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November 14, 2005

Profitable Channels and Blog Networks

Another day passes, and Knight Ridder, a major newspaper company explores being sold.

I think there are five large problems newspapers are facing:

  • inefficient ad sales (and online is only getting more efficient, with eBay offering up past transaction information and Google’s free web analytics product)
  • increasing number of channels (TV, magazines, web, blogs, etc) and shifting of attention online, and new ways to consume information (TiVo, deals to rent shows on demand, and Google may even go into renting books). Online you can even get a rough estimate of channel demand before you create a channel.
  • having to cover boring channels – online one can chose to only cover channels that are highly profitable directly via ad sales or indirectly via linkage data and attention
  • lower publishing costs, easier profitability, and larger distribution for individuals – now anyone can compete with you, without there being a significant barrier to entry (other than possibly the time needed to grab the market’s attention and have leading information systems trust it). With online ad sales getting more efficient quality micro niche sites become more profitable. The lack of borders makes some poor niche topics profitable when combined with the ease of search. It is also easy to publish a number of channels in parallel.
  • lack of topical interest or bias – sure media formats and publishing methods have some biases built in, but by being an individual you can get away with putting a lot more bias into what you do and focus your efforts on only what interests you. People are attracted to a bias they can trust.

I am not sure that I am smart enough to know the answer to the problems the newspapers are facing, other than strong online integration and reader becomes the editor or writer, but there can only be a few major players in any marketplace.

What other values can papers add that make them worth paying more for (either as a consumer or advertiser)?

The biggest reason I ask these questions is that a friend of mine has been giving me shit about not creating a network of sorts. My four fundamental problems with creating a network of sorts are:

  • The value I can add to the topic.
  • What I am doing now works well enough to get me by, and there is at least a small fear of change.
  • I have some issues with authority, and it might be weird for me to be a boss.
  • Ultimately demand and popularity follows attention.
  • Long term profitability and permanence.

Breaking them down one by one…
Value I can add to a topic:

  • I can get a channel decent exposure rather quickly and how to help stories spread.
  • I have a good idea on how to chose channels that will be profitable.
  • I know people in many markets. For example, so far I have partnered on one content site, and had a friend who buys ads on the site.
  • I can provide a good bit of capital off the start, and could pay people above average rates to write.
  • Although I have not done much in the lines of ad optimization, from chatting with friends and viewing sites I know a great deal about the topic.

One of my biggest problems with this concept is that I typically view the work of others as a big amazing combination of things, while minimizing my own work into the bits and pieces that it is.

Fear of Change:
To be honest I think I sorta was hella lucky with my market timing, and still have only created one hyper successful website. I also like that I am not stuck worrying about margins and money and business this or that everyday.

In spite of my work being profitable and decently linked, I still do not get much feedback on most of my posts. I am uncertain if that is due to my writing style, site format, or just me being me.

Authority Issues:
Not sure how to deal with that… 😉

Ultimately demand and popularity follows attention:
As information systems evolve this will only become more and more true. I struggle daily with debating what is useful information to put in my ebook and when teaching more is giving too much and overwhelming people.

The point being with that last statement is that as information systems evolve that ranking number 1 may end up meaning you need to be number 1 from end to end.

Sure there is room for a variety of voices on any topic, but as topics get more competitive will hired writers who are writing about a topic because they are getting paid to write be able to outperform those who love their topics. If not, will I be able to add enough value to the equation to where my network is still profitable. If you knowingly put inferior content at the top of the search results is it wrong? I have done it in the past when I needed to to get by, but I find it a bit harder now. And then at that point where does one draw the line with what they are willing to do for a dollar.

And even with that there are some issues because some less than honest business models are far more profitable than their honest counterparts. Just look at the AdSense ads for SEO. Most of the site submission ones are open fraud. Although Google knows they support all sorts of fraud they don’t want to be forced to define where the limits are.

I have yet to get much feedback on this site, but if you run a network of sites what made you decide to start it, how did you know it was the right time, is this post out to lunch, etc etc etc.

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