4 key elements of a digital media business
What can traditional publishers learn from pure play digital and social media companies? Plenty. Brands such as Vox Media, Reddit and LinkedIn are building digital business models that combine content, community and technology in new ways. As these models take hold, they should open up new doors for traditional publishers that are willing to shed old ways of doing business.
“Disruption creates carnage, but it also creates opportunity,” paidContent’s Mathew Ingram said at the opening of the paidContent Live conference in New York.
Here are four key elements of the modern digital publisher’s tool kit, culled from Wednesday’s paidContent conference sessions.
Keneth Leher, managing director of Lerer Ventures, said the pendulum is swinging back to content as a key differentiator for media companies. “The pendulum always swings from distribution to content at some point,” he said. “It happened in radio, cable and broadcast, and it’s now happening on the web. Web and mobile infrastructures are built out. What better time to fill those infrastructures with content?”
As an investor, Lerer knows timing is critical when building (and investing in) a digital media business. Invest too early and you can lose all your money. Invest too late and you don’t make any money. “It’s the best time in the last eight years to invest in digital content companies,” he said.
And it’s a good time for media brands – or those that aspire to become a media brand – to invest in digital content. At LinkedIn, for example, original content has been a natural evolution for the professional networking site. Last October, the company launched a blog network of “influencers,” ranging from Richard Branson to Barack Obama. LinkedIn’s editorial team supports the contributors – who write for free – with promotional and editing services, with an emphasis on quality content that resonates with a professional audience.
“We work on the idea of how to create and package content a lot,” LinkedIn Executive Editor Daniel Roth said. “One of the great things that came out of traditional media is that readers really respond to quality. If someone posts what amounts to a press release, readers will react in a negative way to show that’s not what they want.”
Consumers – especially younger audiences – are far less concerned with traditional rules about designing, packaging and distributing content, said Lerer, citing BuzzFeed’s success in adopting a social reader design that offers no real packaging of stories. “People online are more and more comfortable consuming content that way,” he said. “When young web users see BuzzFeed, to them the presentation is normal because they have never had any other experience. When they go to Thrillist and see content and commerce side by side, that’s OK. The new consumer will accept anything as long as it shows common sense and is good content.”
It’s a lesson that Tumblr learned in its first attempt at original content. A year ago, the microblog platform launched Storyboard, which featured original content designed largely to promote Tumblr itself. Tumblr announced last week it was shutting down Storyboard and laying off the three-person editorial staff.
Tumblr founder and CEO David Carp described Storyboard as “an experiment in marketing and telling stories about what was going on inside Tumblr.”
It’s easy to see why the experiment failed: Tumblr was promoting itself instead of creating content that was actually useful to its audience in some way, by being informative or entertaining.
Beyond simply engaging an audience, digital innovators are finding new ways to empower them through commenting systems and self-publishing tools. Social-driven businesses have embraced comments as a way to bring their original content to life.
“Our comments have helped the influencer program tremendously,” said LinkedIn’s Roth, adding that an average post has more than 100 member comments. “People will riff off of a post and engage with their own network about it,” he said. “The commenting has actually lifted the content.”
LinkedIn members can’t comment anonymously, which Roth said raises the quality of the discussion. “Every comment is tied to their professional identity, so people are incredibly respectful,” he said.
That’s the opposite of Reddit’s model, in which anonymous users fuel the social news site through posts, links and comments. “Our comments are anonymous so people can be candid and open, which is good for us,” Reddit GM Erik Martin said. “The most important things about comments is that you care.
“Too many sites don’t care about the comments. It’s about caring and showing that you’re reacting to the feedback. If you don’t care enough to do something about what people are saying, then why have comments at all?”
At Vox Media, “comments are part of the product,” said CEO Jim Bankoff. “People who create the product have to be engaged with that part of it. And both the audience and editors take pride in the conversation to make sure it stays on track.”
Digital media companies are looking for a new brand of journalist, one that combines a variety of skills and is comfortable creating a variety of content types in a digital environment. Bankoff calls them “media hackers.”
At Reddit, about half of the 25 employees are programmers, who also serve as community managers and write their own blog posts. “They manage the community of developers creating the tools that are leading to the next round of innovation for the platform,” said Martin.
Markoff said the beauty of social media is that it allows aspiring content creators to show off their talents for a wide audience. “Before, you had to start as a production assistant to get into media,” he said. “Now, if you want to make a movie, you post it on YouTube. If you want to do investigative journalism, you just post it. The cream is rising, and our job is to identify the best people and create an environment that allows them to be successful – and a business model that allows them to make money off of it.”
Tumblr has emerged as a site for content creators to show off their talents. Carp said Tumblr bloggers have recently signed 70 book deals and three TV development deals. “We don’t have any hand in this,” he said. “Tumblr allows you to build a big audience and commercialize it in any number of ways. Think about the opportunities you have as a creator to do your best work, build an audience, and be seen.”
As an investor, Lerer said he won’t even think about hearing a pitch for a new content company unless there’s a technology partner in tow. “You can’t have a successful content company without corresponding great technology,” he said.
Technology partners can provide low-cost tools or innovative approaches to developing, publishing, distributing and measuring content across web, mobile and social platforms. Technology also underpins business models built around audience data.
While many content startups rely on third-party tools and services to scale quickly, Vox Media has taken a different approach, deciding to develop its own content management system. A home-grown CMS “is not a prescription for everyone, but we have serious intentions of scaling,” said Bankoff, noting that Vox now has 330 digital properties attracting about 50 million unique visitors a month. “Things like deep community integration, ad integration and advanced analytics are all hard to do with an off-the-shelf or open source CMS.”
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