The New Media Economy

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My presentation on how news organizations must adapt to the new media economy. For slide by slide commentary, visit www.simsblog.typepad.com.

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The New Media Economy

  1. 1. The New Media Economy<br />J.Sims<br />June 2009<br />
  2. 2. Media 2.0<br />Media 1.0<br />
  3. 3. Scarcity<br />Abundance<br />
  4. 4. Online Newspaper Visit: 10 Mins<br />AvgYoutube video: 3.5 Mins<br />Twitter Post : 140 characters<br />TV Show: 30 – 60 Mins<br />Print Newspaper: 40 Mins<br />Blog Post: <br />3-10 Paragraphs<br />
  5. 5. Scarce<br />Media<br />Abundant<br />Attention<br />
  6. 6. Scarce<br />Attention<br />Abundant<br />Media<br />
  7. 7. Supply<br />Price<br />Demand<br />Quantity<br />Basic Supply and Demand<br />
  8. 8. Supply<br />Price 2<br />Demand<br />Quantity<br />Media 1.0 Supply and Demand<br />Price<br />Demand 2<br />
  9. 9. UmairHaque<br />Media 1.0 = The Age of the Blockbuster<br />
  10. 10. Supply<br />Price<br />Demand<br />Quantity<br />Media 2.0 Supply and Demand<br />Media 2.0 Supply<br />HYPERDEFLATION<br />Media 2.0 Demand<br />Media 2.0 Price<br />
  11. 11. Media 2.0 = the End of the Blockbuster Age.<br />
  12. 12. And the beginning of the Age of Snowballs.<br />
  13. 13. Snowballs = Micro Content<br />
  14. 14. Aggregators<br />Micro-platforms<br />Re-constructors<br />
  15. 15. Blog Post<br />YouTube Video<br />Star Article<br />Influential Blogger<br />Aggregator<br />High Traffic Site<br />
  16. 16. Value<br />Output<br />Blockbuster Growth<br />Consumer Goods<br />TV<br />DVD<br />Cinema<br />
  17. 17. Value<br />Output<br />Blockbuster Growth<br />Email marketing, etc.<br />Thestar.com<br />Metro<br />The Star<br />
  18. 18. Value<br />Output<br />Snowball Growth<br />High Traffic Site<br />Aggregator<br />Blogger<br />Micro Content<br />
  19. 19. Nytimes.com<br />Nypost.com<br />coolhunting<br />Micro Content<br />Bloggers<br />
  20. 20. Today Show<br />Amazon<br />Influential<br />Blogger<br />Digg<br />Micro Content<br />
  21. 21. The growth of snowballs requires user engagement and community.<br />
  22. 22. Clay Shirky<br />Digital Natives Expect to:<br /><ul><li> Interact with
  23. 23. Contribute to
  24. 24. Organize
  25. 25. and Share </li></ul>the media they interact with . <br />
  26. 26.
  27. 27.
  28. 28. The Snowball Economy<br />Lower Demand for Blockbusters<br />Media 2.0 Supply<br />A growing number of snowballs pushes the demand curve up<br />Snowball Price<br />Media 2.0Demand<br />Media 2.0 Price<br />Quantity<br />
  29. 29. This seems like chaos.<br />
  30. 30. News Ecosystem<br />
  31. 31. Steven Johnson<br />
  32. 32.
  33. 33.
  34. 34. Microplatform<br />Blog<br />Blog<br />Blog<br />Blog<br />Entry<br />Entry<br />Entry<br />Entry<br />Comment<br />Comment<br />Reconstructor<br />Personal Cast<br />Personal Cast<br />Personal Cast<br />Entry<br />Entry<br />Entry<br />Entry<br />Entry<br />Entry<br />Smart Aggregator<br />Selected Micromedia<br />Selected Micromedia<br />Selected Micromedia<br />Blog<br />Blog<br />Personal Cast<br />Entry<br />Entry<br />Entry<br />
  35. 35. Media 1.0<br />Media 2.0<br />Economies:<br /><ul><li>distribution
  36. 36. coordination
  37. 37. production
  38. 38. Closed
  39. 39. Dominant
  40. 40. Portal
  41. 41. Open</li></li></ul><li>Sources of Competitive Advantages in Media 2.0<br />Quantity: <br />Aggregate more than competitors.<br />Quality: <br />Micro-differentiate more narrowly than competitors.<br />
  42. 42. Curate the News Ecosystem <br />Create vertical content sites<br />2 Roles for News Organizations in the Media 2.0 Economy<br />
  43. 43. Revelation – what’s good?<br />
  44. 44. Aggregation – elegant organization<br />
  45. 45. Plasticity – let me make it my own<br />RSS Feeds<br />
  46. 46. For the Star to thrive in the Media 2.0 world, we will need to make some key strategic changes.<br />
