There are quite a handful of people who told me that the market cap for media industry is fixed and it is too small a market to fit more than 2 or 3 tech media outlets.
“Your time is better spent tackling problems in bigger market”.
Apart from the fact that I have little experience in other verticals and I dont have a real problem worth solving which I can relate to, I’m super passionate about telling stories and putting things together into thoughtful pieces.
I think there’s a very real opportunity here in the content space, and I’m getting more and more excited every, single day.
1) More people coming online
As I wrote in my previous article, Internet penetration as a whole is going up everyday, and we are consuming more content than ever before, thanks to access to mobile. More people are getting access to Internet, what this means too is that the absolute online traffic will only continue to grow, especially in Asia, where internet penetration is relatively low but they are growing faster than anywhere around the world.
All of these new traffic source (demand) is looking for reliable news site to consume content (supply). Also, online traffic is not a zero sum game: news site with the most interesting and consistent content (in terms of quality and quantity) will win the loyalty of the readers.
In the next few years, there are hundred millions of internet users coming onboard from Asia looking for content to consume.
This is a big deal.
Increasingly, conversations between media outlet and readers will be more important than ever before. Media outlets in this part of the world is still very much engaged in a one way conversation with readers.
Also read: Blogs are no longer just blogs
2) Traditional news site shifting online
Print is dead. Magazines are shutting down. Cable tv, Radios and old medias are looking for new ways to engage their audience, and all of these ways point to one direction: online, where all the users are congregating.
The segregation of these traffic will diffuse to other new media outlet which often can move fast enough than old clumsy traditional news site (though of course they usually have greater financial backing).
Look at it this way: traditionally, we can only cross from one country to another country by ship (before the invention of aeroplane). With Aeroplane, all of the sudden, a person can buy a budget airline ticket, a first class ticket, or he can take multiple pit stops, and he can choose whichever airlines he is pleased with.
Similarly, we used to rely on traditional media outlet for information. We can only gain access to information through the nation’s newspaper or the national television. With Internet, all of the sudden, we can consume all the content we want, in whichever ways we want.
3) Marc Andreessen
Mr Marc Andreessen, a popular Venture Capitalist engaged in a Twitter conversation just a few days after I wrote my previous post, saying that he is (and I quote) “more optimistic/bullish about future of news industry over next 20 years than almost anyone I know. Will grow 10x-100x.”
Exactly my point #1.
He also argued that:
- Distribution going from locked down to completely open, anyone can create & distribute, no $ premium for control of distribution.
- Formerly separate industries colliding on Internet. Newspaper vs magazine vs broadcast TV vs cable TV vs wire service, now all compete.
- Market size dramatically expanding–many more people consume news now vs 10-20 yrs ago, many more still in 10-20 yrs. Big, big deal.
This is a great assurance to the content industy. If you need more signs, Jon Russell of The Next Web recently painted a great picture on the growth potential of the content industry:
4) Access of information
Another reason why I’m bullish about the content industry is this, the person with the access of information wins. Everyday, media outlets get pitched hundreds of stories, and it is easy to spot who’s the new popular startup, and the next big thing.
Of course, news media outlet needs to then see how can they leverage on these information, at the same time maintain its integrity. These informations are usually leveraged and manifested in the form of conferences. More on this later.
5) Asia is the new growth engine
Finally, we’ve heard this over and over again. Asia is the new growth engine.
This chart I included in my previous post says it all, where in the next few years, over 400+ M people from SEA are potentially coming online:
Things to note:
Though there are great potential in Asia’s online content industry, there are a couple of things that media outlets need to bear in mind, based on a few observations I made:
1) Breadth vs depth
Marc mentioned that you either go wide or go deep to win. I think there has to be a balance. Logically, depth is better than breadth: as there are more noise online, there’s a premium for quality content which are in depth. However, there’s a risk of reporting news for the sake of reporting it, without proper understanding of the ecosystem or the topic in mind. I think in Asia, there is a lack of in depth content or proper journalism. Which is fine, because everything takes time. Then the strategy should be to go breadth, cover as many topics as you can, with a particular theme connecting all the topics.
