While laying in bed last night, I watched Fred Wilson’s 18 minute keynote presentation at the Software and Information Industry Association 2007 Summit in New York City. The presentation covered topics ranging from whether there’s such a thing as proprietary data anymore, syndication and business models and the ever popular, how copy protection has largely failed.

This presentation made me think quite a bit about the many startups who are emerging that are looking to leverage content. We like to say that content is king but creating good sustainable content can be expensive and prohibitive (without the right tools). We have millions of prosumers (producers + consumers) who are contributing to sites like YouTube, MySpace, Flickr, and others that have created some form of content and are looking to distribute it. These produced videos are content and appeal to someone (or many folks) on the Internet. There are plenty of examples of this including Rocket Boom, WallStrip, LonelyGirl15, and others.

Back in 1998 I was spearheading a fairly large dot com and we had to watch our bandwidth and storage costs. We had to make sure that our pages didn’t just load fast, but they couldn’t be larger than a certain size so that we could control our costs. Most websites do not have to think about this but when you’re in the top 100, you certainly do, as the bandwidth bill may ring up higher than expected.

The marginal cost of distributing content online is almost $0. Bandwidth and storage are now commodities due to their falling prices. How can a company create a model around content where it’s essentially free? If you can get content from multiple sources (freely), how do you pick which source delivers it to you?

Services around the presentation and access to content are more important than ever. The winners in tomorrow’s gold rush understand this and are working hard to create a model around this. Look at Flickr, a site that doesn’t create content, but rather, leverages content created elsewhere and builds upon it. Another fantastic example is Haystack.com, a site that starts at the core with music, but then adds layers on top of it including tour photos, videos, user created content, and many other sticky options for users.

Since content essentially is becoming free, Wilson argues that the money is in attention. How do you leverage attention? If you are involved in marketing strategy, your job is going to become much more important. The maximum mindshare that a person has is 100%. How can you vie for mindshare of that person for your content? Time to get creative. It’s not so much about the product/service itself anymore, but about what it offers you at a particular moment in time. I believe that if the money is in attention and content is essentially free, our marketplace will become much more efficient.

Why will it become more efficient? We can only consume so much content per day, so eventually, the content that we do choose to consume must grab our attention quicker and more transparently. Once this happens, we are able to consume more content because of the efficiencies.

As example of this is Kayak.com. If I’m searching for a flight to Las Vegas, I do not want to have to check the websites of JetBlue, Delta, American, United, etc - but I’d rather check all of the sites at one time. In less time, I can check Kayak.com, get price quotes and book my tickets potentially cheaper than if I went and searched through each one of the above sites. I can cut my time down dramatically, essentially creating an efficiency. Does this mean that all meta-search engines will be the next hot area? Possibly - but anything that will become the next hot area will have a fantastically designed user interface and will be transparent.

To view Fred Wilson’s speech, check out the link here.

What would happen today if there was a significant increase in upstream bandwidth and uploading content (consumer generated, etc) was efficient? Will YouTube (and such sites) need to add a plethora of servers to host the influx of videos?

I had an intriguing conversation with Ken Rossi this past weekend over coffee at my local hot spot and we briefly touched upon this subject but I think it should receive more attention. If it really is simple and quick to upload your content, would more people do so? Would the quantity of content uploaded to servers increase? My thoughts are: yes.

Andrew Parker, a friend of mine and colleague over at Union Square Ventures has a nice tangential posting about Approaching the Limit of Zero (bandwidth/storage costs). Certainly a good read.

Storage space will need to increase but so will databases and search software functionality. Does Amazon realize this with their storage cloud, S3? Do they have a glimpse of the future and striving to become an early leader? Thoughts?

Ralph Koster is a virtual world guru. For those of you who do not know him, he is game designer based in San Diego and has worked on such games/persistant worlds such as Ultima Online. In a recent installment of VentureBeat, he talked about virtual worlds with a “caveat emptor” tone - buyer beware.

While I wont summarize the article as it can be found here, I will paraphrase something that Ralph nails on the head:

Microtransactions for digital assets and virtual goods is a rising, potentially multibillion dollar industry. To succeed, entrepreneurs who are building networked systems based on user content (be they citizens of Second Life or the makers of virtual worlds themselves) must realize that anything displayable is copyable; the value lies instead in service and in server-side functionality. Content is like songs around a campfire: destined to be enjoyed for free. Those who build businesses around hosting campfires would be wise to focus on making the campfire experience great, rather than charging listeners by the song.Â

I agree with Ralph 100%. Anything in the digital realm is copyable. If you can make it, it can be copied. Same thing applies to business models, ideas, and so forth. We are all worried about how to protect our ideas - but why dont we focus on creating a fantastic environment to share them?