This Sunday NY Times piece (reg. req'd) "Waiting for the Dough on the Web" surveys some of the Internet efforts of major "traditional media" (newspapers, TV/film) and asks whether these companies will in fact be able to shift profits online (or impliedly duplicate the kinds of profits they've enjoyed "offline"). The article takes an "on the one hand, on the other hand," approach. But my view is that there's a possibility that the answer may be "no" — or, more precisely, that the answer is a more complicated: "It won't be like the good ol' days."
What were the good old days? They were the fairly recent pre-broadband Internet era in which traditional media, including TV and newspapers, had spheres of almost absolute control and corresponding profitability. Traditional media were the de-facto "marketplaces" that brought together consumers and certain categories of advertisers. They "owned" the content, the consumer and sales virtually end to end: the channels, the process of content creation and they had the ultimate consumer-facing distribution.
On the Internet that's all over: nobody has all those elements in one place. A newspaper or local TV site, for example, is just one stop in an almost limitless proliferation of sites, many of which offer access to the same content. (That's an oversimplification of course.) And, for consumers, the more information and sites that proliferate online the more that reinforces the search-engine value proposition as a starting point in navigating this morass.
The only one of the Internet majors that starts to approach duplication of traditional media's "end-to-end" control of content, sales and distribution is arguably Yahoo! (Maybe AOL in the video context). But even Yahoo! has recently backed away from some of its more ambitious efforts to create content in favor of distributing third-party content.
Unlike offline media markets, historically, the Internet (esp. the Local Internet) is an extremely fragmented place. Only with massive distribution combined with targeting can you start to offer advertisers what they're used to getting from traditional media (but are increasingly less able to). And only by seeking to replicate offline reach with targeting can traditional media start to realize substantial revenues online, comparable to what they're used to from their traditional products.
But for reasons that are too lengthy and complex to go into on a Sunday morning, traditional media are fundamentally challenged in these efforts – also because the business model is quite different online (i.e., performance-based vs. subscription or fee-based).
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Related: Reuters on Slate.com at 10, fragmentation and the challenge to print media.
June 26, 2006 at 5:12 pm |
The days when the New York Times could charge $70,000 for a full-page ad in the main news section and the “premium” spots Tiffany, Cole-Haan, Ralph Lauren, and Wedgwood ads stacked on top of each other on page two and three for $8,000 each, for a 12 inch ad (not even going over page after page of stacked ads) compared with the real reach of Google, Yahoo, E-Bay, DrudgeReport and Craigslist.org, Many newspapers, such as the New York Times are managed by sheltered family members and a few editors. They have been looking down their collective noses at the IT, Web world for over a decade now.
The smug club doesn’t realize that their business model consists essentially of first of all, a monopoly in a major market. In the case of the Times, a monopoly of reaching the upper demographics. Then put out a paper by wrapping stack after stack of expensive ads with wire copy and a sprinkling of local news, celebrity updates and leaked stories from unnamed sources. That’s considered enterprise, when they take a leaked story from a an anonymous, bitter government insider and publish it to embarrass a Republican administration.
BTW – I believe that PaidContent, in regard to compiling the cutting edge media, is far more useful than the Business Section of the New York Times or the rest of the top 10 major newspapers and even the trade magazines. For more on the online trends taking over media leadership, visit sadbastards.wordpress.com.