The New Media Economy And Thestar V3

The New Media Economy and thestar.com J.Sims June 2009

Media 1.0 Media 2.0

Scarcity Abundance

Online Newspaper Visit: 10 Mins Print Newspaper: 40 Mins TV Show: 30 – 60 Mins Avg Youtube video: 3.5 Mins Twitter Post : 140 characters Blog Post: 3-10 Paragraphs

Scarce Media Abundant Attention

Abundant Media Scarce Attention

Basic Supply and Demand Price Quantity Supply Demand

Media 1.0 Supply and Demand Price 2 Quantity Supply Demand Demand 2 Price

Umair Haque Media 1.0 = The Age of the Blockbuster

Media 2.0 Supply and Demand Price Quantity Supply Demand Media 2.0 Supply Media 2.0 Demand Media 2.0 Price HYPERDEFLATION

Media 2.0 = the End of the Blockbuster Age.

And the beginning of the Age of Snowballs.

Snowballs = Micro Content

Aggregators Micro-platforms Re-constructors

Blog Post YouTube Video Star Article Influential Blogger Aggregator High Traffic Site

Blockbuster Growth Value Output Cinema DVD TV Consumer Goods

Blockbuster Growth Value Output The Star Metro Thestar.com Email marketing, etc.

Snowball Growth Value Output Micro Content Blogger Aggregator High Traffic Site

Micro Content coolhunting Nypost.com Nytimes.com Bloggers

Micro Content Influential Blogger Digg Today Show Amazon

The growth of snowballs requires user engagement and community.

Clay Shirky

Digital Natives Expect to:

Interact with

Contribute to

Organize

and Share

the media they interact with .

The Snowball Economy Snowball Price Quantity A growing number of snowballs pushes the demand curve up Media 2.0 Supply Media 2.0Demand Media 2.0 Price Lower Demand for Blockbusters

This seems like chaos.

Steven Johnson: News Ecosystem

Smart Aggregator Reconstructor Entry Entry Entry Microplatform Blog Blog Blog Comment Personal Cast Personal Cast Personal Cast Entry Entry Entry Entry Entry Entry Selected Micromedia Selected Micromedia Selected Micromedia Entry Entry Entry Blog Blog Personal Cast Entry Blog Comment

Media 1.0

Closed

Dominant

Portal

Media 2.0

Open

Economies:

distribution

coordination

production

Sources of Competitive Advantages in Media 2.0 Quantity: Aggregate more than competitors. Quality: Micro-differentiate more narrowly than competitors.

2 Roles for News Organizations in the Media 2.0 Economy Curate the News Ecosystem Create vertical content sites

Revelation – what’s good?

Aggregation – elegant organization

Plasticity – let me make it my own RSS Feeds

For the Star to thrive in the Media 2.0 world, we will need to make some key strategic changes.

Inside Out Outside In

Star staff are the only voices on the site

One-way conversations

“ Authority”

The site as a community

Listen well to our users

Users and editors collaborate to create the site experience

Commenting, discussion, polling, user suggestions on story ideas, questions for interviewees, etc.

Ownership Curation

All content on the site is produced by Star editors and freelancers

Bring elegant organization to info on the web

Finding what’s good requires excellent knowledge of our users, what they want and what works online

Stop paying for content that the web is already generating for us

Do what we do best and link to the rest

Closed Ecosystem

Us against them mentality with other sites

Linking to competitors, community bloggers, government sites, data and map sites

Working with smaller local sites and blogs to form advertising networks

Product Service

Stories and articles professionally produced and packaged for delivery to an audience

Data, tools, links and content serve as a platform for discussion and interaction

Applications are created to allow for the syndication and distribution of the content across the web

Mass Niche/ Vertical

Why Verticals?

Smart aggregators will consolidate horizontally and fragment vertically.

- Umair Haque

Separate brands enable us to attract new audiences and to expand the verticals nationally.

The verticals are designed to be the ultimate resources for homes, health and parenting information in the GTA.

News and information

Blogs

Data

Listings

Local, national and classified advertising

Advertisers prefer contextual environments because they provide a higher return on investment.

Featured Advertiser Text Link Home Page of the Star: 0.02% CTR Parentcentral: 0.17% CTR

Display Ad thestar: 0.08% CTR Parentcentral: 0.16% CTR

Catfish Ad Toronto.com: 0.5% CTR Yourhome: 4.3% CTR

On average, revenue from the verticals is 115% higher than revenue attributed to the living section of thestar.com On average, TDC national revenue is 367% higher than revenue attributed to the entertainment section of thestar.com

In short:

The economics of media have shifted.

Scarcity and abundance have flipped.

Where mass was once king, now we see a mass of niches on the web.

This has caused hyperdeflation in media value and the end of the blockbuster age.

Hyperdeflation is countered by the snowball effect.

Snowballs are pieces of micro-content.

The old media blockbuster economy was built on exclusion.

The new snowball economy is built on being open to aggregators, micro-platforms and re-constructors.

And by capitalizing on economies of distribution, coordination and production.

As curators of the news ecosystem, we can provide three kinds of value.

Revelation – What’s good? Aggregation – Elegant organization Plasticity – Let me customize your content to meet my needs

This new economy requires radically different product strategies.

Letting the outside in. Curation rather than ownership. Becoming part of the ecosystem. Viewing the site as a service rather than a product. Moving from mass to vertical.

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