Sunday, October 12, 2008

Commoncraft -- a business made possible by the Internet

We discuss the falling costs of content creation, publication, and distribution. Commoncraft has built a successful educational video business by taking advantage of these falling costs.

Commoncraft is a two-person (husband and wife) company, and they want to remain small. Low resolution copies of their videos are available for non-commercial use at no cost, and they license high resolution versions for commercial use.

As shown here, they have a very low-tech studio, keeping their investment low. Their time is the only significant cost of producing a video.

Distribution cost is also nearly zero. The non-commercial version of a video is distributed at no cost on YouTube and other video sites. They distribute the commercial version from their own server at minimal cost.

Marketing also costs close to nothing. They post a video on Youtube, and wait for users to find it and tell each other about it. They do "viral" marketing.

If it were not for the Internet, what would it cost to produce, market and distribute short educational videos? Since the cost of entry is so low, a Commoncraft competitor could easily spring up. (They even have a Web page showing how they make their videos). Would Commoncraft have an advantage over a competitor? Would they mind the competition?