And yet there is hope. As Andrew Keen put it (in the ‘The Cult of the Amateur’):

“The one resource that is challenged all the more by this long tail of amateur content is our time – the most limited and precious resource of all”

Our old world media moguls may have lost control of the content creation process, but perhaps here is the breach that they have been searching for. People need editors and filters to help them sort the dross from the slop.  Just maybe our media moguls can evolve into ‘content curators’ and take back the initiative in the information revolution.

Navigating the content explosion

In an earlier article we defined the media as ‘the medium through which we communicate’.  When newspapers and television networks ruled the roost, media moguls were able to extract their pound of flesh because they controlled the medium – we had to go to them to get our content.  The flipside was that we had little choice about what we listened to or read – think of the dread in the pit of your stomach when “Little House on the Prairie” invaded your lounge room.

But in the new world order, with the distribution of content being virtually frictionless, media moguls no longer control the medium.  Content created by their machines must compete with the wall of noise emanating from the internet.

Herein lies the dilemma.  There are too many dishes on the menu.  How is the audience to choose where to spend their time?

Outside the traditional media formats, there are essentially three (sometimes overlapping) ways that the audience can get help 1) via content aggregators, 2) via search engines and, increasingly, 3) through social media channels.

Content aggregators

The content aggregator is perhaps the most despised foe of the media mogul.

Content aggregators are generally publishers of others (on-line) material.  They generally get their content for free.  Likewise their content is typically free for users, although they often have advertising on their sites and may charge subscriptions for premium services.

It is also useful to distinguish between those sites that aggregate content from non-traditional sources and those that aggregate ‘news’.

So in the red corner, you have aggregators such as The Huffington Post, Seeking Alpha and The Business Insider that aggregate content from blogs and other sources outside the mainstream media.  Standing next to them are the aggregators that are taking former advertisers direct to their target markets.  In the local arena, a site like Boardroom Radio publishes podcasts from listed companies and financial institutions.  In this case, the aggregator is providing the medium for contributors to talk directly to users of the site, presumably investors, thereby avoiding the need for a middle man media to paraphrase the ‘press release’.  Similarly, Morningstar are taking their first tentative steps in a similar direction.

Contrast this with the ‘news’ aggregator in the blue.  Examples in the Australian context are news aggregation sites like the Business Spectator, ABIX, NewsBites.    They summarise news from traditional sources and link to it.  These are aggregation sites that have a human editorial touch.  By contrast sites like GoogleNews and Wotnews collect newsfeeds automatically (Google using its seven secret herbs and spices – Wotnews with a semantic search engine and sonic screwdriver).  A site like Silobreaker uses a blend of both.

So where does the media mogul fit in all this?  Uncomfortably.  The ‘independent’ aggregators are beyond their reach.  The ‘news’ aggregators are feeding off their blood.  The audience just doesn’t have to come to the media mogul’s site anymore, and even if they do, the content is often free.

As Sally Jackson writing for the Australian records:

“Online operators with minimal overheads are really beginning to hurt established media organisations, not by generating their own content, but simply by linking to and abstracting third party news content for their own benefit…”

We have crossed the border into Tlön where “The concept of plagiarism doesn’t exist: it has been established that all works are the creation of one author, who is atemporal and anonymous”.

On the face of it, things look pretty grim for the media mogul.

The search engines

“The ultimate search engine would understand everything in the world.  It would understand everything you asked it and give you back the exact right thing instantly.”

Not sure Larry Page’s burning bush (from an article by Richard Wray in the Guardian) is going to make our media mogul feel any better.  They’d only be happy for us to get ‘the exact right thing instantly’ if we’ve paid them for it.  It’s exactly with this objective in mind that Murdoch has said that NewsCorp will be taking the WSJ ‘pay for access’ model global.  Even more to the point was his proclamation on SkyNews (of course) that News was going to block Google’s access to their sites.

There has been a good deal of to’ing and fro’ing as whether News stance is sensible or, ultimately, even enforceable.  For example, Bill Tancer from Hitwise published the following charts which show that Google delivers in excess of 20% of the WSJ traffic while making the point that “blocking Google could isolate the Journal from potential new online subscribers”:

But in the context of what we have just discussed, it doesn’t seem like Rupert has much choice.  It is not as if he is getting any actual money from these readers anyway (unless the value of his online advertising declines as a result of a reduction in traffic).

