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Media in the information age – an information value chain perspective

Following a great article “A solution for the newspaper industry”of Elias Bizannes an Australian Information Value Chain pioneer and passionate blogger on web business models and trends , I will provide some comments about my current research about data-centric business models and the information value chain.

The information value chain

As Elias already has identified: The main strength of the media industry is data (content) generation, processing and aggregation of raw content into comprehensive stories. The value added is filtering and aggregation based on the perception of the consumers needs and therefore the reduction of information overload (in academic terms – search and transaction cost).

In our information value chain, the 4th step – Integration /Information generation – is encompassing the aggregation of data from different sources and types (e.g. the content aggregation like GoolgeNews etc.). In the integration business, the media companies have the huge disadvantage due to technology constraints and moreover independence and neutrality. Simply said, other news companies wouldn’t allow content to be integrated into other companies portals (besides if they are no competitors in the data generation step). So to cover the whole information value chain might ultimately  impossible to achieve for media companies.

Also analytics (e.g. advertisement – step 5 of the Information Value Chain (IVC)) once core for media companies  is substantially disrupted in the information economy – ad margins are in free fall and traditional news companies failed to adapt to online ads and let tech companies fill the gap. Nevertheless, media companies and content still dominate a large part of the web.

German news companies such as  Bertelsmann, Holtzbrinck etc have recently put a lot of effort (money) into Web 2.0 communities, websites f.e. Facebook “copycat” studivz. But due to the new social style of communication we observe that traditional media companies are not able yet to push and syndicate their content through their attached social media channels. They fail to expand both, the reach of their ads and content and on the other hand side to capture user generated content and behaviour to further improve news aggregation and distilling processes.

Concerning presentation (step 6 (IVC)), there is a t the moment a trend towards mobile news that could be charged through micro payments. News companies are already dreaming of an ITunes nodel for news. In my opinion that is a huge option for news companies for sustainable and future revenue, if they are not already too late and tech companies like Apple and Google will fill this gap.

Also “niche is the new mass” is logically thought a good option for media companies to unbundle content as well as perform aggregation and analytics to establish value adding niche communities. German media company Holtzbrinck is already very successfully in producing niche content with gutefrage a “Question and Answer Community” and jogmap a community for exchange running tracks online.

As a conclusion. I agree to Elias, that newspaper have to concentrate on “great content” and use their superior aggregation power to add some further social filtering and collaboration features in order to decrease information overload and provide the user with relevant, personalized and interesting news. Nevertheless, as a fan of the Spiegel magazin I hope print will not die completely.

Please participate in my 5-10 minutes online survey on data-centric business models and the information value chain.

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