In the early days of my internet experience I worked for Howard Tullman at Tunes.com/Rollingstone.com and Stuart Carlin at Machinetools.com. Though the firms were very different (industries, customers, revenue models, products, etc.), the ‘3 Cs of the Internet’ were present in each firm’s strategy — commerce, community, and content.
These last two elements have formed an especially tight relationship of their own in recent years and this new partnership has forever changed the publishing and media industries. From music and movies to newspapers and magazines, the combination of community and content have introduced a new production model — user created content — that is taking greater and greater market share.
I was reminded of the power of this new model when I saw a piece in Advertising Age highlighting that the Huffington Post is more valuable than many old line newspaper publishers in the US. From the article by Michael Learmouth:
As long-rumored, The Huffington Post took $25 million in new funding at a $100 million valuation. It’s a healthy sum given the company has aggregated a huge audience — 8.8 million people a month, accordng to Quantcast — primarily on links to content it does not produce (newspaper stories) or pay for (columns).
The funding means Arianna Huffington’s news blog is now considered more valuable by its backers than quite a few publicly traded newspaper companies, such as Lee Enterprises, owner of the St. Louis Post-Dispatch and 52 other papers (market cap: $36 million), A.H. Belo, owner of the Dallas Morning News and the Providence Journal (market cap: $35 million), and Media General, owner of the Tampa Tribune and Richmond Times-Dispatch (market cap: $34.6 million).
It puts Huffington Post in the same league as McClatchy Corp., owner of the Sacramento Bee, Miami Herald and 28 other dailies (market cap: $150 million).
Of course, there are also huge publishing/media firms who are struggling horribly — including The Washington Post and the Chicago Tribune Company — and appear to be shrinking by the day. They too have no idea how to combine community and content and they are incapable the cannot just jettison their industrial era infrastructures and mindsets.
The article briefly mentions this new production model when it mentions links and unpaid columns. This of course is simple blogging and is just the tip of the iceberg in terms of new content models based on communities.
While Huffington started with Arianna’s huge rolodex and brand, there are big advantages and opportunities for campus entrepreneurs in the media space. The most obvious and famous campus entrepreneur in this space is Mark Zuckerberg and Facebook.
The campus offers a great place to target specific ‘communities’ and provide ways for them to spend time together and share content. From photos and videos to status updates and group membership, Facebook has allowed its community to share content in endless ways. It has also allowed advertisers and application providers to join in. Of course, Facebook, like many products, services, and activities, has moved well beyond the campus.
Entrepreneurs looking for opportunities in an economy full of bleak news and shrinking spending take note, the combination of community and content continues to present low barriers to entry, low capital requirements, and growing markets demanding innovative products and services.