Is High Quality Content a Commodity?

Many media professionals mistake the meaning of “commodity” for “low quality.”

Let’s put an end to this #EpicFail.

How a Commodity is Born

A product becomes a commodiy when a large enough amount of products in a category exhibit a uniform quality. The quality can be uniformly excellent or shitty.

Let’s look at a high quality example: gold. So long as the underlying purity of gold is held to a uniform standard, gold can be sold en masse as a commodity on a marketplace exchange.

Oh, No! My House of Cards Is No “Commodity”

Sorry. Even premium video and TV content is entering the commodity stage.

Here’s a simple test: the longer you could surf for something to watch on Netflix, Amazon, HBO and/or Hulu, the more quality content in the marketplace.

This doesn’t mean high quality content will be worth as much as low quality content. However, it will slowly reduce pricing-power from current levels as the evergreen library of high quality content grows.

How Can High Quality Content Maintain Pricing Power

All is not lost. Product quality is but one variable comprising price.

Timing is a variable that could actually rise in value.

For example, content creators could raise prices when demand spikes on a time-scale like Uber price gauging. Everyone who wants to watch House of Cards on the night of release might pay more, and the cost would stair-step down to the commoditized cost each day over a week or so.

Keep Calm because This is Going to Take a While

Don’t panic. Market pricing still favors high quality content. And as I noted, even when the supply of high quality content drowns us like a tsunami in Deep Impact, high quality content will still have a price delta greater than lower quality content.

However, our precious Seinfeld is going to be a much lower draw in 20 years when the next generation has 100 high quality sitcoms to choose from, each with 36+ hours of content.

But at the endgame, it will be like that sticky LendingTree slogan, “When banks compete, you win”…except this time consumers will win as high quality media producers compete in the battle for our attention-share.

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Damien Hoffman is the CEO/Founder of Cheat Sheet, a successfully boot-strapped digital publisher powered by an awesome team.