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May 29, 2005

More thoughts on digital media after D3 conference

My friend Matt Hurst appreciated my comments on the blog and newspaper panels but asked for more of my thoughts about the issues raised during the D3 conference. This note is a start at such a response.

When users access content through a branded source (either a print publication or an online destination), the path by which they reached the content plays a strong role in setting expectations for the credibility of the content. Users increasingly access news content through search engines. This has the effect of giving random access to content. In some cases, users who click on search results can equally well find themselves reading an article in a high school newspaper or the Washington Post.

However, while there is some potential for deceptive publications to mislead readers, the content itself gives many clues about credibility. Many people want higher quality content that has been put through a reviewed process and are willing to pay for this with their attention or their dollars. This point was expressed well at D3 by the newspaper publishers and by Barry Diller. The new access to additional voices seems to me to be purely additive and will not detract from the role or business of mainstream media.

As concerns quality reviewed content itself, a larger threat to newspapers (and to all mainstream publishers) is that high-quality media professionals (like Dan Gilmoor) can exploit the new publication and distribution landscape to go out on their own. To the extent that readers identify with the brands of content (experts, shows) more than the brands of publishers (newspapers, labels, TV networks), this disintermediation can result in a massive transfer of value and control. Mel Karmazin, the Chief Executive of Sirius Satellite Radio, said he believes the users will identify with the content, which motivated his investment in exclusive licensing of Howard Stern to Sirius radio. Moreover, small players can focus on narrower topics that add higher value to niche audiences than does mainstream media. Steve Jobs gave a demo of podcasting, which will both add new voices and offer disintermediation for established content.

With this shift in economics, it is not obvious what is the best way for mainstream media to respond. Intermediaries clearly have to serve as good infomediaries and focus on usable packaging and editorial selection make it easy for users to find quality content they want. However, mainstream publishers are traditionally not set up to provide editorial selection with respect to the long tail of content. I think the struggle to be relevant to more narrow segments is what motivated major newspaper publishers to puchase internet aggregators like Topix.net and About.com. It also is driving the shift in music (and now video) from branded networks and publishers like ABC and CBS to narrowcast technology providers like Sirius Satellite Radio and Apple's iTunes Music Store. Mel Karmazin, suggested that prospects for the old networks are limited in the new media world. If so (still a big if), the strategy for newspaper publishers may depend on the extent to which people want to read news they can discuss with other readers vs. the desire to have news that is most uniquely of interest to themselves.

Posted by barney at May 29, 2005 2:43 PM

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