Searching for profit
: Media Savvy rings the warning bell for Overture:
Despite the fact that Overture’s net profit margin has dropped from 20% to 5% and their quarterly net income has dropped from $30 million to $5 million, they’re on a buying spree. Overture spent $400 million to buy a couple of search companies, one failed and and one for people too cool to google.
Hmmm. It’s an Idealab company, does that give you any hints about its spending DNA? The result of this shakeout could be that Overture buys everybody but Google and Google is the one left standing.
: The AP reports that the Liebeskind design for the World Trade Center has been chosen. A mistake we will regret for generations to come.
The new flag of old Europe
: White with a left-of-center yellow streak. [via Olde Country]
Handy duct tape
: My colleague, Peter Hauck, points to another handy use for duct tape.
: Glenn Reynolds’ Tech Central Station column today announces the arrival of guerilla media — multimedia, actually: the addition of photos and video (not to mention sound) to this medium of the people, by the people, and for the people, our web. This includes not just the “vlog” opinion pieces so dear to my heart but photos from the scene of news now coming onto web sites and also video reports like Evan Coyne Maloney’s inspired interviews with anti-war protesters (by the way, shouldn’t they be called “war protesters,” since it’s war they’re protesting rather than antiwar… oh, nevermind, I’m getting tangled up in an aside of double negatives). All this is made possible, Glenn points out, by not only easy publishing tools (read: weblogs) but also by cheap media tools (read: great and inexpensive new cameras and software).
Now tie this to Michael Wolff’s latest New York magazine column arguing that there is a severe deflation in the value of content — to the point that consumers are expecting it to be free — and you have a Richter-scale shift coming in media:
The cost of media production is falling to near-zero at the same time that the retail value of content is falling rapidly.
I’m not sure exactly where this leads us (and I eagerly await my lunchtime or emailtime discussion about it with Clay Shirky.) But I think it leads to the nuclear nichefication of media: Because the barrier to entry into media (the cost of the printing press, as we used to say) is collapsing, then anyone can produce media about anything and there can be as many publishers and producers as there are interests.
The problem with this is that no one will make money: Consumers (who already supposedly don’t value content enough to pay for it) will now have even more choice and will pay even less. Advertisers, who subsidize content, will find it more and more difficult to reach audiences of scale. And without money to support quality content, quality will fall.
Of course, this won’t go to the extreme; there will always be distribution networks (via cable and newsstands) that put together larger audiences and make money. But in a world where a great deal of content can be delivered around those networks, the economics of content do change radically.
Watch this space…