A friend writes:

I’m puzzling through an idea–of extreme poles in new editorial models…and curious how you foresee a media landscape that allows for Demand Media (this) and and Mediastorm (this). There are some really interesting commonalities under the hood of how these products are assembled and how execs at various companies see licensing and syndication and the future of content. What’s your take?

Great questions.

As I understand it, the Demand model is predicated on extreme micromedia production. Early on, Demand bought top level domains of users’ spelling errors: you typed deman.com instead of demand.com, Demand bought deman.com and filled the page with content that would sell related Google ads. Eventually, Demand began to generate new authored content to fill those pages. And now it has a micromedia “own & operate” model that makes it more lethal than, say About.com—which relies upon expensive journalistically legitimized authoring.

What’s interesting about the Demand model is that it seems to prove out Umair Haque’s Media Economics theory that new technologies have vaporized production costs and created new economies of scale and scope in search, production, and distribution, making production far less expensive relative to buying attention. Smart aggregators in the micromedia world such as Demand are now becoming major media players, using behavioral matches to SERP to place their bets on which subject areas to invest: an efficient relationship of content production to customer need. In the long run this has a chance of becoming an irresistable black box portfolio investment model of content production. Demand isn’t a “nichepaper” as Haque recently called for in his “Nichepaper manfesto”: it’s the extreme of micromedia, but imo it’s the extreme that will ultimately push nichepapers to real innovation at the margin. (I’ll write about Haque’s Nichepaper manifesto at a later date, but this piece actually contains some of my qualms about it.)

The X Games: Xtreme Micro meets Xtreme Macro

So what about the other side of my friend’s question How can you have a big enough tent to support experiementation at the level of narrative. Mediastorm, like the work Jonathan Harris does with Sputnik Observatory, is an artisanal multimedia company creating new journalistic narratives; both it and Harris’s Sptnk are also non-profits. They seem to fly  in the face of the smart aggregation theme. How can they survive in the same ecosystem when economies of scale seem to congregate around low margin data plays?

My answer: I don’t think they can, at least not outside the non-profit realm. Artisanal production doesn’t scale. Not that what they are doing isn’t valuable: this is exactly the right kind of innovation at the front-end of narrative remix that magazines  need to cozy up with if they intend to survive in an e-book world where there are higher margins and costs. And there’s good economics here too: as Haque says, companies that invest in “altering, remixing, and filtering microchunks” are the aggregator 3.0: he calls ‘em Reconstructors. They consolidate vertically and then fragment vertically. They are in essence  “broadcatchers” who believe that “people will consume the media they like best.”

But wait a minute: That sounds just like the Demand model.

A more likely model for the production side is what Demand is doing in terms of cheap production, what Visible World is doing in terms of cheap, modularized TV ad production—in case you missed it, Google did a deal with Visible World last week to abet its tv advertising—and to get increasingly focused using metadata production and semantic technologies such as DITA to mesh taxonomical CMS categories along with SERP and user-based tags and create dynamically generated aggregated results pages. (Let’s also mention Mahalo while we’re at it: Jason Calcanis’s company is combining high- and low-touch elements together to make search more authentic and matched to customer need.)

Touch me, baby

Don’t get me wrong: I don’t think high level editorial touch is going anywhere. You can’t use machines to generate moral purpose and one thing that’s perpetually left out of this debate about the future of newspapers and the scale economies that Reconstructors and Broadcatchers can achieve—the essential impact editors can bring to aggregation. That’s one reason I think the AOL model will be a winner: someone (editors) needs to bring the moral outrage, aesthetic value, and connective heart to content, and machines can’t do that.

So we’re stuck somewhere in the middle between the extreme micromedia and extreme artisanal remix production. Just where we should be, because the truth is that what’s needed is different strokes for different folks: different kinds of companies and even different units within companies have different needs.

If you have a big vertical database of SERP in something like real estate, autos, or dating. you’re going to need much more data efficiency at levels of geography and cost than you would if you were publishing politics or gossip or movies. The data needs are very different. Gossip and politics and personal finance can also benefit from the principles of Reconstruction—on both the front-and-back-end.

Conversely, microniches and vertical segments with strong SERP need real human touch to come alive: Consumers want more than data. They want passionate engagement and love for real estate porn or for more consumer transparency with auto dealers or more focus on sustainable transportationwhen in addition to—maybe even as an engine of—search. But as I said, your mileage may vary depending on how close you are to SERPs.

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If you do yoga, you probably already know the word means union. Breath and body. Twist and turn. Stretch and release. All at the same time. Sounds impossible but that’s the whole idea: moving, stretching the whole body together to reach beyond.

