As podcasters and webcasters and such try to turn a buck they come up against fixed ad revenues.
Ad model is a problem
(Note several comments came in based on those two sentences before I finished this post)
The main point I’m trying to make here is that the internet has created a remarkably cheap and effective content distribution mechanism – a global soapbox for anybody who cares to make a point online. The cost to publish online is now essentially zero for all but very large scale online publishing efforts. Although eventually the number of publishers will level off as everybody who wants to be online gets online and the dropping out folks balance the new arrivals, I think we are still early enough in that process that there’s a lot of new website and blogging action ahead of us.
This suggests that it may be increasingly hard to become a *Media Mogul* even in fairly specific niches. We’ve seen the rise of mini moguls like Arriana Huffington in the Political space, Mike Arrington in Technology at TechCrunch, Jason Calacanis , and Nick Denton of the Gawker Yellow Journalism and Celebrity Blog Empire, but I think the success of early blogs is more a transitional thing than a trend that’s going to stick. Few blogs make much if any money and that’s not likely to change a lot although I suspect we’ll see lots of hard working good writers find comfortable niches of expertise managing to make a living providing online content – at least until the machines start to slice and dice and repackage online information so effectively nobody can tell if it’s organic or artificially intelligent organization.
Now, contrast this trend towards many publishers with the fact that online advertising total spending may actually decline in 2009, and more importantly can only grow so much. Now, it’s true that the online spend is currently low enough that we may see online advertising grow enough to support the growth of online content for some time, but my guess is that content is growing many, many times faster than online advertising it needs to be profitably supported. Luckily for users the content is not going to go away and will keep flowing online, but unluckily for online publishers they are going to have to produce more and more to make the same amount. We’re already seeing this trend with sites like TechCrunch which often spin out dozens of articles daily.
As an online publisher myself I’m not really sure how to address this challenge. Certainly I tend to favor keeping expenses under control and not making the mistakes we did earlier in the travel empire by spending too much to improve websites that were always under the gun of Google’s somewhat algorithmically arbitrary content policies. Better I think to use small amounts of capital to seed a lot of project and then fund the winners and let the losers whither on the vine. I’ve written a lot about this process which I think is somewhat analogous to biological evolution where smart businesses actually are usually working away from failure more than towards success. I know a many successful business folks (and perhaps even *more* biz wannabes) would bristle at the notion that serendipity plays as much a role in success as careful, reasoned strategy but the more I see of success and of failure the less convinced I am that formulas play much of a role. Sure it helps to work hard, have a general idea of what you want to do, etc, but like evolution I don’t think a whole lot of planning is the recipe for most success stories. On the contrary you find engaging people engaged in things they enjoy and are very good at doing, and you find lucky breaks or circumstances that propelled thos particular people to fame. Music and sports are a great example of this – for every thousand excellent singers or sportspeople there are only a handful of superstars, and the road to that stardom is often littered with personal tragedy as well as the failures of the other 999 folks who didn’t make it. I think the reason we tend to think there are success “formulas” is that we examine success too much and failure … too little.
OK, I got too far afield – must be the turkey talking. Hmmmm …. where is that leftover stuffing anyway?