TABLE OF CONTENTS The costs benefits and the quality differences between the old and the new models are not as easily understood. Setting aside the quality discussion, both models require upfront costs to develop and format the content. These costs may change in the Internet world, but in the current environment, most content development processes are not changing. Studio space, production houses, creative teams, and artists, as well as other costs involved in creating movie, music, advertising, corporate, and personal content are still in place. A host of technological tools are rapidly developing to help these areas, but that discussion is beyond the boundaries of this book.
The distribution, delivery, and customer/user support costs are drastically different between traditional models and the Internet world. Both have fixed and variable costs, but the relative weight of fixed versus variable is significant. In a traditional model, content owners are heavily weighted toward fixed distribution costs. These costs include physical broadcasting facilities, such as capturing and encoding facilities; licensing and transmission costs for wavelengths and channels; and maintenance and storage costs.
The fixed costs to run a television or radio station for a specific region or for a closed-circuit television system for internal corporate use increases by specific steps. Initial start-up costs include reaching a specific geographic audience, either due to the transmission radius of a broadcasting tower or the licensing agreements...