How about yoga with media? To stretch beyond—for real innovation to take place—you need new business models. But not just. You also need an innovation culture that creates living, breathing media experiments across business and editorial and technology. All of them together. All-One, as Dr. Bronner likes to say. In an agile, networked world where attention is scarce and most news is just randomly filtered data, change in any one of these three chakras by itself won’t cut it. Good content disconnected from context—people or data—is just data. If you want to be seen, you need to do the yoga that twists business requirements together with editorial and technology. And you better get down with the data baby because if you don’t know your XML from your HTML, your metatags from your master narratives, you ain’t going nowhere.

Unfortunately most media companies today are stuck when it comes to innovation. Newspapers still assign writers a single story a day instead of putting themon a beat over the course of a day with constant mini-updates. Business folks are still struggling to balance selling brands and search; seo still seems like a naughty word. Selective inkjet printing and supposed mass-customization are stand-ins for developing products that really embrace context. Designers are still more interested in pretty designs than persona-based user architectures. And although it’s changing,  lots of companies (media or otherwise) are still stuck with five year old content management systems that don’t give them the power of end- to-end XML, seo, metatagging, and multiple outputs to web, mobile, whatever.

So yoga: union. If you want to swim the blue oceans, innovate beyond your competition, the only way forward is to twist together. At the end of the day, editorial unsupported by business strategy and tech is just random data. You’ll be lucky to be spidered.

As I’ve written before, part of what holds back innovation is the rudimentary silos of static church/state (business/edit) relationshp of most media companies. But it’s not just at the operational level. Even the pundits don’t do yoga. Even now, even when there is more momentum to innovate across the wall than ever before, few if any, of our friends are connecting business model to content model: yoga.

Jeff Jarvis has been putting the pedal to the medal with his New Business Models for News project at CUNY. It’s a brillaint study, interrogating the financial dynamics of news companies, asking the fundamental questions of customer acquisition costs, pricing, bundling, net ROI of Googlejuice vs other measurable audience and advertiser metrics (churn, linking, etc.) Jarvis wants to collect the data, model it, and see what implications it has for news companies. Bravo. But it’s still business modeling. Jarvis isn’t reintenting the wheel—nor should he; his objective is to bust out the numbers in order to figure out how news organizations make money.

“The question is not whether content should be free or whether readers should pay; “should” is an irrelevant verb. The question, very simply, is how more money can be made. What will the market support?

The other question, then, is how much journalism the market will pay for? What kind of journalism will it support? This doesn’t necessarily start with the current spending on current newsrooms. Part of the equation, especially in the other models, will be new efficiencies (e.g., do what you do best, link to the rest) and new opportunities to work in collaboration and in networks.

The question Jarvis is raising is what those new efficiencies will consist in: what’s the value of user participation and increased collaboration, inside and outside the newsroom. What’s the value of innovation? His book, What Would Google Do?, provides many examples of media innovation but without the economics; his study will presumably provide financial ballast for new business models. But Jeff’s post begs the question of how you’re supposed to model stuff you haven’t built before. Again, what’s the value of innovation? If you’ve been reading this blog or Jarvis’s post on what he calls The Great Restructuring—or Umair Haque, the guy that inspired both of those posts—you’ll know another answer here is to put monetization (or at least overt monetization) beneath innovation, beneath community. But that’s not yoga either.

So what is media yoga? Wednesday’s FT had a piece about Freakonomics economist Steven Levitt’s new teaching gig at the Univ. of Chicago’s Booth called “Using Experiments in Firms.” I’m a little afraid that Levitt and  his co-teacher John List, both economists, will scientize this, but I suppose it’s a start, and it’s interesting that it’s taking place in a B-School. (Where’s similar focus on innovation in J-School?) There’s a giant world of innovation methods—from the Bass Diffusion curve to Christensen’s Disruptive innovation theory to Kaizen and TRIZ and beyond (way beyond)—some of which emphasize incremental increases in value and others (Christensen and Blue Oceans) that go for more profound leaps in value and technological transformation. We’ll see what comes out of Levitt’s new class, but I’m a little skeptical—economists and business modelers tend to get caught up in scenario setting, and what we need now more than ever is yoga. Left brain, right brain. Business and editorial and tech together. (Which is why, I think, supple management practices such as Agile and Scrum—and disciplines that look across the entire breadth of the media value chain such as IA/UX and content strategy—are beginning to get a bigger toehold today.)

So do media yoga. Fail often. Fall occasionally. And make sure you warm up all your muscles before you get on the mat. Otherwise, it’s savasana for you, bud.

Om.

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