The Collapse of Complex Business Models (2010)

"In a bureaucracy, it’s easier to make a process more complex than to make it simpler, and easier to create a new burden than kill an old one."

He should have lead with this.

"The most watched minute of video made in the last five years shows baby Charlie biting his brother’s finger. (Twice!) That minute has been watched by more people than the viewership of American Idol, Dancing With The Stars, and the Superbowl combined. (174 million views and counting.)"

Not sure why the two use cases are presented as directly competing. The popularity of long form scripted content on Netflix and shows like Walking Dead, Breaking Bad, etc., are huge and not going away even though the methods of distribution are changing from linear broadcast with commercials over cable/satellite to subscription on-demand OTT without ads. That's the transition taking place rather than hours spent viewing 1 minute viral videos taking away from hours spent watching high cost production long-form content otherwise the ratings would be crashing for those shows and Netflix wouldn't be spending billions on production.

Seems like a false dichotomy.

At least a few times per week I go through the YouTube and Vimeo apps on the Apple TV and apart from catching up on late night talk shows on YouTube, and some interesting short-form content on Vimeo, it doesn't at all replace watching high quality (expensive, complex) content from iTunes and Netflix.

The article also doesn't cover live programming at all, which is increasing exponentially in complexity for things like sports (Olympics coverage, specifically) but also a ton of live event production that wasn't possible before complexity (new technology) increases. Again, user-generated live (Periscope, YouTube) is additional, and doesn't replace watching that content either. There's a ton of room for more complexity with new technology for things like the Super Bowl with tiny 4K cameras in each helmet and delivery over web streaming with viewers watching from whatever angle they want, etc., that user generate content has no means of replacing.

The challenge is managing the shift from ad revenue to subscription revenue, and subsequent competition for the consumer's total monthly subscription budgets, rather than complex production being challenged by non-complex (user generated) content.

Unlike the AT&T example listed, large companies are already aggressively moving towards acquiring content rights and shifting to building OTT/VOD platforms, which is a key motivator of the recent large acquisitions like AT&T (ironically) and Time Warner / Turner / HBO, and Disney and Fox... the pivot is underway and whether or not it is successful doesn't seem related to those companies not being able to simplify but rather if they can avoid a fall in revenue from loss in ad sales during the transition process.

All content competes with each other, because humans still have finite time. Personally, I have gone through periods of not watching any long-form, scripted shows, and primarily watched content on YouTube about my specific interests. I have a finite amount of leisure time in the evening, and every option I have - books, shows, video games, dinner with friends, YouTube channels, etc. - is in direct competition with everything else.

Yes, obviously true in terms of finite time in the day. I think the total time is actually increasing (although up to a finite point) but the main point is that it's more of a transition from linear/cable/sat/ads to VOD/OTT/mobile as the primarily factor that the large companies have to manage, rather than heaving losses in time spent on complex (high budget professional content) vs non-complex (user generated).

To imagine an extreme end of the spectrum as a thought experiment, I can't imagine that 5 years from now I'll be watching 1 minute viral videos all evening instead of professionally produced long form content. Candy is great but I still haven't replaced a (complex) full meal dinner with a pile of candies.

Even for video content on Facebook, I'd assume as that takes up more of the finite time it will trend towards increasing volumes of professionally produced content.

There's a lot of interesting low budget user generated content but that won't change the fact that a lot of value created by professional, extremely talented writers, producers, cinematographers, editors, special effects graphics creators, etc..

> I can't imagine that 5 years from now I'll be watching 1 minute viral videos all evening instead of professionally produced long form content.

What's the youngest person you have the chance to observe the evening routine of?

Both my girlfriend and my sister will go to bed every evening, pull out their phone, and spend an hour watching 1 minute short viral videos on Instagram, Facebook, and Snapchat. Endless stream. 1 minute bits of content.

My girlfriend has gone so far as saying Snapchat's serious channels are the best service to catch up on the news.