And even more interesting is the thought that perhaps Rupert is right.  That search engines are less relevant than the data seems to suggest.  A search engine may be useful for finding the answer to a specific question but in a world where information is abundant, maybe we just don’t need search engines to deliver us our daily content.  And this is where social media steps in.

And social media

One more quote just because it has all the bland arrogance one might expect from a new media mogul.  From Mark Cuban’s weblog:

Having to search for and find news in search engines is so 2008.

The point he goes on to make is that Twitter and FaceBook are where people are gravitating to find content – or more correctly how content will find them.  In the context of our information rich world this makes sense.

This is where the power of the local or the community wins out over the global brand.  With content, particularly if its of the ‘news’ variety, being so damn portable, its distribution will move to where the community is online.  The best a media mogul can hope for is that the relevant content will be linked back to in a way that readers must view the original content in the manner in which god intended.

Note too that the social media sites do not have to be of the name brand variety.  As we noted in an earlier article, sites like The Slope of Hope and Zero Hedge have dynamic communities that define them as social media just as much as Facebook or Twitter.  The point is that these communities of like minded individual’s effectively act as the content filter.

Finally, there is the role of the realtime search engines that are being developed to search our social media.  There is a motley collection of developers putting together the next generation of search and aggregation platforms – Topsy, Collecta, One Riot, Lazy Feed, InfoNgen and the self styled ’stealth startup’ Wowd (If you are interested in comparing their functionality – try searching for “Murdoch” on each – given today’s announcement about the discussions between Microsoft and News – you will get all the real time search results you will ever need.)  Not sure I really understand.

Conclusion

So is there hope for our media moguls in these trends?  Certainly they make Murdoch’s recent action’s intelligible – he doesn’t have much of a choice.  At the risk of over-simplfying, the challenge for the media mogul is then:

1) to create desirable content – so as to compete with the non-traditional media aggregators

2) then restrict its portability – to cut-off the bloodflow to the ‘news’ aggregators (access granted if they are prepared to share their revenue)

3) and make it relevant to communities – enabling social media to index and link to original content

Does this make them ‘content curators’?  Not really, but I’m happy to pretend if they bury the Little House under the Prairie for all eternity.

Next article we will look at the financial sector specifically – where news and analysis is valued for its utility not necessarily for its ability to entertain – to see how these trends are playing out.

Once upon a time, life was simple for a media mogul.  Apart from adjudicating on the occasional territorial dispute between the offspring, there was little to fuss about.  But ever since this pesky internet made stone tablets redundant, things just haven’t been arights.

Everyone’s a content creator

Early signs of trouble came with the democratisation of content.

The internet enabled modern man to participate in the coverage of world events in a way that was not possible before.  This created a problem for a media whose job it was to ‘break the news’ to the masses. Consider the case of Tiger Woods enforced layoff.  His gap year was first announced on twitter – Nike’s share price responded accordingly – before the traditional media got hold of the story (Paul Kedrosky at Infectious Greed summarises the timeline neatly).  No longer was the ‘old’ media the only conduit for our news.

But it didn’t stop there of course.  The internet had also given birth to the ‘noble amateur’ – the humble citizen blogger that created content for free.  Whether such analysis and commentary was equal in quality to the journalism that it effectively competed with is a moot (yet hotly debated) point.  The real problem was that the creation and distribution of all this free content was happening beyond the traditional media’s control.

And it was not only the ‘amateurs’ that were creating free content, former advertisers started to migrate to the web as de facto ‘media owners’.  Consider the example of Babycentre.com – the online self-help tool for expectant mothers (and fudders).  Johnson & Johnson bought the website for US$10m in 2001.  According to web monitor Alexa.com, Babycentre now has in excess of 1m daily visitors with approximately ~10% of users going to the online store.  (Not that this has impacted J&J’s advertising spend – it’s annual advertising budget is in excess of US$2bn.)

Financial media following these same trends – just differently

Trend #1 – new conduits for breaking news

This is a big topic in the financial sector as ‘breaking news’ can, at times, assume epic proportions.  Additionally, it is often synonymous with data (changes in prices, indices, rates etc).  As such, it is a topic all of its own that we will return to at a later date.

Trend #2 – amateurs as content creators

The financial sector is awash with content that has been created by those outside the mainstream media.  Leading the revolutionary rabble are blogs like Naked Capitalism, Mish’s Global Economic Trend Analysis, The Slope of Hope, The Pragmatic Capitalist and Zero Hedge (to name a few of my favourites – for a longer list have a look at The Periodic Table of Financial Bloggers).  These sites have daily circulations that would make a respectable money magazine blush with envy.

