Sunday, January 2, 2011

House of M: Old Vs New

I have had trouble expressing this in previous years, but Ralph Simon - Lady Gaga's mobile and Internet consultant put it in very clear and succinct words.

The major difference between old media and new media is their business model.

Ask an old media company, what is your product? And the answer would be - content. Articles, TV shows, movies, etc.

Ask a new media company, what is your product, and Facebook or Google would say, "Users."

Ask Facebook, what is your product, and Zuckerberg is NOT going to say, "Farmville" or status updates or photo tagging. He's gonna say, "Facebook has over 600 million users."

Very easy, right? Content. User. Always remember this comparison.

In the States, both new and old media made almost US$400 billion each last year. Which means that old and new media are at an even keel.

Malaysia is always around 3-5 years late, so there is still time. Or maybe not. What worked in the States may or may not work elsewhere.

Look at news portals in Korea and Japan. Oh My News in Korea is very, very strong. In fact, some say it is more influential than any print newspaper.

In Japan, Oh My News shut down, and Yomiuri Shinbun continued their three-million a day circulation.

That being said, there is no reason for not venturing into new media, which is, in essence, simply another platform.

At the same time, is old media redundant and going out the door? Not really. If you look at the States, it still commands US$400 billion a year and still supplies the content which new media so easily disseminates and ties in with consumer experience, which is what the businesses are looking for. In essence, new media makes use of old media's product in a more efficient manner.

I make most of my money from old media. I write newspaper articles, I write movies and TV series. I will continue to do so, but the world is changing and one day, I have to face the fact that the gameplay has also evolved.

In order to make money, new media portals and websites will have to first attract users. They need to provide a unique user experience and/or functionality. Facebook does that. So does Google.

Reddit, Twitter,,,,,, they all serve a function.

It's not a beauty contest. Not really. What the fuck is Google's design? Function first, then form. Reddit has one of the most annoying interfaces I have ever encountered, but I use it because it is functional. Facebook is basically white pages with some blue buttons.

Only after you have a strong user base, who loves the functions on your website, would visit every day and perhaps spend hours on the screen, and only then, can you approach your real customers - advertisers.

The advertising expenditure for online sites in Malaysia is still very low. You know why? The market is poised, but not yet ready simply because there are very few novel, revolutionary ideas to monetise websites that have a strong quantifiable user base either through account registration or hit meters.

In order for you to properly make money off new media, you need to ask a few very important questions. The answers will eventually determine how many people will use it, how strong your user base is, how you will attract advertisers, and how much money you will eventually, hopefullly make.

1. Why would anyone go to your website? What kind of unique user experience are you offering? What is your website's function?

2. How many people would use your system? For what?

3. If you strip away all your own content, what does the website offer? If it cannot stand on this question, on its own, then there are things terribly missing from your plan.

4. If you do eventually get a strong user base, what and how can advertisers profit from this? How is it useful to advertisers? Look, websites are not magic. They do not generate users from thin air. You must have a deep understanding of psychology, maybe psychiatry, in order for you to capitalise or even function with large crowds of people.

5. What kind of novel or revolutionary marketing and advertising service does this eventually provide? Astro-turfing? Direct, measurable user-to-customer ratio? Reaching the grassroots? Creating ownership? What?

I am the Last Wizard of the Century. I offer this - all I have gleaned in the past years, because I want to see good Malaysian websites that benefit everyone. I believe in the freedom of information, and that the more we share, the more we grow.

Bear in mind, that the kind of controlled anarchy evident in social media sites would be the stepping stone to the democratisation of information and opinion. Not embracing anarchy, is death.

The universe is always in a state of flux, always going for balance. This is science. Evident in thermodynamics, chemical reactions, things with molecular structure (literally!) and THIS! IS! MAH! BOOMSTICK!

Any desire for control will be seen as a corruption of the system.

Oh well. I have said my peace. Let the chips fall where they may.