Money talks
- 4 May 06, 03:55 PM
As the We Media comes to an end, the discussions have got round to the issue that is bothering most media organisations - how can we make money in this new digital world?
Carolyn McCall of highlighted the challenge facing companies like hers. Newspaper rely on advertising and classifieds. But readers are moving online and using services like Craigslist and expect to use these services for free.
The short answer is that no one has the answer, but there were a few possibilities.
For newspapers, 40% of costs are due to publishing costs. Abandoning paper would mean instant savings.
McCall said something that most in the print industry would consider heresy: "If the Guardan is not a newspaper in 10 years' time, but has more influence, more community in 10 years, then we will be more successful."
This is important as it identifies a media company by what it does, rather than what platform it uses. Newspaper bosses have to consider that the way they distribute news in the future may be on mobiles, PDAs or something else still to be invented.
David Sifry of identified two trends that no media company can ignore if it hopes to survive. First is the spread of broadband and ever more powerful mobile phones.
The other factor is that people increasingly have the ability to make their own films or set up their own blog. What industry calls consumers are evolving into producers. This is a trend that has been under way for some time and the popularity of video-sharing site YouTube reflects this.
Does this mean there is no place for The Guardian or the 成人快手? The answer is that some people will want a trusted source to sort out through all the information out there and make sense of the world.
This brings us back to the first session of yesterday on trust. The media organisations that can retain the trust of the audience will be best placed to survive in the years to come.
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Consumers can now easily research, find and compare goods and prices on the Web. They pay less attention to advertising. Therefore there's less return per buck spent by advertisers.
It's a crisis for the advertising industry foremost, producers second and the media are collateral damage.
Take the Artic Monkeys. It wasn't advertising or even a promo website that broke them but recommendations (viral word of mouth) on MySpace etc that created their following.
The problem for Bloggers and contributors to free access online media like Newsvine is that there's no guarantee that advertisers will stay with net companies. The advertisers are trying to see if people have migrated to the 'new' media. Truth is they don鈥檛 know. But if people now pay much less attention to adverts then the funding model collapses.
Bloggers may be in for a nasty shock if they鈥檙e asked to pay a subscription to continue blogging. Or if readers are asked to subscribe in order to read them.
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