day one by selling ads against the content?
It’s because if a show can attract enough of an audience to last four seasons or so, that show can be syndicated. That means the producer licenses the show to one TV station in each media market, or to a commonly owned group of stations … which can result in serious cash. And licensing means you’re not selling it outright – you still own it.
At the ridiculous end of the spectrum, Seinfeld, as of 2013, had generated $3.1billion in licensing fees in the 15 years since the final episode. But even Charles in Charge succeeded in first-run syndication despite being canceled by CBS after only one season.
Okay, let’s bring this back down to terms relevant to us.
In 2010, I got a 7-figure offer for copyblogger.com. That offer did not include StudioPress, or Synthesis, or Scribe, or any of the other products that we actually make money from.
Just the website, by itself. That’s because the site, and its content, traffic, and audience has independent value as intellectual property. It’s a digital media asset that another business could use for it’s own purposes – and therefore that business would be willing to pay handsomely for it.
Obviously, I turned the offer down. The offer wasn’t even close to reflecting the value the site brings me each and every year, much less for an exit price.
So the site has a marketing function that makes money. But it’s also a media platform that has value in itself.
You’re not just creating disposable marketing materials with a media-first approach. You’re creating something that makes you money today, and continues to accumulate value in itself over time.
Marketing is something that costs money and then eventually stops working and is replaced by something else that costs money. Building a media asset is an investment that provides a short term return on investment, and also creates long-term value as intellectual property that can be sold, licensed, or put to work in many other ways.
DIY Media Creates More Value and Freedom Than You Might Think
Robert Bruce: “A chicken in every pot and a car in every garage.” That’s what Herbert Hoover promised the American people during the Presidential campaign of 1928.
Like the vast majority of political promises, it did not come to pass.
But almost 90 years later, an infinitely more valuable promise, one that no politician ever made and that — at one time — could not even be imagined, has come to pass.
A printing press in every home.
A media company in every pocket.
We call it the Internet, the personal computer, the smartphone, and their power to drive businesses large or small through the production and distribution of media has only begun.
Here’s Brian again …
Brian Clark: Intellectual property is powerful stuff. So let’s run through our three media examples again to discover something remarkable about creating your own online platform.
Marvel had intellectual property to start with in the form of characters and stories. What they didn’t have at the time was money. So, they licensed their characters and stories to powerful Hollywood studios who made fantastic films that increased the value of Marvel’s intellectual property – all with zero risk to them!
This led to revenue and profits through merchandising, and more film licensing deals on better terms. It’s this ten-year turnaround strategy that took Marvel from bankruptcy to a $4.2 billion dollar payday.
David Visentin has a personal media brand thanks to starring in Love it or List it. The show’s producer Big Coat Productions makes money through first-run syndication of the show, which means several other cable channels in addition to HGTV have the right to broadcast it and run ads against it.
Even once the show ends, Big Coat will likely continue to make money by syndicating reruns. And David will continue to get business thanks to those reruns! But he doesn’t, unfortunately, own any of the intellectual property rights to the media asset he stars in.
Now, let’s look at WineLibrary.com, which powers wine sales for Gary Vaynerchuck’s family business. This DIY, no-permission-from-anyone online media platform is more like the Proctor and Gamble soap opera example – they sell products from a smarter form of marketing, AND they own the intellectual property as well!
If the Vaynerchuck family decided they wanted to sell the business, it certainly makes sense to sell the entire operation – physical plus digital. And when you think about it, the website is actually worth more than the physical assets.
After all, it was the web presence and move to ecommerce that increased revenue from 3 million to 45 million. Take away the website, and revenue drops dramatically.
But what if you just sold off the retail store, inventory, and other physical assets and held on to the website? You could sell it separately, or like the television producers, license it to another wine retailer, a wholesaler, or even a wine magazine looking to expand into ecommerce – and collect revenue year-after-year.
And this doesn’t even factor in that Gary left the wine business, and thanks to the personal media brand he took with him landed a 7-figure book deal, started his consulting firm Vayner Media, and recently launched a digital talent agency.
Given what web development cost back in 1997, WineLibrary was probably relatively expensive, but completely worth it given the huge increase in sales, year after year. And it cost nothing compared to producing Love it or List it, never mind a single superhero movie.
Today, the cost of building a powerful online media platform is relatively tiny. Especially when you think about the multiple levels of return.
Digital Sharecropping Makes Zero Sense
Robert Bruce: If you’re going to play the game, you better know the rules.
And one of the most important rules of smart digital media production is … own it.
Brian Clark: Some people are too smart for the logic of the new rainmaker. They’re going to take the fast track shortcut to success with social media.
“Why build a website,” they wonder. “All the people are on Facebook, right? We’ll just create a business page and clean up. Websites are for suckers!”
You may have noticed that Facebook changed the way their business pages work. Now it’s difficult, if not impossible, to actually reach the audience that you yourself built on Facebook!
Facebook has a simple solution though … pay them. In an amazing bait-and-switch turn of events, Facebook, which creates no content, wants to charge you like a traditional media company would.
Hey, what were you expecting? It’s their platform, not yours.
