Can you point me in the direction of content monetization?
My recent post We, the people, need a strong media, saw several good comments but Tom Kieffer provided a link (Clay Shirky) that led me to an essay by Nicholas Carr The Great Unbundling: Newspapers and the Net. It’s worth a read and really got me thinking about any content offering staying viable today, whether it’s newspapers, TV, magazines, blogs or even a small newsletter for a highly targeted market.
Carr outlines near the beginning, “The shift from scarcity to abundance in media means that, when it comes to deciding what to read, watch, and listen to, we have far more choices than our parents or grandparents did. We’re able to indulge our personal tastes as never before, to design and wrap ourselves in our own private cultures. The vast array of choices is exciting, and by providing an alternative to the often bland products of the mass media it seems liberating as well. It promises, as Chris Anderson writes in The Long Tail, to free us from the tyranny of lowest-common-denominator fare and establish in its place a world of infinite variety.
Though he starts out talking about the “economics of culture,” he quickly gets into an examination of the issues surrounding content abundance (i.e., new media) and the economics of traditional media and the unbundling of it in an online age as it pertains to newspapers. I was confused as to the point of his essay since media downtrending is obvious and I was hoping he’d posit a fundamental or obvious solution.
I still think newspapers need blog networks but those thoughts are a tactical manifestation of a larger strategic one: in an age where content is a commodity and extremely simple to create and distribute, those who can edit, classify, aggregate and harness content will add value to that content and gain a critical, mass audience, enjoy monetization opportunities and remain viable.
THE ABUNDANCE PROBLEM: WHERE’S OUR ATTENTION?
Stop right now and look around. If you’re at home, you might do what I do often: take stock and realize the abundance of content we all enjoy. I did last night and here’s a sampling of both paid-for and free content choices I’ve made:
- Daily Minneapolis StarTribune newspaper (though so thin now it takes 15 minutes to get through)
- A digital video recorder with about a dozen shows and movies unwatched (I was on the fence on whether this should be in the ‘free’ category since many recorded shows are from the free-over-air channels vs. paid-for satellite ones)
- Five books started or that I intend to start
- Fifteen DVD’s still shrink-wrapped
- Four audiobooks not yet ripped to my iPhone
- Daily RSS skimming/reading (Google Reader) and ~2,000 articles per day (which includes several major news sites)
- Daily MinnPost
- Daily “memetracker” use (e.g., TechMeme, Blogrunner, Wikio)
- 19 hours of podcasts on my computer yet to be sync’ed to iPhone
- Ten PDF’s in a “Reading” folder on my laptop, three “book length”
- Online affinity groups I belong to (e.g., The Long Now Foundation) with phenomenal content requiring time to consume while online.
Notice that the “FREE” section has a lot more content in it. I was surprised when I did this content audit to discover that most of the time I invest in media consumption has shifted to the FREE category.
I used to read dozens of trade journals in technology (and still subscribe to many of them in Google Reader) but find almost all of their articles stale since I’ve read about the topic usually days or hours earlier and the memetrackers allow me to see a breaking piece of tech news, read thought leaders posts, and basically exhaust a topic before the trade journals publish.
The opportunity in a time of abundance is moving higher up the stack of value. Yahoo emerged because of the unstructured mess of content published on the Web in its early days in the mid-1990’s. Google then emerged since humans categorizing all of that content like Yahoo did — and expecting Yahoo users would click-n-drill-n-click their way deeper into a category to get results — was horribly inefficient and search let a seeker find relevant content quickly.
But there is a current problem with monetizing content in a day of free.
THE ECONOMIC PROBLEM: COMPETING WITH FREE
Creators of content are experiencing the downtrending of their traditional media business models and are challenged to compete with new media abundance that’s free. In addition, an increasing number of consumers are reading that content in an RSS reader making online monetization even harder:
- An article published and delivered via RSS by a mainstream, traditional media outlet (who needs to pay people for their efforts) no longer has the reader seeing the overall “container” in which that story appears and thus doesn’t even see all the advertising that surrounds it which pays for the creation and online delivery of that article.
- Psychologically, each of us ‘see’ and experience a mainstream article and a blogger’s post as equal in Google Reader or any news aggregator. They look the same and even if they contain advertisements, they’re even easier to ignore than ads in the container.
My opinion is that this devalues paid-for content delivered by traditional media and in-and-of-itself levels the playing field for free content.
In Carr’s article he ends with a pessimistic quote that implies we may end up in a world with zero high quality content, “Speaking before the Online Publishing Association in 2006, the head of the New York Times’s Web operation, Martin Nisenholtz, summed up the dilemma facing newspapers today. He asked the audience a simple question: “How do we create high quality content in a world where advertisers want to pay by the click, and consumers don’t want to pay at all?”
The answer may turn out to be equally simple: We don’t.”
Content production and delivery (and aggregation) will become efficient and super sites will emerge.
In the same way that it’s clear that the U.S. doesn’t need three major network evening news programs and no longer have the audience to support them (or my market, Minneapolis/St. Paul, with four TV evening news programs, two daily newspapers and umpteen radio stations), there will be ways discovered to harness commoditized content, gain enough critical mass of people reading/viewing/downloading, so that it will become possible for these super sites to afford the production of high quality content.
The memetrackers, Digg and others are early indicators of this trend to harness commoditized content and have achieved mass (though niche) audiences. These tracking and user-article-voting ideas will undoubtedly be a feature in much larger, efficient super sites.
Every industry has gone through transformation as the means of production, distribution and market maturity progressed and efficiency was brought to bear (e.g., railroads to trucking; Mom-n-Pop stores to big box retailers). The same thing is occurring in content and I do not think it will be free and of low quality.
I believe that we’ll see “super content aggregation” occur that identifies, pulls together and delivers every single authority and relevant data on some given topic. Imagine that a health site for “disease X” existed where every source of information, every practitioner, every user, every opinion was brought together and done so for free? If you or a loved one had “disease X”, where do you think you’d go when online?
With that kind of critical mass, a constellation of businesses that address “disease X” would flock to that site and the opportunities to monetize it would be profound. Now that the baseline is in place, it would be fairly straightforward to move UP the value stack and figure out higher and higher levels of value to add for sufferers of “disease X”.
(See my post on Cruise Critic here as an example of this sort of consolidation and hyperfocus on a market segment, in this case people that vacation on cruise ships).
When it comes to newspapers, I predict a major player (e.g., Gannett) or a confederation of outlets will create a model that leverages one another’s talent pool; harnesses user-generated content (and figures out a vetting/training/payment model in order to gain hundreds or thousands of “new media journalists”); applies personalization and recommendation tools for readers; and adds value by becoming a “must visit” destination online for news and information and does so by aggregating content in new ways while coordinating and orchestrating investigative journalistic probing — be it from their own staff or properly vetted and trained users — that results in high quality content.
About Steve Borsch
Connecting the Dots Podcast
Podcasting hit the mainstream in July of 2005 when Apple added podcast show support within iTunes. I'd seen this coming so started podcasting in May of 2005 and kept going until August of 2007. Unfortunately was never 'discovered' by national broadcasters, but made a delightfully large number of connections with people all over the world because of these shows. Click here to view the archive of my podcast posts.