19 April

"Death and Rebirth of Traditional Media" - Act 2, Scene 1

Yahoo and Major Newspaper Chains Partner for Vending Content

In the first act of this play, Google and Craigslist walked off with a substantial portion of the newspaper's core revenues, causing "new media" to supplant "old media". A tragedy or a triumph, depending on your perspective. So it goes.

Now the curtain rises, and we see the start of the middle of the play - the first real attempts by traditional media to monetize content through Internet partners. Is it a feint or the real deal? Read more ...

Many don't see the significance of this, which is a shame. Students of Zen are familiar with the effect of when you fail to learn or even recognize the lesson, you end up having to repeat the experience again - not unlike those condemned by history.

Really what is happening to traditional media is that the enforced vertical structure of many media properties, including newspapers, is crumbling. Used to being the biggest, baddest dog in a neighborhood, they ruthlessly dominated every aspect of content, market, and local ad business. Suddenly, they can't do this on the web, because their local audience is fragmented into looking at a million different sites - yet by necessity, these revenues they must have to survive.

In an attempt to earn more off of internet vended content, which has this more fragmented viewership, the newspapers are willing to consider horizontal plays with key web properties - a first step to cope with this dilemma.

Having dealt with different publishing interests for years,
attempting to convince publishers to do this isn't easy, because they've long held to a vertical business structure in order to maximize profitability over the years - e.g. it goes against the grain. Telling them to go horizontal on the web, and cut potentially many (large number of small yield) deals, while still being rigidly vertical in print is odd to suggest. I've gotten used to having bricks thrown at me when I've suggested it.

Traditionally, newspapers lose money on horizontal arrangements, so they are rightly loath to do it.

But the only way content will work well, fully engaging the reader/viewer is with a horizontal structure. And, in the future, the majority of all media will be consumed through the Internet in the current form of the Web.

So this is a "toe in the water" approach to a much bigger issue. That they are trying it is the big news. Likely it "too little, too late", and can easily get dropped as a strategy given that it yields (like with many web revenues) little results, because of the aforementioned fragmentation that necessitates the large number of small deals.

Were it to be scaled to grab enough regional coverage on the web, it would work to recover most of the ad exposure lost by local print media's erosion in recent years, yet due to the internet disruption, the revenue take would net out less until we pass through the end of the disruption and ad pricing rebounds.

So why do Google and Yahoo care? Newspapers still can sell better locally - they have the advertisers now - but web entities are the ones who have the customers eyeballs now. Like with AdSense, the two can be connected.

But this is just a first scene, not the whole second act. Even Google doesn't have the way yet to broadly engage media properties, because immediate profitability might suffer badly for gaining the long term market here, because they are getting too good a deal stiffing content generators in the present.

Stay tuned for the next scene ...

Posted by william at 04:20 | Comments (0) | Trackbacks (0)
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