About this Video

This video is from the The Economics of Social Media conference, which explores the business of social media. In an industry moving so fast, it’s useful, fun, and necessary to allow yourself a day away from the everyday to think, learn, and network alongside your fellow industry leaders.

ContentNext is an independent media and information company covering the business of digital media.

Social Media Meets News examines a form that may be under even more attack from social media than music. How are people reading the news now? What do they want from news in the age of social media? There are bloggers committing journalism, but that’s only part of the story. How is the mainstream news media responding to this challenge—and how is the definition of mainstream news changing?

We explore how the established networks, commercial and public, have progressed beyond the “Web Extra.” On the panel are Vivian Schiller, SVP and GM of NYTimes.com; Rich Skrenta, founder and CEO of Topix; Ken Stern, CEO of National Public Radio; Kara Swisher, of The Wall Street Journal and D. Moderating will be Tad Smith, CEO of Reed Business Information.

Kara Swisher from the WSJ said that “newspapers tend to veer away from creating stars. But creating mini brands within the brand is very important. Walt Mossberger has a brand that can be taken advantage of because he is a trusted voice that people go to. He’s high standards and he’s trusted and he’s well known. It’s an easy advertising situation.”

My question is what happens when you help build these stars and then they leave?

Commenting on aggregation and news aggregators such as Digg and NewsVine, Vivian Schiller from NYTimes.com said, “Does brand matter? Yes. For the NY Times, brand matters. And rather than be afraid and try to create a walled garden and keep ourselves away from the NewsVines and the Diggs, we want to embrace it, to open up and to nurture that relationship because to the extent that our NY Times content…the wider it is distributed, the more people are going to come back, the more people are going to find us. So bring it on. We embrace it. It’s all traffic back to our sites anyway.”

When the Gap first started, they sold Levis jeans. Eventually, once they had a large audience of shoppers, they started making their own jeans and no longer sold Levis. Levis helped build the Gap, and then the Gap realized they could make and sell their own jeans at a higher margin. They no longer sell Levis. And they probably outsell Levis jeans or, at a minimum, helped put a big dent in Levis sales.

Similarly, CVS, Duane Reade, Stop and Shop and other retailers are starting to make their own version of Scope, Q-Tips, Helmans Mayo, and Coca-Cola. My question is, what happens when Digg and Google News build enormous user bases on the backs of WSJ & NY Times content and then hire their own journalists? On the flip side, the best content model ever is to be a meta site that spends zero on content creation but still has an enormous advertiser friendly audience. So maybe google & digg will never get into the content creation business.

Kara Swisher, when asked about the fact that google grabs their content and monetizes it right away, with the potential (but not guarantee) that the publication can monetize it at some point downstream said “Google is a parasite on the system. But a helpful parasite to a lot of people. They do take other people’s content. Google and Yahoo do help people.”

Vivian Schiller (NYTimes.com) said, “We get half our traffic from search engines. It introduces us to an entirely new audience that might not have found us. We are very well SEO’d. In the whole “frienemy” camp, we fall down in the friend part.”

“Google is a source of traffic. They’re everyone’s start page.”

Kara Swisher on free versus pay: “We feel that free is better (at “All Things D”). I wouldn’t dream of not being free for our site. You have to be a part of the conversation.”

I agree with this in a strong ad market. But what happens when we revisit 2000 – 2003? Free / Ad supported content sites will get killed. You need to grow the four content business models:

  • Free and ad-supported
  • Subscription
  • Pay-Per-View
  • Syndication

“If somebody is going to eat your lunch it might as well be you.” I thought that was a great quote. I can’t tell you how many of our customers worry about cannibalizing their different business models by adding new media to the mix. For example, a conference organizer worried that if they put video from their conference online (whether free or pay-per-view), it will cannabilize in person attendance.

The truth is that 1. it actually helps increase in-person attendance (the assumption here is that the content is actually good) for future events because people can witness firsthand the quality of the content and more people learn about the conference. 2. someone else will make quality content (your speakers also speak at everyone else’s conference and pretty much say the same thing) available online.