As pre-media companies wake up to the fact that they can offer their existing clients more channels to use their content with, we have a serious question of where the ‘added value’ comes into the equation and what damage ‘added value’ brings to the creative industry. From a cynical point of view added value provided by companies is a pain, given that they basically give away perfectly chargeable services and features for free (or hide the cost of those services & features elsewhere).
Of course, it’s the same value added give-aways that expand the pre-media markets drive to provide better services and increase the market competition and it also helps build pre-media companies’ brand presence. Just look at all of the big players in the pre-media space and the service channels that they can operate in – they have the technology and knowledge to provide all of the added value that will attract marketers to sign on the dotted line.
But does added value actually serve as a reverse revenue generator? i.e. has it raised the bar so high that companies have to invested heavily in technology in order to do two things;
1) reduce the cost of producing the work, and
2) ensure that they are doing it with the least number of staff possible.
These have to be done in order to reach break even on the service that they provide. Have companies shot themselves in the foot by giving this stuff away for free?
I sat drinking with some people a few years back until the early hours of the morning with two guys were from an extremely reputable pre-media supplier and the other two people present were from a magazine publisher who provided their work to this pre-media supplier. The publishing guys were arguing the point that some of the stuff they were being charged for could (or was) being produced in a completely automated way. But what these youngsters failed to realise what that the cost of the original page production had been dropped to an unbelievably low price in order to remain competitive against other suppliers and that premium extras that were controllable by the magazine and measurable in terms of spend – not every page would require the ‘extras’ unless someone at the magazine requested it. The client then wanted the extra’s for free as a value added service on top of all of the value added services they were already getting.
If you give it away, be prepared to continually give even more away for free until your business is no longer sustainable.
Author: Gary George
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