Emerging media business model frameworks
Today we ran a press briefing on the Future of Media Summit, featuring a sneak preview of some of the research and content that will be included in the Future of Media Report 2007. Last year the Future of Media Report 2006 attracted excellent interest, with now over 70,000 downloads. This year’s report should be even more interesting than last year’s.
The centerpiece will be a number of frameworks that together are useful for thinking about how effective business models for emerging media. Today I’ll share one of those frameworks, with a couple of others coming over the next days before the release of the final report. We’ll also shortly release some of the findings from Nielsen//NetRatings, who as a research partner of the Future of Media Summit has come up with some fabulous global comparative data.
Our framework below shows the differences in business model required for the three major parts of the overall spectrum of media, from the head to the “long tail”.
A few initial comments on the framework.
Audience focus. Mass media only accesses broad audiences, whereas further down the tail highly selective niche audiences, by geography or interest, can be garnered.
Advertising models. At different levels of scale, dedicated, aggregated, or combined advertising sales models are appropriate.
Cost of content creation. Cost of content creation can be taken as a given, requiring a certain audience size or revenue, or considered as a variable to match revenue.
The most important take-away of this framework is that there is no right or wrong place to be on the curve, simply that advertising or other revenue models and content creation mechanisms need to be aligned with the audience. As related frameworks to be included in the Report will show, going for niche audiences can attract stronger revenue relative to costs. A “multi-niche” model which is effectively monetized can be more effective than traditional mass media approaches, by allowing sharing overheads and sales efforts, and gaining more value from highly targeted audiences. Scaling costs and overheads and extracting premium revenue is as viable a strategy as increasing audience size.
