It's Not "Our Audience" Anymore

Scott Karp of Publishing 2.0 breaks down the economics of news production and aggregation. It's bad news for Old Media and for bloggers and podcasters who want to get filthy rich.  It's good news for businesses or organizations that can find an audience and feed it. In summary, Karp says content aggregators like Google are far more likely to get rich than content producers:

That doesn’t mean creating content isn’t profitable — independent publishers like Mike Arrington and Rafat Ali can have nice little businesses — but the same phenomenon that allowed them to become business at all will probably prevent them from becoming large businesses. I’ve heard Mike Arrington say he wants TechCrunch to be as big as CNET — the problem is that CNET’s audience is not only being chipped away by TechCrunch but also by hundreds of other independent technology publishers, which limit the growth of TechCrunch as much as they shrink the reach of CNET.

I'll use my company, Learfield Communications, as an example. We've been producing content for mass audiences (on radio) for 35 years.  It's a good business, and a lucrative one.  But in the long run, Karp says, the democratization of the content business will flatten that business, making it harder and harder for content producers to draw mass audiences and make mass money. The slices of the attention pie just get smaller and smaller.

Our interactive division, of which I'm a part, is a recognition that the slices of pie are shrinking. Instead of trying to grow our single slice of the pie, Learfield InterAction is focused on helping others capture their own small slices.  Where Traditional Learfield would rather produce 10 shows with huge audiences, New Learfield would prefer 100 shows with smaller audiences -- as long as that equates to 100 clients reaching their core audiences with those programs. 

The bad news for traditional media is great news for your business or organization. You likely don't have the resources to produce something like BudTV or Instantdef.com. But you do have a message, and an audience of people who find that message valuable. If you can create content for your audience, you can get your own small slice of the attention pie. A few years ago, Learfield would never have told you that you could compete with us for "our audience." Now it's clear that you can.  Our interactive projects are merely a recognition that if we help you compete with us for "our audience," we both come out on top.


Update: paidContent.org's Rafat Ali responds to Scott Karp's thesis without a lot of drama or defensiveness: "For us, it has been and will always be about breaking stories and
providing context and meaning to all of what’s happening in the digital
media industry. As long as we keep doing our jobs on the editorial
side, my belief (call it naive, but really, we have proved it over the
last 3-4 years) is we will be safe, healthy and growing as a business.
As for the rest, who cares…"

Update II: Howard Lindzon disagrees.  My response here.