Monday, October 5, 2009

Media Monday: Making money on content

The Internet has rapidly become a "game-changer" for many businesses. From travel agents to book publishing companies to real estate and auto sales, it's provided a new set of challenges and opportunities.

The same can be said for the information business, of which newspapers have been and are still a vital part.

Making money off information on the Internet is a challenge. Many of the successful online businesses are not selling information, but actual products. Ebay, Amazon, I Tunes and other companies are selling products to generate revenue.

Only one company selling information, Google, has really seen that much success., and mainly in the search category. They became the largest search engine and capitalized on their audience.

But most information providers aren't finding the Internet to be the panacea they expected.

Facebook, MySpace, Twitter and other similar sites have found a true Internet principle: It's easy to generate a sizable online audience. It's not so easy to monetize that audience. Especially when you're dealing with information as your main product.

No one really wants to pay for information - unless its pornography.

And much of the information - at least, much of the credible information - on the Internet comes from media outlets, especially newspapers.

This poses challenges for newspapers, but despite the conventional wisdom, we are not going out of business.

The current newspaper issues don't arise from a necessarily flawed business model. In most markets, including Amarillo, newspapers are still the top single advertising revenue business.

The problem is that too many newspaper companies have too much debt. And like nearly all businesses, we've been impacted by the economy - which is really our main problem.

A recent interview with Eric Schmidt, CEO of Google, addresses some of the issues that are faced by information providers. His take on the demise of newspapers is a bit over dramatic, but it is an interesting interview on how we all - including newspapers - will have to face the challenges of monetizing information.

For if we don't figure it out, there may not be as much credible information on the Internet for you to enjoy for free.

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