Posts Tagged ‘New Media’

As each new technology pops up that promises to help me connect more efficiently with my friends, I have begun to wonder what I’m really seeking with each new product. Am I aiming to streamline my communication processes as much as possible so that I can increase the number of people I’m having it with? Am I’m simply an early adopter that wants to check out the newest shiny object?

Most likely all of these things apply to me, but what I’ve begun to notice is that I am really using all of these tools for the purpose of social discovery. Social discovery is simply one method of finding content in this limitless sea of content we call “the internet”. It is increasingly my preferred discovery method as I have found a vast network of individuals that share similar interests.

To understand social discovery I think it is more important to understand the activities that we are engaged in when using the internet. Ultimately, all internet usage is simply the transmission of media. Occasionally we transmit other information used for purchasing physical good but the discovery of those products and services involve the transmission of media.

New Media Lifecycle

Over the past few years I have become increasingly active in all phases of what I now define the “new media lifecycle”. All of these “tools” that new technology companies are creating are for the most part trying to make at least one phase of this cycle more efficient. I define the new media lifecycle as the stages through which new media typically flows. Not very complex!

To expect new media to flow in any continuous direction is ludicrous but I have found there to be three stages that new media flows through. I think determining a starting point of new media is the same as determining what came first, the chicken or the egg. As such, you could enter the new media life cycle at any point during one of the following three phases:

1. Content Creation – Audio, video, text and images are all types of content that is produced in new media. In contrast to days of old, media can now be produced by anybody, not just the large media companies.
2. Content Discovery – Discovery is probably the most important phase of the lifecycle for technology companies as they are the ones developing the tools for discovery.
3. Content Consumption – Content can be consumer in practically an infinite number of ways. The consumer is the one that chooses the medium they prefer. It can be mobile phones, computers, televisions, stereos or a number of other mediums.

One other important thing to note is that there is no requirement to be part of the content creation phase as a consumer. Soon enough content creation will be an activity that practically every consumer engages in whether they like it or not. Their activities will automatically dictate the creation of content. For now though, it is still possible to simply watch what is going on.

Social Discovery

I think social discovery is one of the most fascinating parts of the new media lifecycle because we are so early in determining the most efficient way of social discovery. Search has now been dominated by Google and while new companies attempt to attack what is increasingly becoming a monopoly, most companies have realized that the space of social discovery has yet to declare a winner.

What is social discovery exactly? Well social discovery is the usage of social tools to find relevant content. A social tool is a system which enables the sharing of content with other users. That content can be as simple as the activities users are engaged in such as “Nick just played MouseHunt on Facebook” to the modification of my social profile to the sharing of a video, image or song that I thought was good.

Some have suggested that the current battle on the social web is over the most efficient newsfeed. I think it should be framed instead as the battle over making the most efficient social discovery tool. Feeds are simply one way of displaying content. It may very well be that feeds are the most effective way of displaying that content but I think this is still up for debate.

Over the past few weeks as my digital social activity has become stretched across FriendFeed, Twitter, Plurk, Facebook and other places, I have begun to ask myself where the real value is in any of these things. The reality is that a valuable community that I feel connected to is most important. As we strive to build new technologies that help us connect more efficiently I think in the end all that matters is the community.

Email continues to be an extremely basic form of communication but what makes it so powerful is that I can access anybody via email. Even though it helps, it doesn’t really matter if your technology is the most efficient. What matters more is that your technology has a community backing it. As the early adopters chase after the latest shiny social object trying to dissect the pros and cons of each feature, I’d wait to see where the real communities form.

In my own opinion, while social discovery has yet to be monetized effectively, social discovery currently provides the greatest opportunity for breakthrough growth.

Over a year and a half ago I started blogging on a regular basis after hearing one of my ex-clients consistently mention the names of writers that I was completely unaware of. Today, names like Mike Arrington, Om Malik, Rafat Ali, Richard MacManus and more recently Matt Marshall and Henry Blodget have become common for many in the industry.

Over the past couple months, many wondering whether or not these sites would ever amount to something big have received validation for their visions. ArsTechnica was sold for $25 million and then last week PaidContent was acquired for a rumored $30 million. Now Kara Swisher reports that Techcrunch could soon sell for between $20 and $30 million.

Many believe (as well as myself) that this is only the beginning of a continuing trend of consolidation. Considering the downturn in the economy, consolidation makes a lot of sense nowadays. So when all is said and done and the consolidation is “complete” with the technology blogs, who will really end up the winners?

Still an Incestuous Community

Today I sat in a deli chatting with a girl who’s studying in a university program entirely about social media. While it was difficult to believe that there are actual programs for social media, she appeared to be unaware of sites like FriendFeed, Twitter or any of the new iPhone applications. We did engage in a great conversation though about the future of media and it was clear that this was a topic that she regularly discusses.