Then you have content delivered by websites like Seeking Alpha that publishes over 250 articles daily from a list of over 2500 contributors with around 40 million page views per month.

Perhaps, it is a bit rich to call all these blogs the creation of ‘amateurs’ in any event – the quality of their content often belies the author’s roots as a participant in the industry they are ‘reporting’ on and they can sometimes provide a greater depth of insight than can be found in the mainstream financial press.  Also consider the blogs of the likes of Paul Krugman, Brad de Long, Michael Pettis and Steven Keen – all practicing experts in their fields.  Finally when a global quango like the IMF and even the US Federal Reserve embrace the technology, you can begin to understand why there has been an alarming rise in irritable bowel syndrome amongst our media moguls.

One other notable feature of these types of sites is that they have also given a voice to the communities that have coalesced around them.  Typically, these blogs can boast vibrant networks with membership based a on willingness to participate.  The media machines of old have difficulty adapting their gears and levers to take this type of interactive relationship with readers into account.

Trend #3 – advertisers as content creators

As to advertisers jumping the virtual fence, the response of the finance sector has been varied at best.  There are a number of reasons for this – the trenchant conservatism of the sector, the conflicts that abound, the lack of clear benefit, the fact that the sector is so bloody crowded from big to small.

Early adopters in creating and distributing free content have typically come from the funds management industry in its many guises (from hedge fund to financial planner).  Unlike the clone army, that is always looking for a quick clip of the ticket, this sector typically draws it income over time.  Not only must they perform but, importantly, they must demonstrate their expertise and build a relationship based on trust.  The interactive blog format is ideally suited to this end.  It is perhaps for this reason that they have been at the forefront of adopting these technologies.  While still in its infancy in Australia, there are a legion of fund managers globally that are representative – consider the examples of Jeremy Grantham, Bill Gross, and John Hussman.

It’s reasonable to expect this trend to permeate further into the industry as corporate websites become increasingly irrelevant as a destination.  The real-time interactive aspects of the internet will mean that advertisers are increasingly likely to find conversations about their products happening in ’social media’ forums.  The challenge for the product owner will be to participate in these conversations – whether directly or by promoting them to link to their own content.

Conclusion

In summary the financial sector, while perhaps lagging others in some respects, is participating in the explosion of content that now sits outside the traditional media sector.  In the next instalment we will explore what avenues the media mogul has to coral this content and recapture the initiative. Till then, it’s cod liver oil and more roughage I’m afraid.

Postscript – 24/7 Wall Street published a list today of the 25 most valuable blogs in the US – they value Seeking Alpha at US$16m…

Central to this acceleration has been the role of (the) media.  While the evolution of media (defined as the medium used to convey information) should probably start from when the Sumerians created the first punched card, let’s truncate the story.  By way of explanation, consider the following:

Why start at the Gutenberg press?  Well, when Herr Gutenberg was pinching his brow squeezing letters into a grid, he was creating a way to efficiently communicate with a mass audience.  This, to me at least, is the genesis of today’s internet.

Skip forward some 500 years (there is a book or two in between) and the age of the shredded tree as the medium for distributing the message was brought to an end.  The internet has delivered an exponentially increasing ability to communicate.  Intuitively this can be understood as a shift from a broadcast model to an interactive model for communication.

Now we have a media where individuals can communicate with many at the touch a few buttons.  Conversely, the advent of social media tools has flipped the scales such that just one of the faceless many can simply reply to the thoughts of the individual.  It’s a fundamental shift to the way we communicate – I see it in my kids whenever I chortle at them to get ‘off the computer’.

So where does Australia sit on the media evolutionary tree?  The following chart is my best guess…

I’m expecting a big leap to the right, particularly when the real power of mobile media technologies is unravelled.

Let’s start by looking at the adoption rate of social media technologies in Australia.  The following chart is becoming a little dated (as it relates to data collected in 2008 by Forrester Research – Technographic Surveys):

It summarises the way that different demographics in the US and Australia use social media.  There are six overlapping levels of participation defined:

1) Creators – make social content

2) Critics – post ratings, reviews, comments on blogs & forums

3) Collectors – use RSS feeds, add “tags” to web pages & photos

4) Joiners – maintain a profile on a social networking site

5) Spectators – read blogs, watch videos, read forums

6) Inactives – none of the above