The document discusses the shift from traditional media ("Media 1.0") to new media ("Media 2.0") in the digital age. In Media 1.0, content was scarce and attention was abundant, but this has flipped in Media 2.0 where content is abundant and attention is scarce. This has led to "hyperdeflation" in media value and the end of blockbuster hits. Instead, the economy is driven by "snowballs" of micro-content that gain momentum. For media companies like newspapers to thrive, they must embrace an open ecosystem and focus on curating quality content through aggregation, organization, and customization rather than owning all content. This requires strategies like vertical specialization, community engagement, and

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

2. Media 1.0 Media 2.0

3. Scarcity Abundance

4. 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

5. Scarce Media Abundant Attention

6. Abundant Media Scarce Attention

7. Basic Supply and Demand Price Quantity Supply Demand

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

9. Umair Haque Media 1.0 = The Age of the Blockbuster

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

11. Media 2.0 = the End of the Blockbuster Age.

12. And the beginning of the Age of Snowballs.

13. Snowballs = Micro Content

14. Aggregators Micro-platforms Re-constructors

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

16. Blockbuster Growth Value Output Cinema DVD TV Consumer Goods

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

18. Snowball Growth Value Output Micro Content Blogger Aggregator High Traffic Site

19. Micro Content coolhunting Nypost.com Nytimes.com Bloggers

20. Micro Content Influential Blogger Digg Today Show Amazon

21. The growth of snowballs requires user engagement and community.

25. 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

26. This seems like chaos.

27. Steven Johnson: News Ecosystem

30. 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

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

33. 2 Roles for News Organizations in the Media 2.0 Economy Curate the News Ecosystem Create vertical content sites

34. Revelation – what’s good?

35. Aggregation – elegant organization

36. Plasticity – let me make it my own RSS Feeds

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

52. Mass Niche/ Vertical

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

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

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

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

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

61. 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

62. In short:

63. The economics of media have shifted.

64. Scarcity and abundance have flipped.

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

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

67. Hyperdeflation is countered by the snowball effect.

68. Snowballs are pieces of micro-content.

69. The old media blockbuster economy was built on exclusion.

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

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

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

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

74. This new economy requires radically different product strategies.

75. 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.

76. www.simsblog.typepad.com