Don't miss
  • 2,232
  • 6,844
  • 6097
  • 134
Nicholas Lovell
Home   >   Self-Publishing   >   Distribution   >   Mitch Lasky emphasises that distribution, not content, is king

Self-publishing

Finance | Distribution | Sales | Marketing

GET THE BOOK: How to Publish a Game

Mitch Lasky emphasises that distribution, not content, is king

By on January 15, 2009

At a keynote at SMU’s Law School, Mitch Lasky argued that the industry has got its focus all wrong: Content innovation drives audience growth, but “distribution innovation drives value creation“. (Source: GamaSutra)

Mitch has the track record to back his arguments up: Stints at Activision and EA, founder of Jamdat, the mobile games business bought by EA for $680 million in 2005 and currently a partner at Benchmark Capital, a highly-respected technology venture firm.

His arguments covered Doom (where the shareware model may have been more important than the game in its success), Steam and Electronic Arts. In fact, he argues that far from being marketing-led, EA’s success during the CD-Rom era was primarily due to its distribution muscle.

Mitch, of course, is talking from the point of a financial investor. For financial types, content is a dangerous investment: if you hit one out of the park, the financial rewards are huge; but for every home run there are dozens of also-rans or failures. Getting the ratio of hits to misses right is critical and difficult to predict, making financiers wary of content-led businesses.

Distribution businesses, on the other hand, are more predictable. If you control or dominate a distribution channel (as EA did in its glory years), you can shift units of so-so games simply because of your muscle. Similarly if you have 20 million customers (like Steam) or control access to the store (where Jamdat had some success on mobile phone handsets), you can build long-term enduring value.

So while I think that Mitch is overstating the significance of distribution over content, he is absolutely right that financial investors will be more excited by (and hence put higher valuations on) businesses that control distribution rather than hit-driven content.

POSTSCRIPT: Content is this context is the front catalogue of hits; a back catalogue of content, such as a film library, is hugely attractive to financial investors.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com