In content, quantity is also king, as much as quality is king. There’s a big debate on this, but I’m a firm believer that quantity is king. It’s simple really: every article has the potential to harness different traffic from the Internet. You will never know which reader you attract will end up being a loyal reader. And of course, pageviews correlate directly with ad revenue, the core business model for news site, although it sucks as one.
Still not convinced?
- News site A produces 10 articles a day generating an average of 1000 pageviews per article.
- News site B produces 5 articles a day generating an average of 1200 pageviews per article.
In the long run, who will win? 🙂
But if there are too much content being produced, then the media outlet will be seen as a content farm, which might be detrimental to the brand. Which brings back to my point: there has to be a balance. I think the 80 – 20 rule applies here too: 80% general content + 20% in depth content.
There are other companies focusing on content marketing, in which their content strategy is 100% quality in depth content. That’s another topics to discuss on: companies focusing on building thought leadership through content marketing (such as Buffer and First Round Capital)
2) “Buzzfeed”-ish and “Upworthy”-ish articles
I’m sure all of us came across the above-mentioned two websites which rose to fame thanks to heart touching headlines such as these:
“A Funny Video That Makes You Never Want To Fall For This Natural Lie Again”
“5 Reasons Why My Girlfriend Thinks She’s Not Beautiful Enough, No Matter What Anyone Tells Her”
“He Was About To Take His Own Life — Until A Man Stopped Him. Here He Meets Him Face To Face Again.”
I remembered a fellow journalist telling me that she doesnt subscribe to these kind of content, and that she despise it.
I’ve seen what this kind of content can do to news media outlet (to the extent that it broke our server), and as Jon Evans put it, this is the future, whether it lives or dies. We think it is necessary to be included as part of media company’s content strategy.
We subscribe to this too, and we understand that all online news follows a power law. The scaling exponents may vary, but the fundamental distribution remains the same. A small number of viral articles get most of the attention, a long tail gets little to none, and the decay from the former to the latter is described by a surprisingly smooth curve.
Like it or not, this is the trend now, and why fight the trend when you can ride on it? That is why over at Vulcan Post, ~5% of our content are “Buzzfeed”-ish and “Upworthy”-ish articles, which brings in fresh new traffic. Although majority of them never come back, even if 5% of them stayed on, that is a significant conversion for us.
A majority of the traffic also “sprinkle over” to other articles, through carefully placed “recommended articles” section. These other articles which, hopefully, are “in depth” and “quality” enough to convert the non valuable traffic from the “Upworthy”-ish articles into valuable traffic. More on this in another post.
3) Revenue Model
Another big debate for online media outlet is this: revenue model. There’s a huge debate on whether paywall works or not.
Marc said that he doesn’t think paywalls are going to work for many media companies, because they “penalize most loyal customers” and are therefore very tricky.
I think it might work; but it has to be manifested in other forms: online exclusives, or online magazine. This is something that The Information (online exclusives) and The Next Web (magazine) is doing. Would be super interesting if TNW can share their numbers and growth for the magazine.
The way I see it, tech media publication is a distribution channel for all the other money making verticals that you have to venture into, as a media company. For examples: Conferences, Magazines, E Commerce, Consulting etc. That’s why you see companies like Techcrunch going for events and The Next Web going for magazines, products etc.
4) Mobile growth
One last thing to note about the content industry is this: Mobile. An astounding 70% of Vulcan Post’s traffic comes from mobile. I think there’s a lot of opportunities there, but it is not fully understood yet.
News site are currently still designed and optimized for readers reading from desktop. This is a different context from optimizing your site for mobile and enabling a mobile view. I’m talking more about ad placement opportunities, recommended reading sections, or even text based optimization. I know for myself that a 4 paragraph article on desktop might be readable, but the similar content is too long to consume on my mobile.
Really really excited for this space and for all the innovations that will be coming!