The future of making money with news

New Business Models for News

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business model for socialnetworking sites

An article on nytimes.com about business models: twitter and yammer. It's basically saying twitter is having problems and trying hard to find a business model after already gained popularity, while yammer is rather small but started with a business model, which is a paid one dollar per user model focusing on company users. 

It's argument is: under current economic environment, scale is might not be the most important thing because popularity does not guarantee revenue. Not to mention popularity is hard to get. Here's the quote at the end of the story:

“Now it doesn’t matter if you want scale first because you just can’t have it,” said Paul Kedrosky, a senior fellow at the Kauffman Foundation. “You have the luxury of being able to decide between small and focused on revenues or large when you have capital. When there isn’t money, there’s no choice.”

If the value is still content, then what content and how should we package the content?

As Picard said, 

A business model involves the conception of how the business operates, its underlying foundations, and the exchange activities and financial flows upon which it can be successful.

Different media need different model. What fits one medium might not fit another. Right after reading Gao’s Participation Business Model, I started thinking if we could use a participation business model for online news. Many newspapers’ online sites indeed have participatory features, such as blog, comment, rating, or allowing users to submit photos and videos. These do not seem to be very innovative or popular features if we compare these features to MyShow, Super Girl, or American Idol. 

Probably participation is not a major “value” users expect from a newspaper web site, as both Picard and Gao emphasized value is the center of a business model. So if we go back to wheat Picard said that content is the core business of publishing industry, then now in the digital and online environment, what “kind” of content? Instead of telling people what to do or what to read, why not say: how may I help you today? In addition to what kind of content a user would value from a local newspaper site, a different kind of navigation maybe? Something like google's front page or iPone's main page that there are several preset icons and users can modify those icons. 

11 troubled Web companies

Here is the article I talked about yesterday

http://news.cnet.com/8301-17939_109-10063020-2.html

As the post says,

The problem is that being loved is no guarantee for success. Even being used isn't enough.

Newspapers and their future

Oh, the pain. Just thinking about newspapers and the challenge they face wants to make you sigh and almost shrug. Like our economy, it's going to be a whole lot worse before it (ever?) gets better.

Principally, this because ... breathe deep here ... there is no business model ... at least not one to sustain current ways of doing things, and that's a key distinction. We have to think about the work of journalism may change in the future — from gatekeeper to gatewatcher, from content creator to content curator — and then we can better explore and predict ways in which the economics might make sense.

Consider some writings in this area ... first, Nicholas Carr lays out the central problem in The Great Unbundling.

“How do we create high quality content in a world where advertisers want to pay by the click, and consumers don’t want to pay at all?”

The answer may turn out to be equally simple: We don’t.

Clay Shirky, a fascinating thinker on all things new media, picks up with this:

We should stop worrying about the newspaper as a whole, and instead turn our attention to the important question: taking unbundling as a given, what bits merit saving? It isn’t the physical fact of newsprint, or the expensive yet ineffective classified ads, or having a movie reviewer in every town.

What’s worth saving, as a critical function, is investigative journalism. We need someone, many someones, to do long, deep, boring research, for stories that may not even pan out. Without that, government at all levels will simply slide back into the nepotism and corruption of the 19th century.

That is the challenge we need to take on, and as Carr notes, it’s not one currently being met well on the Internet.

However, it’s not obvious that the old ways of producing such journalism are better than any possible future ways, both because the current model is far from perfect, and because the Internet brings a suppleness to media design that has barely been flexed yet.

So, we need to experiment ... and fast. The transition will be messy, but new models are emerging that offer some hope. Finally, consider Jeff Jarvis' picture of newspapers in 2020, as well as 10 questions he says news organizations must confront going forward. (Key among them: "Who are we?")

Ultimately, though, the stats are numbingly bad. Time to panic, and for the news industry to actually act like it.