And you’re getting off easy. At least you’re not one of the many who had their business page, and audience, deleted for some infraction of Facebook’s rules. Or, deleted for some unknown reason, since Facebook didn’t bother to explain why.
We call the silly practice of building on someone else’s platform digital sharecropping. And a digital sharecropper can never be a rainmaker …
Because you don’t make the rules.
Social media platforms are great for driving traffic back to your own platform. But build exclusively on their land, and you’re putting your fate in the hands of a silicon valley oligarch with a demonstrated indifference to you and your goals.
Looking at Facebook’s stock price right now, Mark Zuckerberg is worth $33.8 billion dollars. Maybe it’s time to focus on building your wealth instead of his?
Beyond the lack of control when you sharecrop, you’re not building your own media asset. You’re not getting the compounded return of creating intellectual property with independent economic value at the same time that you’re effectively marketing your products or services.
You do that by building your own site, on your own domain, with a media-first approach. And it’s never been more doable than it is now.
The one who makes it rain makes the rules. But a new rainmaker has the ability to create media assets in the middle of a downpour of business, which leads to more options, more wealth, and an even more valuable corresponding benefit …
Freedom.
Robert Bruce: Thanks for listening to New Rainmaker … if you like what you’re hearing, please let us know by heading over to iTunes and giving us a rating or comment there.
And, more importantly, sign up to get free email updates of future episodes, transcripts, free reports, videos, and upcoming webinars at newrainmaker.com …
You guys are spot-on. Placing all our goods on other people’s shelves doesn’t make any more sense online than it does in a supermarket. Isn’t the whole point to get people to come to our own store to shop? The is THE basic concept lost in the social media feeding frenzy. Thanks for whacking us upside the head today.
Great stuff Brian,
I love the stories you tell, and the story you are developing with every episode. I look forward to your email every week.
Great information in this issue/podcast.
It brings a question to mind, however. How does content curation fit in? Since it’s not your own media, should you use it?
If so, what should be the mix? Obviously you should be creating content that you own.
Thanks,
Steve
Steve, we use a mix of both on Twitter. Usually the curation supports our own philosophies and educational goals and augments tweets back to our own site.
The Facebook meltdown is sobering but at least discussed openly now. There’s no more freeloading for sure. The rest of the episode was inspiring as usual.
Thank you so much for this! I have loved the first three episodes and am very excited to read more.
“Multiple levels of return” is key to leveraging assets. Yes! And the points made about social media and sharecropping will be very helpful for me (as a web designer) when potential clients tell me, “Oh, I don’t need a website. We will just use Facebook, and it’s free!”
Your New Rainmaker articles are much appreciated. Thank you for including written transcripts with your podcasts.
Build your own and own it. Simple words, simple advice, a simple philosophy. I have just started my own site and even though I don’t know a lot about the internet and how it works, i know enough to not build my main site on a 3rd party platform. Honestly, its amazing to me that anyone ever did that and expected it to last.
Whoever controls the distribution controls “the rain.” And you’re right — you don’t want someone else leeching off your hard work.
I agree that companies who fail to create their own platforms are only missing out on the full extent of the rewards. A social media presence is good to have, but it shouldn’t hold the soul of your online presence. Why make a Silicon Valley entrepreneur any more rich than he already is? That money should always go right back into your business, not his business.
Thanks for another great podcast! You guys are right on the money!
These New Rainmaker podcasts are a marvelous way to underscore and reinforce Copyblogger’s important lessons for all internet entrepreneurs. Kudos. =)
Totally agree with you guys on digital sharecropping and Facebook. But…don’t throw the baby out with the bathwater.
For my purposes at least – I’ve found it’s still the best online word-of-mouth engine. True, Facebook pages don’t carry much weight, but the organic traffic I get from people sharing my content on Facebook beats out Search traffic on a daily basis.
Of course, none of us wants to be completely reliant on FB or Google. What I’m saying is sometimes a post on a FB business page (tiny as the reach may be) can still be the spark that starts the engine.
I used to be a big believer in advertising targeted content in FB newsfeeds. But people were spreading it organically so much more effectively that it felt like a waste of money. Goes to show – if you’re reaching the right tribe in the right way – they’ll do a lot of the work for you…for free!
PS – Slightly related…The last 2 days in a row I tried to share a Copyblogger post from the site and Paul Newman appeared with “Page Not Found.” Is it just me? Or are do you guys really hate Zuckerberg that much? 🙂
From the episode:
“Social media platforms are great for driving traffic back to your own platform.”
We obviously use all the major social media sites ourselves, but we do it with the main goal of enriching our own platform with traffic.
Not sure about the 404 issue. Links for Facebook to CB generally work fine.
Yes – obviously you do. Sorry, didn’t mean for it to seem like I was pointing fingers or making it personal. Just meant to expand a point of discussion concerning the overall value of it, I guess.
(The 404s appear when I use the Like/Share button located on CB posts)
No need to apologize, just wanted to make sure no one thought we didn’t use social media. Let me check on the FB share buttons, thanks for the heads up.
