The New Media Economy and

thestar.com
J.Sims
June 2009

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Media 1.0 Media 2.0

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Scarcity Abundance

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 Online Newspaper
Visit: 10 Mins Avg Youtube video: 3.5 Mins

Twitter
Post : 140
characters

TV Show: 30 – 60 Mins

Print Newspaper: 40 Mins

Blog Post:
3-10 Paragraphs

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Scarce Abundant
Media Attention

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Abundant Scarce
Media Attention

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Basic Supply and Demand
Supply

Price
Demand

Quantity

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Media 1.0 Supply and Demand

Supply

Price 2
Price

Demand 2
Demand

Quantity

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Umair Haque

Media 1.0 =
The Age of the
Blockbuster

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 Media 2.0 Supply and Demand

Supply
Media 2.0
Supply

HYPERDEFLATION
Price

Media 2.0 Price Media 2.0 Demand

Demand

Quantity

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Media 2.0 =
the End of the
Blockbuster
Age.

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And the
beginning of
the Age of
Snowballs.

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Snowballs = Micro Content

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Aggregators

Micro-platforms

Re-constructors
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 Blog Post
YouTube Video Influential
Star Article Blogger Aggregator High Traffic Site

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 Blockbuster Growth
Value

Consumer
Goods

TV

DVD

Cinema

Output

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 Blockbuster Growth
Value

Email marketing, etc.

Thestar.com

Metro

The Star

Output

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 Snowball Growth
Value

High Traffic
Site

Aggregator

Micro Blogger
Content
Output

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 Nytimes
.com
Nypost.
com

coolhunting
Micro Bloggers
Content

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 Today
Show

Amazon

Influential
Digg Blogger
Micro
Content

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 The growth of
snowballs requires
user engagement and
community.

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Clay Shirky
Digital Natives Expect to:

• Interact with
• Contribute to
• Organize
• and Share

the media they interact

with .

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 The Snowball Economy
Lower Demand for
Blockbusters
Media 2.0
Supply

A growing number of
snowballs pushes the
demand curve up
Snowball Price
Media 2.0 Price Media 2.0Demand

Quantity

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This seems like chaos.

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Steven Johnson: News Ecosystem

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 Microplatform

Blog Blog Blog Blog

Entry Entry Entry Entry

Comment Comment

Reconstructor

Personal Cast Personal Cast Personal Cast

Entry Entry Entry

Entry Entry Entry

Smart Aggregator

Selected Micromedia Selected Micromedia Selected Microme

Blog Personal Cast Blog

Entry Entry Entry

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Media 1.0 Media 2.0
• Closed Economies:
• Dominant • Open • distribution
• Portal • coordination
• production

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Sources of Competitive Advantages in Media
2.0

Quantity:
Aggregate more than
competitors.

Quality:
Micro-differentiate more
narrowly than competitors.

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 Curate the News
2 Roles for News Ecosystem
Organizations in
the Media 2.0 Create vertical
Economy content sites

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Revelation – what’s good?

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Aggregation – elegant organization

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Plasticity – let me make it my own
RSS Feeds

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For the Star to thrive in the Media
2.0 world, we will need to make
some key strategic changes.

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Inside Out Outside In
• Star staff are the • The site as a
only voices on the community
site
• Listen well to our
• One-way users
conversations
• Users and editors
• “Authority” collaborate to create
the site experience

• Commenting,
discussion, polling,
user suggestions on
story ideas, questions
for interviewees, etc.

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Ownership Curation
• All content on the • Bring elegant organization to
site is produced by info on the web
Star editors and
freelancers • Finding what’s good requires
excellent knowledge of our
users, what they want and what
works online

• Stop paying for content that

the web is already generating for
us

• Do what we do best and link to

the rest

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Closed Ecosystem
• Us against them • Linking to competitors,
mentality with other community bloggers,
sites government sites, data and
map sites

• Working with smaller local

sites and blogs to form
advertising networks

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Product Service
• Stories and articles • Data, tools, links
professionally and content serve as
produced and a platform for
packaged for delivery discussion and
to an audience interaction

• Applications are
created to allow for
the syndication and
distribution of the
content across the
web

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Mass Niche/
Vertical

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 Why Verticals?

Smart aggregators will consolidate

horizontally and fragment vertically.
- Umair Haque

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 Separate brands enable us to
attract new audiences and to
expand the verticals nationally.

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 The verticals are designed to be the
ultimate resources for homes, health
and parenting information in the GTA.
• News and information
• Blogs
• Data
• Listings
• Local, national and classified
advertising

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 Advertisers prefer contextual
environments because they provide a
higher return on investment.

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Featured
Advertiser Text
Link

Home Page of the

Star: 0.02% CTR

Parentcentral: 0.17%
CTR

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Display Ad

thestar: 0.08% CTR

Parentcentral: 0.16%
CTR

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Catfish Ad

Toronto.com: 0.5% CTR

Yourhome: 4.3% CTR

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 Nov Dec Jan Feb Mar Apr
Nov Dec Jan Feb Mar Apr
Living Verticals revenue
Entertainment TDC revenue

On average, revenue from the verticals is On average, TDC national revenue is 367%
115% higher than revenue attributed to the higher than revenue attributed to the
living section of thestar.com entertainment section of thestar.com

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In short:

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The economics of media have shifted.

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Scarcity and abundance have flipped.

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Where mass was once king, now we see a
mass of niches on the web.

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This has caused hyperdeflation in media value
and the end of the blockbuster age.

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Hyperdeflation is countered by the snowball
effect.

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Snowballs are pieces of micro-content.

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The old media blockbuster economy was
built on exclusion.

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The new snowball economy is built on being open to
aggregators, micro-platforms and re-constructors.

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 And by capitalizing on economies of
distribution, coordination and production.

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As curators of the news ecosystem, we can
provide three kinds of value.

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 Revelation – What’s good?

Aggregation – Elegant organization

Plasticity – Let me customize your content

to meet my needs

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This new economy requires radically different
product strategies.

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 Letting the outside in.

Curation rather than ownership.

Becoming part of the ecosystem.

Viewing the site as a service rather than

a product.

Moving from mass to vertical.

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www.simsblog.typepad.com

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 Want More?
Here Comes Everybody – Clay Shirky

What Would Google Do – Jeff Jarvis

Grown Up Digital – Don Tapscott

Crowdsourcing – Jeff Howe

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