This is the final installment in an ongoing series of posts by transmedia designer and entrepreneur Brian Clark on transmedia business models. We’ve been delighted by all of te interest this series has generated out there. Here’s hoping it inspires further reflection and innovation on these issues.
ENGINES OF BUSINESS INNOVATION
by Brian Clark
At the very beginning of this series, I advanced the argument that the next wave of innovation in transmedia would be driven by business innovation as we move beyond the traditional patronage model that dominates the existing body of work. The ten examples of alternative business model solves from other independent movements shows us the building blocks, but transmedia properties (versus mono-modal products) are uniquely suited for business model mash-ups: like companies, they are actually better defined by the combination of business model solves they use.
Dissecting the business models of my friends and peer practitioners is a delicate position to find myself in as a writer, but the value of discussing this topic as a community is an important part of incubating broader innovation and sustainability. It is part what we talk about as practitioners when we find ourselves together over cocktails in small groups at conference and events, like the recent gatherings at DIY Days or StoryWorld. For the purpose of illustrating why we’re going to see this wave of innovation, we don’t even have to dive beyond what some of those firms are already saying publicly.
The best place to start is with the elephant in the room: we’re in middle of a dramatic period of growth in the more traditional transmedia business models. Entertainment and brand marketing transmedia projects have gone from startlingly rare to relatively expected and are starting to move from the realm of marketing into the realm of product design (even in the views of very large companies). Meanwhile, significant new granting initiatives for transmedia storytellers have appeared in the issue advancement space and more traditional financing methods from film and broadcasting expanding to include more diverse expressions.
Transmedia entrepreneurs in companies like Campfire, Blacklight, Firelight and 42 Entertainment have business models that are primarily focused on scaling against that blossoming of demand and opportunity: they continue to polish the tactical usefulness of transmedia methods against familiar needs and mechanisms that already exist in the marketplace. One of the unspoken advantages of a “pure play” such as these is that you don’t have to stay a pure play forever … you have both some scale and the entrepreneurial nimbleness to adapt to changes in the marketplace.
Marketplaces of demand for these kinds of media skills tend to grow most robustly from the bottom up: as the market matures, the value for these kinds of services constantly decreases towards commodity. The democratization of creation works against the long-term value of any particular reproducible tactic. Already, you see traditional advertising agencies and broadcast networks setting up experience design or transmedia labs in order to service that same demand: requests for proposals tend to become job openings as optional elements become required forms.
That entrepreneurial flexibility of transmedia tactics has led others in the space to pursue more hybridized business models at a variety of different scales. Individual careers begin to look like hybrid business models, such as Lance Weiler who mixes “story R&D” and infrastructure plays with both public and private financing models across the scope of multiple pieces of work in the marketplace at the same time. At some point, those careers start to look more and more like serial entrepreneurship, like Jordan Weisman who has been incubating one innovative venture after another for decades. My own firm, GMD Studios, is an example of this kind of patchwork approach from a company level: our model for 16 years has focused on using the R&D and financial yields of commercial work along the traditional service models to fuel our own angel capitalization of a series of ventures that have ranged from infrastructure and software plays to publishing venture incubation to transmedia entertainment properties.
Hybridized business models drive you towards thinking more and more like a venture capitalist: you look for markets that can be disrupted or are under-served while favoring models that are often indistinguishable from the “lean startup” and “fail fast” concepts in the venture community. You become more and more a specialist in being a perpetual start-up, which isn’t necessarily the lowest risk way to spend your time (or money).
As the variety and frequency of transmedia work has blossomed, it is starting to produce more daring business model experiments at both the grassroots and venture capital ends of the spectrum. With the impact of the low-capital and fan-capital models, creators like Jim Babb and Andrea Philips are funding new work that venture capitalists or granting organizations just might not always get. In some cities, you see the beginnings of a transmedia theater movement that relies upon direct ticket sales that involve production groups regularly releasing new work, such as Red Cloud Rising or Sleep No More in New York City. At the other end of the spectrum, Fourth Wall Studios is fueled by one of the largest venture capital investments in transmediaís history and is betting on a model rooted heavily in an infrastructure play for immersive mobile storytelling.
This kind of entrepreneurial innovation isnít contained to just upstart mad scientists, either. At last week’s StoryWorld conference in San Francisco, it was just as evident among bigger traditional media companies as grassroots developers. The corollary to “if it ain’t broke, don’t fix it” in business is “only brands in pain innovate,” and the massive changes in media distribution and consumption are driving product developers in big companies ask similar questions about business models and profitability. These two factors — grassroots entrepreneurial risk taking and well financed companies looking to take more limited risks with bigger piles of money — will inevitably influence and reinforce each other (in the same way that indie film and Hollywood do). Like in film, there are also amazing potentials for international co-productions to help drive some of these new models, particularly where the more entrepreneurially funded U.S. system and the more heavily cultural funded European, Canadian and Australian models find synergies. In many ways, transmedia productions are uniquely suited to adopt their platform choices to the unique tax incentives and granting opportunities in particular territories that can provide 20% to 40% rebates on production budgets.
Successes will emerge from these cauldrons of international opportunity over the next handful of years that will help define the working business models for our entire creative lifetimes. Some of those successes will be modest but prove critical concepts of business sustainability that influence a generation of producers. Some, though, will be amazing successes both creatively and financially and become much-dissected case studies for decades. Right now, though, it is a completely open playing field, which is a rare gift to any generation of artists and reason enough for us to think of business model as one of the mediums in which we work.
Brian Clark is the founder and CEO of GMD Studios, a 16-year-old experience design lab based in Winter Park, Florida. He lives in New York City and occasionally tweets as @gmdclark