The New Media Economy and thestar.com

J.SimsJune 2009

Media 1.0 Media 2.0

Scarcity Abundance

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

ScarceMedia

AbundantAttention

AbundantMedia

ScarceAttention

Price

Quantity

Supply

Demand

Basic Supply and Demand

Price 2

Quantity

Supply

Demand

Media 1.0 Supply and Demand

Demand 2

Price

Umair Haque

Media 1.0 = The Age of the Blockbuster

Price

Quantity

Supply

Demand

Media 2.0 Supply and Demand

Media 2.0 Supply

Media 2.0 DemandMedia 2.0 Price

HYPERDEFLATION

Media 2.0 = the End of the Blockbuster Age.

And the beginning of the Age of Snowballs.

Snowballs = Micro Content

Aggregators

Micro-platforms

Re-constructors

Blog PostYouTube Video

Star ArticleInfluential

Blogger Aggregator High Traffic Site

Value

Output

Blockbuster Growth

Cinema

DVD

TV

Consumer Goods

Value

Output

Blockbuster Growth

The Star

Metro

Thestar.com

Email marketing, etc.

Value

Output

Snowball Growth

Micro Content

Blogger

Aggregator

High Traffic Site

Micro Content

coolhunting

Nypost.com

Nytimes.com

Bloggers

Micro Content

InfluentialBloggerDigg

Today Show

Amazon

The growth of snowballs requires

user engagement and community.

Clay Shirky

Digital Natives Expect to:

• Interact with• Contribute to• Organize • and Share

the media they interact with .

Snowball Price

Quantity

A growing number of snowballs pushes the demand curve up

The Snowball Economy

Media 2.0 Supply

Media 2.0DemandMedia 2.0 Price

Lower Demand for Blockbusters

This seems like chaos.

Steven Johnson: News Ecosystem

Smart Aggregator

Reconstructor

Entry EntryEntry

Microplatform

Blog BlogBlog

Comment

Personal Cast Personal Cast Personal Cast

Entry EntryEntry

Entry EntryEntry

Selected Micromedia Selected Micromedia Selected Micromedia

Entry EntryEntry

Blog BlogPersonal Cast

Entry

Blog

Comment

Media 1.0• Closed• Dominant• Portal

Media 2.0

• OpenEconomies:• distribution• coordination• production

Sources of Competitive Advantages in Media 2.0

Quantity: Aggregate more than competitors.

Quality: Micro-differentiate more narrowly than competitors.

2 Roles for News Organizations in

the Media 2.0 Economy

Curate the News Ecosystem

Create vertical content sites

Revelation – what’s good?

Aggregation – elegant organization

Plasticity – let me make it my ownRSS Feeds

For the Star to thrive in the Media 2.0 world, we will need to make

some key strategic changes.

Inside Out Outside In• Star staff are the only voices on the site • One-way conversations

• “Authority”

• The site as a community • Listen well to our users

• Users and editors collaborate to create the site experience

• Commenting, discussion, polling, user suggestions on story ideas, questions for interviewees, etc.

Ownership Curation• All content on the site is produced by Star editors and freelancers

• Bring elegant organization to info on the web • Finding what’s good requires excellent knowledge of our users, what they want and what works online

• Stop paying for content that the web is already generating for us • Do what we do best and link to the rest

Closed Ecosystem• Us against them mentality with other sites

• Linking to competitors, community bloggers, government sites, data and map sites

• Working with smaller local sites and blogs to form advertising networks

Product Service

• Stories and articles professionally produced and packaged for delivery to an audience

• Data, tools, links and content serve as a platform for discussion and interaction

• Applications are created to allow for the syndication and distribution of the content across the web

Mass Niche/Vertical

Why Verticals?

Smart aggregators will consolidate horizontally and fragment vertically.

- Umair Haque

Separate brands enable us to attract new audiences and to

expand the verticals nationally.

The verticals are designed to be the ultimate resources for homes, health and parenting information in the GTA.

• News and information• Blogs • Data• Listings• Local, national and classified

advertising

Advertisers prefer contextual environments because they provide a

higher return on investment.

Featured Advertiser Text Link

Home Page of the Star: 0.02% CTR

Parentcentral: 0.17% CTR

Display Ad

thestar: 0.08% CTR

Parentcentral: 0.16% CTR

Catfish Ad

Toronto.com: 0.5% CTR

Yourhome: 4.3% CTR

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

In short:

The economics of media have shifted.

Scarcity and abundance have flipped.

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

This has caused hyperdeflation in media value and the end of the

blockbuster age.

Hyperdeflation is countered by the snowball effect.

Snowballs are pieces of micro-content.

The old media blockbuster economy was built on exclusion.

The new snowball economy is built on being open to aggregators, micro-

platforms and re-constructors.

And by capitalizing on economies of distribution, coordination and

production.

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

Revelation – What’s good?

Aggregation – Elegant organization

Plasticity – Let me customize your content to meet my needs

This new economy requires radically different product strategies.

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.

www.simsblog.typepad.com

Want More?Here Comes Everybody – Clay Shirky

What Would Google Do – Jeff Jarvis

Grown Up Digital – Don Tapscott

Crowdsourcing – Jeff Howe