I am loving this series and the whole approach to building a long term connection with an audience. As for Facebook, totally agree with you. I am finding G+1 far better value to driving traffic to my own website. When I first decided to start the online side of my business a couple of years ago I come across Copyblogger and read about “content marketing” and that was the way I decided to go. And it is paying off. Now I am moving into video. I am a fan of what you do. And this new series is just Excellent! I am loving the message and the format is classy.
Interesting stuff, as always. Yet, I think many more people benefit from sharecropping, not only FB or G+.
I own two sites; one for researchers and scholars related to sustainability; other about business in general. Both receive articles from different people but still I can decide what to display in each page, what to add and when. The sites receive email subscribers that I can reach with different offers and no individual author benefits from that, even if they wrote most of that content.
I didn’t started the sites thinking to become a “digital landlord”. They do serve two different communities, but after reading this episode I feel like I’m cheating or doing something wrong, even though I know it is not so.
What do you think about guestblogging in this regard? I know you’ve used it for years but, under this topic, are we mostly building in someone else’s land in exchange for a link and some exposure, as the content will mostly benefit the publisher?
Using rough numbers, maybe the marketing mix should be something like 80% of publications in my own site and 20% in other blogs and social media?
Guest blogging is essential, just like like social media, as long as they’re pointing back to your platform. We’ll be covering these topics in detail in upcoming episodes.
Thank you so much for sharing. It’s not actually anything that I haven’t read already on copyblogger but it’s great to have it reinforced!
I look forward to the next episode.
Thank God someone finally gets it about using Facebook to build your business Very Risky and should never be your only egg!!!! I am not a Facebook fan at all but do use it because of my contacts there.
I rarely leave comments, but I just get excited whenever I read anything from Copyblogger or New Rainmaker. These three “chapters” have just led to a ton of new ideas – many thanks for opening my mind.
I found this installment incredibly refreshing and useful, in particular the focus on owning my own platform. Great reminder that there’s ample hope for those of us who aren’t fully invested in social marketing but do have the essential assets of experience, generosity and authority to share. Thanks and look forward to the next installment.
I couldn’t agree more with the tips shared on this episode. Thanks for that Brian.
It should be pretty clear you must put & place your goodies on your OWN CONTROLLED SHACK first, no matter how little or humble it may be.
And then, immediately, try complement that presence, Guerrilla Way by Digital Graffiting it all over around, whether it be on the usual social media platforms like Facebook, Twitter, Youtube or whatevah you like the most.
The MORAL and the important matter here that you must never forget is; that aside the fact, all those social platforms which are not under your control and your own rules, the TPTB running those sites might easily vanish you in a snap from this “planet” with no excuses or previous notice.
So, for all those Social Networks, outside your Own Shack, IMHO what you really should care most about (regardless of the eventual skinny benefits of the free mouth to mouth bit) is the undeniable fact that people usually go to them to loosen up, relax, spread out their own stuff, babbling crap around and get drunk with intranscendental buzzwords.
Therefore, trying to promote, market and sell your Shack, even with all its ‘treasures inside’ throughout them, is the same like entering into a bar trying to talk serious business issues with the ‘people’ already there, under a highly noisy environment full with detached, uninterested & indifferent wildlife drunks immersed in their own nonsense.
In conclusion, build your own DigitalShack first, no matter it may be initially on the slums of internet, you always will have enough time to decorate it properly when necessary. But, the true value always will lie in what it contains, especially if you’ve been clever enough spreading its benefits in the appropiate places at the right time.
BTW, there is a new entry in my creepy tiny blog matching this topic. I posted it right away after reading your email announcing this episode.
And curiously, I’m a lil bit puzzled and still wondering if my entry was inspired by what I just had read or subliminally induced by this, since on the ocassion I hadn’t the time to read here the whole thing yet as I am now and the fact that this entry already was on the SoonToPublish queue anyway.
In any case I’m glad this early NRM synergy is working out as envisioned and I’m truly aspiring it keep that way for long long time.
So, Here’s my last blog entry: http://acortar.tk/Merchandising
I hope you like it. Best regards!!
Does the sharecropping rule apply to third party services like Squarespace, Bigcommerce, Shopify, etc? Or is it better to host your own solution? Is that the reveal of the newrainmaker a service that helps you build and break free from sharecropping?
You guys are just too much!
I’ve started on a study of the classic marketing/copywriting guys and they are all saying this same thing. It’s the story that counts. It’s the value that counts.
Modern “advertising” is garbage when they try to take it down to a one-shot-fits-all formula.
Find out what people want and give it to them, like P&G. Copyblogger has a great series on this.
Thanks for all the inspiration. Really. Lots of ideas now what to do (I just caught up on 3 episodes in one afternoon, so I’m on a bit of a “sugar rush.”
Robert
PS. How about a G+ button next to the comments? Some of these are really, really good (and the rest are simply great.) They deserve their own kudo’s in addition to those you guys are getting…
Great episode Brian and Robert, I love the new format.
Question: Who do you think in the music industry is doing the best job of exemplifying the concepts you’ve talked about thus far?
It seems like many artists are leaving a lot on the table in terms of online media production. For many, having a website with a few videos and a Twitter feed is about the extent of their personal media marketing.
– Armi