Looking to increase content sales and revenue? Debundling will be the hot growth market

Imagine you’re going shopping.

You’ve found just the sweater you want. It’s the perfect style, color and size. But you can’t buy it. It’s not that you lack the money – you’ve got plenty. (Hey, I know I’m writing for journalists here, but go with me on the hypothetical, okay?) The store won’t sell it to you – unless you also buy a pair of pants, four pairs of socks, a dress shirt, a blouse, a pair of cowboy boots and some stilettos, too.

Not into clothes? Okay, we’re online journalists, so let’s go shopping for hardware, instead.

You’ve found a sweet Macbook Air, with just the specs you want. But when you go to check out, you find that in order to get the Macbook, you’ll also have to buy a Sony Vaio, an HP tower, a 17-inch monitor, four mice (two USB and two wired) and an old Zip drive, too.

Stinks, doesn’t it?

That’s the way I feel when I consider breaking down and ordering cable TV after not having it for more than a decade. Sure, I’d like to watch The Daily Show and the Colbert Report now and then without waiting until the next morning. But I don’t want to pay for hundreds of channels just to get those two shows on Comedy Central, BBC America, Current, IndyCar races, Northwestern Wildcat games and whatever Colts and Broncos games are on ESPN or the NFL Network.

That’s also the way I feel when I hit a newspaper paywall when I just want to read a story a friend posted to Facebook or Twitter. Why should I pay for a bunch of stuff I don’t want, just to get a few things I do?

Bundling is the sales model for gatekeepers. Control the pinch point connecting content with the audience and you can profit from both sides – content providers pay you (or substantially discount their price) to get access to your audience and the audience pays you (or watches your ads) to get access to the content they want.

So long as you control the only road between content and audience, you’re golden.

Of course, gatekeepers don’t control media anymore, do they?

ESPN might have the legal right to restrict viewership of Monday Night Football to subscribers of cable providers that carry the network. But a darknet of Slingboxes and offshore video servers allows anyone with some search skills and a little patience to watch the game without paying for cable. If the commercial market won’t provide the options people want, the pirate market will.

The pirate market vanishes (or, at least, diminishes greatly) when the alternative people want legally appears. Forget for a moment what iTunes did to the mall record store. Let’s not forget what it did to darknet music sharing services, too.

Want to make money from content online? Position yourself to deliver the unbundled content that consumers want.

I’ve written before that the incremental value of most individual daily news reports is zero. So unbundling news doesn’t provide a viable revenue option for most publishers and broadcasters. (Kudos to the New York Times at least for providing a hole in its paywall for people to follow links from the social Web.) But special reports (positioned as eBooks), outstanding series (such as The Daily Show) or special events (such as sports games) can have significant incremental value to an audience of significant size.

Everyone else, though, needs to prepare for a future without bundle-driven revenue, such as subscription fees from cable providers and syndication fees. Make the move early toward unbundled, direct-from-consumer revenue and you’ll be well positioned to create your market, instead of endlessly chasing it the way the newspaper industry has been for the past decade and a half. If you can’t make significant money from unbundled direct sales, start broadcasting your content freely to a worldwide on the Web, to maximize your audience in an effort to make it more attractive to advertisers.

I wish that IndyCar would create an IndyCar TV channel, where I could pay by the year, by the month or by the race to see the events I want, similar to the way I can order Major League Baseball or NBA games through my Apple TV. Instead, most of the series’ races are on Versus, a cable channel which won’t sell me access to just the IndyCar events I want. So I don’t subscribe, and I miss those races on TV. (But I listen to the radio feed on the IndyCar website.)

By not offering people like me any legal option other than an expensive cable package, IndyCar and Versus are leaving my money on the table. Others are missing out on potential revenue, as well, including the many niche channels and independent voices who don’t have the corporate connections or personal juice to find adequate carriage on gatekeeper-controlled media.

Even big-time media properties could make more in an unbundled information marketplace. You can’t tell me that UFC and wrestling aren’t the only sports that could clean up with pay-per-view or subscription deals. How many people subscribed to HBO just for The Sopranos, back in the day? More importantly, how many potential fans of that show didn’t? Could HBO could have earned more if it’d started offering a Sopranos-only subscription via Apple TV for 50-70% of its regular price, if it had the technical capability of doing that back then? (If the network was concerned about missed promotional opportunities, it could have thrown in some “free samples” on of its other programming on that feed to encourage upsells to “regular” HBO, too.)

I’m not opposed to all bundles. I subscribe to Netflix’s streaming service because its collection of old TV shows and movies provides more value to me than the low price I pay for the service each month. And I’m happy to get bulk discounts to add extra time on subscriptions to digital and print content I do want to get. The publishers get my money up front, and I get a better per-unit rate.

Perhaps if I could get a cable TV bundle that included the channels I want for a reasonable price ($25 a month or less), I’d be willing to subscribe. But I can’t get the combination I want at a price I’m willing to pay.

Debundling allows the market greater precision in finding the price points customers are willing to support. Technology is making debundling possible in ways it couldn’t happen before (even if the industry isn’t widely adopting it yet). Add two and two and the future is clear. Bundled money is going to go away. So the remaining question is: Are you going to position yourself to take advantage of debundling, or do nothing and once again let the future take advantage of you?