"Every consumer good business ultimately needs to be a content business" - David Friedberg
I was listening to the All In podcast this morning and cohost David Friedberg made a great point regarding Kim Kardashian's recent announcement that she would be starting a private equity firm. Mr. Friedberg pointed out that Kim K. can provide the companies she invests in something that other PE firms can not - a mass audience and free incredible marketing. Kim Kardashian is one of the most famous social influencers on the planet and as a business investor she'll be able to direct the attention of millions of people towards the products her various companies manufacture and sell. She has accomplished this through years and years of producing content that people enjoy and now that previous work will provide her PE firm a competitive advantage that will be tough to compete with for consumer goods. Or, perhaps to say it another way, Kim Kardashian is starting a private equity fund to cash in on the content she has previously created.
Think about that last sentence for a second. Is it strange that Kim Kardashian is starting a private equity fund in order to monetize the value she created through her content over these years? More on that in a second...
"Content is King" - Sumner Redstone
Sumner Redstone inherited a mid-sized movie theatre chain in 1967 and quickly grew frustrated that his business was basically at the whims of the movie production companies who could choose which theatres got to show their movies. The reason for this was because the movie theatre industry was fragmentized, with many small and mid-sized companies in the space, while the production companies were consolidated into a few companies. Mr. Redstone took textbook business action in this situation and aggressively expanded his company's operations further up the supply chain, eventually leading to the purchase and merger of CBS and Viacom (albeit through less than noble means). Mr. Redstone coined "content is king" (later popularized by Bill Gates) to reflect the fact that content drives business success. Artists and companies that produce content that people want will always thrive. However, Mr. Redstone failed to appreciate the power of distribution and even after he took over incredible content producers like MTV and Nickelodeon, Sumner Redstone continued to be frustrated that distributors, like cable companies, had a lot of leverage over his content producing companies.
A Short History on Content Distribution
Since the invention of writing, content distribution has always been gated. Prior to the internet it was challenging to distribute content. If you were a writer there were only a handful of publishing houses to print and distribute your work. If you were an artist, there were only a few galleries who could sell your art. If you were a journalist, your options for publications were the handful of newspapers in your geographical area. The internet has changed that... somewhat. It's true anyone can create a blog or a website now, however a few players still control most of the content distribution on the internet. You know their names: Facebook, Twitter, WeChat and their dominance and control is evident by the fact that they are able to claim ownership over any content they distribute. The fact is that online content distributors have most of the leverage and content producers are still at a disadvantage. Some of that is changing, for example Substack has a more generous royalty sharing with their authors, but the fact remains that it is challenging for a content producer to distribute their work online AND retain ownership of their work.
In the end, that could be a big reason why Kim Kardashian is a starting a PE firm - it's a way for her to monetize her fame. Or, again put another way, a way to monetize the previous content she has created. The truth is Ms. Kardashian doesn't own most of the content she has created in the past... her television shows are owned by the production companies that created them, her tweets are owned by Twitter, her Facebook posts are owned by Facebook. The truth is, Kim Kardashian's private equity firm is a sign that content creators still need to seek innovative ways to be compensated for the value that their content creates.
And Now to Web3
There's a fair argument that Ms. Kardashian got value from Facebook and Twitter and therefore it's not a big deal if those companies have ownership of her content. It's clear that the online content distributors provide a service to content creators by providing an audience. It's a symbiotic relationship... both parties need each other. However, that's not the point. The point is that the world is changing and a new technology is shifting the leverage from the online content distributors to the online content creators. Blockchain enables content creators to own their work in a way that was never before possible. And blockchain enables those same creators to also own and control major distribution channels in a way never before possible. Those two sentences are the backbone of Web3 content and currently the Internet Computer is the only blockchain that can fully deliver Web3. It's not a question of whether content creators should own their work or receive more royalty over their work, but rather, when given the choice, content creators will choose to maintain ownership of their content and choose to seek the highest rewards for their work that the market will allow. That is why Web3 is inevitable. Content creators will choose Web3 products because it's in their best interest to do so. And that is meaningful since content is king.
*Note - this article first appeared on Nuance, a fully on-chain blogging website where I will place most of my content. Follow me there: https://exwqn-uaaaa-aaaaf-qaeaa-cai.ic0.app/kylelangham