Journalists and news media professionals may have been the canaries in the coal mine that is digital disruption, but their lot may be changing. Marc Andreesen believes the news business is ripe for success. First it has to let go of any remnants of the old ways of doing business.
The end of monopolistic control doesn’t mean that great news businesses can’t get built in highly competitive markets. They just get built differently than before.
Now, with everyone on Internet, three things are happening simultaneously:
1. Distribution is going from locked down to completely open, anyone can create and distribute. There is no monetary premium for control of distribution.
2. Formerly separate industries are colliding on the Internet. It’s newspaper vs. magazine vs. broadcast TV vs. cable TV vs. wire service. Now they all compete.
Both No. 1 and No. 2 drive prices down.
3. At the same time, the market size is dramatically expanding—many more people consume news now vs. 10 or 20 years ago. Many more still will consume news in the next 10 to 20 years. Volume is being driven up, and that is a big, big deal.
Right now everyone is obsessed with slumping prices, but ultimately, the most important dynamic is No. 3 – increasing volume. Here’s why: Market size equals destiny. The big opportunity for the news industry in the next five to 10 years is to increase its market size 100x AND drop prices 10X. Become larger and much more important in the process.
Some of the best news about the news business is the gigantic expansion of the addressable market, a function of the rise of the developing world plus the Internet. So how big is it? If you extrapolate from the number of smartphones globally, the total addressable market for news by 2020 is around 5 billion people worldwide. However, we all have to get more sophisticated about defining and segmenting markets. It is critical to really understand the who, where, when, and why to serve that massive market effectively.
For example, many evolving markets are seeing the “death of the middle.” The winners in these markets either offer the broadest breadth or the deepest depth. In evolving markets neither the broadest nor deepest is in trouble, but the middle market is withering. So it is logical to expect the big winners in the news business to either be the broadest or the deepest: To go maximum mass, or maximum specific.
Andreesen goes on to list eight ways content businesses can make money in the digital age. While some of them seem quite specific to media businesses, there are lessons that extend into other sectors as well.
Read The Future of the News Business: A Monumental Twitter Stream All in One Place here.