As usual, the university was successful at teaching much of the theories but much less effective at teaching practical things. This isn’t a dialogue about effective educational strategies though. What became clear almost immediately was the little bubble that I exist in. I have a few hundred friends on Twitter, FriendFeed and Facebook that I regularly discuss the hottest trends with which are being published on my blogs and larger sites like Techcrunch, Read/Write/Web, Venturebeat, etc.

Nobody else is part of this conversation though and while some people that were less vocal in the community become more active an more noticed, there are few people (in my own opinion) that are rapidly joining the conversation. Instead, we continue to have our watercooler talk about the hottest new trend in the valley (and other emerging hot-spots). Rather than the watercooler though, we hang out on FriendFeed, Twitter, Facebook and for me occasionally Plurk.

The watercooler talk only builds personal value though, giving many of us a strange sense of belonging. At the end of the day though, my FriendFeed really doesn’t add much value to the world and thus cannot easily result in money.

Where is the Value?

So if the various online social activities I’m involved in don’t really build much value outside of personal gratification, where is the value? Well, it’s clear that there was value in the larger blogs that were acquired but what where was the actual value? For Ars Technica it was clear that the site has a substantial amount of traffic and they obsessively cover technology. That was their value. The company is simply a technology publication though.

Compare that to PaidContent.org where the traffic may not have been as substantial but it attracted the right audience. The company also regularly hosted events including conferences and mixers which generated a substantial amount of sponsorship revenue. On the surface it appears that events are a much more lucrative business for the company. It also appears that they don’t have close to the amount of traffic that Techcrunch or Ars Technica.

PaidContent’s value? They obsessively covered and connected the digital industry.

Two Winning Strategies

So no matter which way you look at it, obsessive coverage of a specific niche or industry is a pre-requisite to building a successful new media entity. The second component is where strategies can differ.

Breaking News
If you want to build up a substantial following and consistently grown in numbers you must always be breaking news. In Glengarry Glen Ross, Blake (played by Alec Baldwin) says “Always, Be, Closing.” Mike Arrington on the other hand would tell you “Always Be Breaking.” Techcrunch and a number of other sites are in the business of breaking news.

Breaking news will generate a substantial following and will help you attract temporary boosts in traffic. The problem with this model? You’ll never sleep … ever. It’s unsustainable (unless you are Mike Arrington) and there is no end.

Connecting An Industry
The second model, which in theory could be merged with the first model, is connecting the participants in an industry. Hosting events and providing platforms for people to connect in an industry is the second most important component. Tech newsletters have been able to compete in this regard as they have a substantial reach (30,000+ subscribers for the large ones) and regularly produce events. The newsletters don’t have the requirement of breaking news though.

The offline component of media companies has practically become a necessity. The smaller more targeted media companies end up finding themselves producing events more regularly whereas the large media companies have the luxury of traffic generating enough revenue.

The Future

So where is all this going? It’s pretty clear that consolidation will happen quickly. The old media giants can snap up the new media competitors easily as they sit on a ton of cash. Within the new media companies, I believe that we are going to also begin to see consolidation. Breaking internet tech news has practically become dominated by Techcrunch.

A few other companies can compete but ultimately consolidation among the remaining news-breaking sites would help create a viable competitor to Techcrunch. While Mike Arrington’s Techcrunch could have somewhere between $2 – $4 million in the bank (complete guess), it won’t be enough to snap up the competition without a round of funding.

The old media companies are looking to acquire companies that compete in terms of content, traffic and have a hold on their industry. The next 12 – 18 months are going to be interesting because we are going to start seeing consolidation in the smaller sites which I believe will help to form no more than 5 to 7 technology media giants.

Do you agree that this will happen? Do you think the smaller entities will be able to put their egos aside to allow consolidation or does everybody want to run the large giant tech media publications?

Clay Sharky has written a blog post which is essentially a transcript of his much discussed presentation earlier this week at the Web 2.0 Expo. His talk discussed the transformation of media and how individuals are being transformed in to media participants after existing only as media consumers for the past 30 years. One of the core components of the discussion surrounds the following statement:

Media is actually a triathlon, it ‘s three different events. People like to consume, but they also like to produce, and they like to share. [This is in contrast to media in the 20th century which was run as a single race--consumption.] And what’s astonished people who were committed to the structure of the previous society, prior to trying to take this surplus [a cognitive surplus] and do something interesting, is that they’re discovering that when you offer people the opportunity to produce and to share, they’ll take you up on that offer. It doesn’t mean that we’ll never sit around mindlessly watching Scrubs on the couch. It just means we’ll do it less.

Clay proceeds to jump into some back of the envelope calculations on total cognitive expenditure by humans via television and compares that quantitatively to the shift toward participatory media. One of those calculations concludes that if 1 percent of all time spent consuming television worldwide is used on participatory media, there is enough cognitive energy to generate 10,000 Wikipedia projects per year.

