Wetpaint CEO Ben Elowitz on the Future of Digital Media
Among all the major categories of premium digital media, political news may be the toughest to make money on. It’s incredibly fragmented; it has no endemic advertisers; the content is often unpredictable, sensitive and/or polarizing; and it relies highly on original reporting, making it especially costly to produce.
With all those black marks that make it both especially difficult and especially rewarding, it’s refreshing to see MSNBC take up the experience revolution challenge: According to Mike Shields at Media Week, MSNBC is talking with BermanBraun about launching a new politics site with an out-of-the-box concept.
Based on the innovative work they’ve done for MSN’s Glo and Wonderwall, it’s a safe bet that if BermanBraun takes on the case, politics won’t look the same after this makeover as it did before.
And that’s a good thing. We know the old model is increasingly challenged to stay afloat. So we need someone in the industry to take some big risks and try their hand at a new approach to the category – which will hopefully not only increase engagement, but monetization.
While I don’t expect that this will significantly replace any of the existing and valuable political coverage out there today, it does have the potential to inspire other news publishers to revolutionize their own experience for consumers – which is exactly what’s necessary to improve the health of their business.
With yesterday’s announcement of the acquisition of Associated Content, Yahoo CEO Carol Bartz has sent a loud message: Yahoo is investing in becoming a new kind of digital media company for the new age of digital media. Cheers to Yahoo for recognizing that their “1.0” model needs an upgrade to be more effective in a 2.0 world. The only problem is that this move gets Yahoo just one step toward where it needs to go. It could be a powerful first step to add content and audience to their network, but will only be strategically valuable for Yahoo if it is layered with additional new investments to build true destination media sites with premium positioning.
Let’s explore what Yahoo gets from AC first, and then cover what Yahoo must do from here if it is serious about winning in media.
1. Yahoo gets commodity content at commodity cost. With Associated Content’s marketplace, first and foremost Yahoo can source commodity content – i.e. the kind of content that doesn’t need a particularly differentiated author, original reporting, or other hard-to-find talent – cost effectively.
2. Yahoo can improve time (and value) on network. In this age of deteriorating portal power, users come to portals primarily for one reason: mail. (According to data from comScore, 73% of Yahoo’s viewers of its most valuable real estate – the home page – are Yahoo Mail users.) Once they arrive, however, there is far more money to be made by vectoring them to networked media properties like Yahoo Finance, Sports, and Entertainment than by serving additional pages of poorly-monetizing email. So, by beefing up the available content in the network, Yahoo receives the benefit of extending visits at low cost.
3. Yahoo increases its audience by drawing traffic from Google. Yahoo’s made the strategic decision to move its focus out of the search game and onto media. And so rather than just feeding them from mail and search, Yahoo needs its content properties to draw audience on their own. The AC content marketplace can produce thousands of pages per day of content – each one baiting more search engine traffic, and all produced at modest cost. A recent EConsultancy interview with CEO Patrick Keane revealed that the bulk-buy strategy works: “80-90% of our audience is driven through natural search,” and according to comScore data, nearly 50% of the traffic that AC’s content sees each month is incremental to Yahoo’s core audience that comes for mail most days.
All three of these improvements have financial benefits to Yahoo – both in increasing revenues with greater reach and traffic; and in bringing down average cost of content. But they miss out on the strategic positioning that Yahoo absolutely must own if it wants to ensure a leader as a top digital media company:
Yahoo needs to be a premium destination; and the AC acquisition message undermines that positioning. Read the rest of this entry »
If old-media traditionalists can be relied on for one thing as the world digitizes, it’s to bemoan the loss of what they call “quality.” In fact, the quality of published content has never been better. So why does traditional media get it wrong here? Because they’re using a definition of quality that made sense for the world of Publishing 1.0, from Gutenberg until 1995. But for Publishing 2.0, it’s about as useful as the cubit is in modern architecture.
The traditional-media definition of quality is based on four key criteria – and all of them have fundamentally changed and become invalid. Here they are, along with an explanation of why they’re no longer useful. Next week, I’ll do a follow-up piece on how quality should be defined in the digital era. Read the rest of this entry »