  47. 47. Inside Out <br />Outside In<br /><ul><li> Star staff are the only voices on the site
  48. 48. One-way conversations
  49. 49. “Authority”
  50. 50. The site as a community
  51. 51. Listen well to our users
  52. 52. Users and editors collaborate to create the site experience
  53. 53. Commenting, discussion, polling, user suggestions on story ideas, questions for interviewees, etc.</li></li></ul><li>
  54. 54.
  55. 55.
  56. 56.
  57. 57.
  58. 58.
  59. 59.
  60. 60.
  61. 61.
  62. 62.
  63. 63. Ownership <br />Curation<br /><ul><li> All content on the site is produced by Star editors and freelancers
  64. 64. Bring elegant organization to info on the web
  65. 65. Finding what’s good requires excellent knowledge of our users, what they want and what works online
  66. 66. Stop paying for content that the web is already generating for us
  67. 67. Do what we do best and link to the rest</li></li></ul><li>Closed <br />Ecosystem<br /><ul><li> Us against them mentality with other sites
  68. 68. Linking to competitors, community bloggers, government sites, data and map sites
  69. 69. Working with smaller local sites and blogs to form advertising networks</li></li></ul><li>
  70. 70. Product<br />Service<br /><ul><li> Stories and articles professionally produced and packaged for delivery to an audience
  71. 71. Data, tools, links and content serve as a platform for discussion and interaction
  72. 72. Applications are created to allow for the syndication and distribution of the content across the web</li></li></ul><li>Mass<br />Niche/<br />Vertical<br />
  73. 73. Why Verticals?<br />Smart aggregators will consolidate horizontally and fragment vertically.<br /> - UmairHaque<br />
  74. 74. Separate brands enable us to attract new audiences and to expand the verticals nationally.<br />
  75. 75. The verticals are designed to be the ultimate resources for homes, health and parenting information in the GTA.<br />News and information<br />Blogs <br />Data<br />Listings<br />Local, national and classified advertising<br />
  76. 76.
  77. 77. Advertisers prefer contextual environments because they provide a higher return on investment.<br />
  78. 78. Featured Advertiser Text Link<br />Home Page of the Star: 0.02% CTR<br />Parentcentral: 0.17% CTR<br />
  79. 79. Display Ad<br />thestar: 0.08% CTR<br />Parentcentral: 0.16% CTR<br />
  80. 80. Catfish Ad<br />Toronto.com: 0.5% CTR<br />Yourhome: 4.3% CTR<br />
  81. 81. On average, revenue from the Verticals is 115% higher than revenue in the Living section of thestar.com<br />
  82. 82. On average, Toronto.com national revenue is 367%higher than revenue attributed to the entertainment section of thestar.com<br />
  83. 83. In short:<br />
  84. 84. The economics of media have shifted.<br />
  85. 85. Scarcity and abundance have flipped.<br />
  86. 86. Where mass was once king, now we see a mass of niches on the web.<br />
  87. 87. This has caused hyperdeflation in media value and the end of the blockbuster age.<br />
  88. 88. Hyperdeflation is countered by the snowball effect.<br />
  89. 89. Snowballs are pieces of micro-content.<br />
  90. 90. The old media blockbuster economy was built on exclusion.<br />
  91. 91. The new snowball economy is built on being open to aggregators, micro-platforms and re-constructors.<br />
  92. 92. And by capitalizing on economies of distribution, coordination and production.<br />
  93. 93. As curators of the news ecosystem, we can provide three kinds of value.<br />
  94. 94. Revelation – What’s good?Aggregation – Elegant organizationPlasticity – Let me customize your content to meet my needs<br />
  95. 95. This new economy requires radically different product strategies.<br />
  96. 96. 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.<br />
  97. 97. www.simsblog.typepad.com<br />
  98. 98. Want More?<br />Here Comes Everybody – Clay Shirky<br />What Would Google Do – Jeff Jarvis<br />Grown Up Digital – Don Tapscott<br />Crowdsourcing – Jeff Howe<br />

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