The end of artificial scarcity - The New York Times? The new business model is here!

King Canute was told by his court that he was all powerful. Being a well balanced man, he showed them that he was not. He had them take his throne out to the sea shore and commanded the tide to remain out. Everyone got their feet wet.

Some things cannot be stopped even by Kings or Media barons.

There is a strong rumour that the New York Times will drop its Paid Select Deal where the stars of the system are kept behind the paywall. Jeff Jarvis and others make the case that that Murdoch should make the WSJ free online. The web revolution is almost done - charging for your content is nearly finished as a business model.

Here is how I see it. Friends of mine say I am too aggressive on my timeline - I would be very interested to hear your views. Is this realistic? If not when do you think it will happen?

• Broadband use in North America has tipped into mass usage: - I think that the web will become, by 2009 , the primary distribution channel for all media. Music is already there. Good radio content is moving there (This American Life) The use of online video has now tipped in North America. Consequently, I think that by 2009 the web likely will become the primary channel for TV and Radio - So this implies that if you are to expand your audience beyond the current one is to go where they are - online. What you broadcast now has to be available easily on the web.
  

• Why? It is clear, at least to me, that the web destroys any business model based on artificial scarcity. Content will be all but infinite. What will be scarce in a world of limitless content will be people's ability to find what they value and to help them find more meaning when they find it. This is where we will find the new business model. This is what I mean by making the attraction and the sustaining of community the main pillar of the new business model. The new scarcity is the new value - the new value is making meaning for your members. They have to have a voice - you have to help them tell their stories. To have a voice, they have to be heard - you have to help them find a community.

Follow the money. Imagine you are a big advertiser. Where will you be in 2009? I think that by 2009, advertising will have shifted decisively away from Print, TV and Radio to the web. Those who gain the most will be those that are able to offer the best match between the advertiser, underwriter and the members of the best communities. So those who can attract and sustain the most attractive and sizable communities will be the winners. They will attract the support of the community members themselves and they will attract the support of those advertisers and underwriters that seek to connect directly with the members. Ebay makes its money based on the size and the health of its trading communities. You have to have large, healthy (Trusting) and vibrant communities that do important things inside your Trusted Space. This is where you will make your money and defend your position.

So am I smoking dope? If you think I am off - please give me a better idea and a better timeline.

 

Online ads to overtake US newspapers (FT)

By Aline van Duyn in New York

Published: August 7 2007 05:03 | Last updated: August 7 2007 05:03

The rapid growth of online advertising is expected to see the sector overtake US newspaper advertising in terms of size by 2011.

The forecast comes against a backdrop of declining advertising sales reported by newspaper groups this year in spite of continued strength in the US economy.

The findings are from a widely-watched annual research report on the media sector by Veronis Suhler Stevenson (VSS).

In the 2007 study, published on Tuesday, VSS forecasts that online advertising will grow by more than 21 per cent per year to reach $62bn in 2011, making it bigger than newspaper advertising, which is expected to total $60bn in 2011.

Broadcast television and cable and satellite television combined will continue to take the biggest share of advertising dollars, and are forecast to reach $86bn in 2011. “The path of online advertising and newspaper advertising is a continuation of what we’ve been observing for many years, but it is finally getting to the point where the lines will cross,” said James Rutherfurd, managing director at VSS.

The shift in advertising spending from traditional media to online and digital alternatives is taking place across the globe. Already, some forecasters expect newspaper advertising to be overtaken by online spending in the UK and Sweden this year.

The VSS forecasts also illustrate the lag between changes in consumers’ behaviour and advertising spending.

The survey also measured the time spent on different media, and in 2007 the amount of time spent reading newspapers is expected for the first time to be overtaken by time spent online.

Indeed, the shift to digital media has led to a slight decline in the overall amount of time spent consuming media.

In 2006, media usage per person per year declined half a percentage point to 3,530 hours. The study found that while people typically watched television for at least 30 minutes per session, they tended to watch user-generated video clips on the web for five to seven minutes.

The use of media in the workplace increased, however, up 3.2 per cent to 260 hours per employee per year, VSS found.

Spending by companies on information and media, including business-to-business magazine and trade shows, is also increasing, up 8.1 per cent in 2006 to $227bn.

“Knowledge and information industries drive the US economy, meaning that information is a critical tool,” said Mr Rutherfurd.

“Companies are prepared to pay a lot of money to get that information.”

Copyright The Financial Times Limited 2007