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"Postmodernism is a change-or-be-changed world. The word is out: Reinvent
yourself for the 21st century or die! Some would rather die than change."
Leonard Sweet, cultural historian.

01/10/2006 Entry: "Murdoch's got the right idea"

The Guardian is reporting that Rupert Murdoch plans to turn his latest acquisition, MySpace.com, into a portal (for lack of a better term) to compete with the likes of Google, Yahoo! and MSN. This should shock no one, but it's evidence that Murdoch and his people understand what's happening in the Media 2.0 space, where his media competitors do not. He realizes that simply providing content for use on-demand isn't going to get his company very far in a world of fundamental changes in media use. It's short-sighted to offer your content for consumption elsewhere without having your own "elsewhere."

If you don't read Umair Haque, you need to, because the guy IS the voice crying in the wilderness leading the way with this kind of stuff. In his most recent post at BubbleGeneration, he writes that media companies jumping on the on-demand bandwagon by offering their content to others are actually contributing to the value of those "others" in the name of short-term profits.

What the "on-demand" -- AKA media 1.0-as-service -- strategy amounts to is a bet on investing in production: that by investing in (and creating) the "best" shows, traditional media will retain a higher market share -- a higher attention share, essentially...

...Content, in the near future, won't be a source of market power -- it will be commoditized. Value chain atomization means that the average return to content is already decaying fast across media markets. Focusing on content ultimately gives new models more and more leverage to realize attention economies of scale and scope.

By focusing on the short-term, as it’s done so many times in the past, the media industry is mortgaging the future. This time, though, the price of antistrategy will be steeper than ever before; like Ford and GM never recovered from their inability to understand and dominate the economics disruption of the 70s and 80s -- cheap information -- so it will be difficult for media incumbents to recover the market power incumbents are about to cede to Apple, Google, and a clutch of new startups.

This is why Murdoch's move with MySpace is so significant. He's investing in an "other" and, in so doing, helping to preserve his company's future.

Meanwhile, MediaDailyNews reports that the folks at Time, Inc. have ceased charging for three of their online business titles--Fortune, Fortune Small Business, and Business 2.0. They've brought them under the CNNMoney.com umbrella in an attempt to move into the aggregator space.

Vivek Shah, president of digital publishing, The Fortune/Money Group, attributed the move to several trends in online media: a growing desire from readers to get all the news they care about from one source like a news aggregator; a demand from advertisers and media buyers for scale in order to increase the effectiveness of their buys; and, of course, a strengthening ad market.

"All of the research we do tells us that readers are narrowing the number of sites they visit in a day," said Shah. "And from an advertiser perspective, it's very attractive because it allows them to build large campaigns that will have a bigger impact."

What I tell my clients is that all of these opportunities exist at the local level, but that they must be prepared to make investments here. If local media companies -- the natural folks to do this -- don't, they're opening the door for outside start-ups to take it away. Then, as Haque so brilliantly observes, they'll leave themselves open for domination by people who have the attention of people in the community.

You think your brand is enough to stop that? Think again.

Replies: 4 comments

yeah, but terry, murdoch is already pulling traditional "closed" move with myspace:

http://stevegilliard.blogspot.com/2006/01/there-still-nothing-there.html

if that's media 2.0, it's a direct contradiction with web 2.0. what are your feelings about this development?

Posted by sean coon @ 01/10/2006 12:07 PM CST

Well, my view is that this was a really dumb move and that there is a learning curve for everything. It doesn't change my belief that buying MySpace was a very smart move for Murdoch. It just proves that they're feeling their way around. If I was him, I'd fire the idiot who blocked the links.

You're absolutely right that if they try to turn this into a closed network, they'll bomb. Thanks for the note.

Posted by Terry @ 01/10/2006 01:31 PM CST

I see nothing wrong on having MySpace and if he really wants it we cant do anything about it.

Posted by Horseman @ 01/10/2006 08:14 PM CST

Thanks for the heads up on BubbleGeneration. A great site with some fascinating ideas.

Posted by Leonard @ 01/10/2006 11:34 PM CST


"The future is not something we enter. The future is something we create."
Leonard Sweet