As Clay Sharky states, the concept of “I can do that, too–is a big change.” Andrew Keen is somewhat accurate when he complains (in “Cult of the Amateur”) that the quality of media being created by individuals is not on the same level of the media being produced by the professional media. While all the media being generated by users is not necessarily “good media”, it is still better than traditional media that has been given to us simply for consumption and nothing else.

Rather than spending our “cognitive surplus” on just the consumption of alcohol and television as we have over the past century, this century will have an increase in people using their cognitive surplus toward new media creation. Is this going to create the downfall of traditional journalism and media? Not completely. I’m still going to enjoy a good television show (even if it doesn’t come to me via the television), but I’m also going to spend a lot more time participating (as I do with this blog).

Given the shift of cognitive surplus allocations, how do you plan on using yours?

If you wanted me to give you a one word summary of newspapers in the future I would say: dead.  That’s not really the truth though and it’s not an accurate global picture. The reality is that these companies, while slow to adopt new technologies for the most part are catching on and with cash in hand they are going to start snapping up those companies that understand new media most. So what is the consistency of an ex-newspaper company, future “new media” company?

• Researchers – Researchers may be one of the most important members of the new media company. These are the people that are constantly sifting through information and determining which articles to write about. They also don’t just find information through their filtering system but they also inquire to individuals to get commentary on issues in addition to getting more information about stories. Frequently the line between researchers and writers can be blurred.
• Producers – The producers are creating content that will be displayed and promoted. They are the writers, podcasters and video production teams. The average visitor comes to the new media company’s site to consume the content created by the producers. While the producers are frequently looking for content, just as the researchers do, these individuals’ specialty is in the art of creating unique and intriguing content.
• Editors – The editors are simply experienced producers. They have learned the lessons that new media has to offer and now they are teaching this to others. The editor also produces content on occasion but their job is more about teaching rather than doing.
• Designers – If you are building a new media company from the ground up, it better look good. You could argue about this until the cows come home. To the naysayers, I know that the Drudge Report doesn’t look great but then again they have a proven track record of breaking news stories time and time again. All I will say is that it is much easier to sell something when it looks good. In addition to designing your own site they will be providing design services to all your advertisers. Remember those people? Yeah, they are the ones that help keep you in business. If you make them look good, they will reward you generously.
• Developers – The developers make everything happen. You need to have developers to help you say on the leading edge of new media. This requires constant innovation and keeping a pulse on emerging technologies. In turn, you can provide your advertisers with more unique advertising solutions.
• Community Managers – The community managers loves your community. Every new participant in the community needs to be welcomed and supported. Without these guys your company is going to lack product evangelists and it will also lack transparency. You want anybody to be able to contact you and you want to respond to most inquiries. Each organization has a different ratio for number of active members to each individual community member. If you need to start calculating this, you are headed in the right direction.
• Events Coordinators – New media companies are master connectors. They help connect the community. While the connecting is done by the executives, the event coordinators help to organize “real world” events which enables people to connect on a personal level. If your company is the center of connecting people, you are going to be insanely valuable.
• Business Developers – This is straightforward and it’s the same way it has always been. You need a business development team to make money! This team helps you generate revenue and revenue is always a good thing. Hire people that have built a solid network with big advertisers and you are destined for success.
• Executives – Executives are the super-connectors and managers. While the management is more important, being able to connect people to generate partnerships is critical. The executives also set the vision for the organization so they better know what’s going on.

The new media company doesn’t simply write about the community, they are now forced to connect with the community. While there are more roles that could be added to this theoretical organization that I’ve written about, the main point is that while there are still similar roles and tiles, the roles have changed and the system has been transformed. While not the majority, a large percentage of content consumers also want to be engaged with the organization that is providing them with information.

Is there anything that I’m missing from this?

Glam Media must have some lofty goals for their women focused media network. Today they announced that they’ve raised an $84.6 million round combining $64.6 million in Series D financing and $20 million in debt financing. This is one of the largest rounds of financing for a “new media” company. Glam Media is a large ad network across over 450 lifestyle websites and blogs. Just about every week I receive a news alert about Glam Media hiring another executive to their management team. Apparently they don’t like to run things lean.

Last August, Mike Arrington asked if Glam is a big sham. Matt Marshall disagreed but also pointed out that the majority of Glam’s traffic comes from larger websites such as MyYearbook.com, Meez and Dogster. Having most of their traffic based on a few key partnerships is highly risky especially considering that even larger such as Fox and Google have the potential to split their ad deals.

One of Glam’s largest competitors is iVillage which is owned by NBC. The most interesting aspect of this round of financing in addition to previous rounds is how comScore data is consistently used to prove their lofty valuation. Month after month Glam Media is listed among the fastest growing websites. There are rarely any other statistics provided and it makes these deals a little bit sketchy. With almost $85 million in the bank you can bet that Glam’s investors have done their due diligence and have verified that these numbers aren’t all smoke and mirrors.