DMS: The Information Money Train

In my last few posts with the DMS tag, I’ve talked about different aspects of the digital media industry. I realized I failed to explain what exactly digital media is and why it’s so valuable. Let’s take a look.

Digital media is defined by Microsoft as such:

Digital media refers to audio, video, and photo content that has been encoded (digitally compressed). Encoding content involves converting audio and video input into a digital media file such as a Windows Media file. After digital media is encoded, it can be easily manipulated, distributed, and rendered (played) by computers, and is easily transmitted over computer networks.

However, the creators of the most prolific operating system to date left out one little thing: text.

Audio, video, and photos are great for relaying information in an easy-to-understand way (thus the proliferation of internet memes) but nothing beats good old text for the dissemination of information.

So why is digital media so valuable? Easy. It’s cheap information.

You can build a website for free with a variety of websites that do all the coding for you, like Wix, featured below, and have it up and running in minutes. For free.

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You can make a website about literally anything and potentially reach millions of people.

Now that’s power.

It’s the potential reach and the low entry cost that makes digital media so valuable. YouTube is huge, and the people on top make a lot of money with very scant resources. All you really need is a camera and an idea. This infographic from newmediarockstars.com shows just how valuable the top channels are:

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You just need is a $200 laptop and talking skills and you can be the next internet celebrity. Top earnings estimates in the millions. Minimum earnings in the hundreds of thousands. That’s incredible.

A lot of people don’t understand this. What are they getting paid for? They’re just making stupid videos of themselves talking or playing video games? Why do they make so much money? They’re not even selling anything!

It all comes back to that potential reach. People make money on the internet from advertisers. Ads fund the net. To an advertiser, a video with 1 million views is a goldmine. That’s a million pairs of eyes that might see your ad, without you having to pay for printing, shipping, distribution, or anything like that.

That’s what makes digital media so valuable. You post a blog and hundreds of thousands of people might see it, and it really didn’t cost you more than a couple hours to make. This blog, for example, was written in less than 30 minutes, and if someone were to share it on a popular site it might get viewed hundreds of times, all without me paying a single dime.

So that’s why digital media is so valuable, and why everyone in Silicone valley is seemingly rushing to throw money at every start-up that comes their way. The potential reach of digital media is something that Gutenberg and his printing press could never have conceived. Post a blog and someone across the world is reading it, instantly.

Welcome to the future, folks, It only gets easier from here.

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