This document discusses the challenges facing traditional media players, especially print publishers, in the current media landscape. It outlines how the market has shifted from stable supply and demand to an oversaturated media environment where consumers expect free content and new players like Google and Yahoo have disrupted the advertising model. Major changes are needed to news models and how value is created from content to address this new reality.
3. I hope this provides an overview of the current
situation that leads to quick and furious
invention and innovation.
There have been many good ideas floated by
earnest efforts of Newspaper Next, Pew
Center and AJR.
There’s too much toe in the water and not
enough baptism for implementation of those
ideas.
5. iterate intuitive
relationships…
Too many levels happening aggregate seamless e‐
services…reinvent
simultaneously: Drying up of sticky users…HA!
financing, deep budget cutbacks,
disappearing sales and audience…
You don’t know what to do.
• You react constantly and lose
sense of being proactive.
• You want time to sort it out.
• You have to try new things, but
what?
• WTF?
7. Consumer spending rose rapidly
AND
Advertising spending followed and increased
10X pre‐1980 levels…
Media channels became over‐saturated with
players
11. Content Device Device costs Perception of content
TV TV sets *Relative FREE (except cable)
Radio Multi‐sets Relative FREE
Daily newspaper Paper Nominal recurring Paid, but necessary
Magazines Paper Nominal ‘+’ recurring Paid, necessary luxury
Other print Paper None recurring FREE
* Expense of acquiring device was relative to consumer’s income
12. Two devices can deliver all forms of
media anywhere, anytime
VE
Perception: FREE content Device and service Cost:
relative to consumer’s income
14. • New players capture new web ad
income, device and distribution income
and reduce the income potential for
traditional media players…who lack
ability to scale.
• Consumers get a freer free ride Tell me
something I
don’t know!
16. 1 Will consumers pay a price above FREE for
news content?
2 Will ad sales alone yield enough income to
support a news operation?
3 Does ‘quality of content’ matter to
consumers?
4 How do consumers participate in creating the
context of news?
5 Does brand of news content provider matter
to consumers?
6 How important is distribution of content to
consumers?
18. FREE checking
as a loss leader
Free checking accounts to writing bad
mortgages?
The point is there are few instances of converting consumer
products or services to free.
The reason is obvious, it’s a damn tough economic model to
make work.
20. Traditional players are motivated to think news
content has value now, because the advertising sales
rug has been pulled out from under them and online
prices suck.
They haven’t figured out the new value created for
content when consumers, bloggers and others rate it,
share it, comment on it, re‐bundle it. As a matter of
fact, they have resisted this practice when they
should work it and see the value. It creates context
for news consumption.
21. News content
Commodity Is this true?
“Undifferentiated quality” o News content publishers have been
“All info is equal” told and some believe that news is a
“Info = News” commodity that is valueless in and of
itself.
o It is valuable only as a means to
attract audience and sell advertising.
27. Consumers share content they value Connected consumption helps
with selected others or to the commons. them filter and discover content.
News content providers must exploit and leverage this to great advantage for all.
Did you
hear…?
Bloggers
Think
‐like
Consumers
News X
Aggregators
‘Link economy’ Devices
strategy
and
Sharing apps
28. ▼ dds to content value by providing a new measure
A
of community‐propagated context…community tells
one another what the news is worth and why.
▼ ot fixed, but constantly mutable and elastic.
N
▼ ontext and content are no longer one‐way,
C
Editor/writer consumer.
▼ hich means, it alters the nature and value of
W
content in a meaningful and positive way for
consumers and content providers
29. From the Pew Center’s State of the News Media 2008 report
“A survey of journalists from different media ... Majorities
think such things as journalists writing blogs, the ranking of
stories on their Web sites, citizens posting comments or
ranking stories, even citizen news sites, are making
journalism better — a perspective hard to imagine even a
few years ago. These new technologies are seen as less a
threat to values or a demand on time than a way to
reconnect with audiences. News people also are less anxious
about credibility, the focus of concern a few years ago.”
30. Free content Free & Paid Paid content
Donor supported No ads No ads
Ad supported Ads too Ads too
Free content Free & Paid Paid content
32. Mass advertising model
Created
advertising
to a mass Targeted advertising
audience model
Created bid pricing and
Innovation self‐admin advertising to a
very targeted audience.
Joseph Pulitzer's
New York World 1890
Adjusted to 2007 dollars Google’s World 2007
Net Income $916 million Net Income $5 billion
34. It is disrupting an established marketplace and
converting vast sums of market share to itself.
The magnitude of operating income at 5 times
the level of the previously dominating model
shows it’s power—a massive reshaping
strategy.