The Transformation of Content and Its Impact on PR

Practically since the beginning of the commercial Internet, there's been this back-and-forth tug regarding business models that have dominated the conventional business world and predictions over how much of that would translate to the Internet.

In the mid to late 1990s, the notion was that advertising would step in and solve everything, which explains in large measure why most business plans of Internet content sites based most of their revenue models around the ability to attract ads. Of course, the go-go 90s that played host to a ton of predictions about how the conventional world and its business models would be overturned got a big dose of reality in 2000 when the markets started cooling to the ideas.

While many thought that the fall out from the "dot-com boom" would usher in a new round of sanity and more fact-based analyses of the Internet's impact on the business world, sometimes it seems all that happened was just a thinning of the crop. Even now, with all the predictions of a dire economy that lay ahead, you still have people who bank on the Internet and related content platforms with rose-colored glasses that aren't giving them the full view of the picture.

For instance, many PR firms are treating the blogosphere as a vast, new media platform that will upend the conventional world as we know it. They're advising clients to pile a ton of money in new media initiatives, convinced beyond belief that it will pay off. Obviously, as a keeper of a blog, I'm not against the concept of blogs by any means, but I think we do have to radically realign our notions of what they are and the role they'll play.

One of the things I've never understood about the blogosphere is why we're promoting something so heavily that essentially just leads to a decentralized audience. By that I mean, having hundreds of platforms for content may be wonderful to those who want to read it, but when it comes to monetizing a platform like that and building revenue models around it, the challenge will be immense, since the audience will be so decentralized.

One one hand, blog enthusiasts could legitimately say the low barriers to entry from a cost perspective make that point largely moot; they'd be right if the goal was to simply establish a content beachhead, but when it comes to making money, you need some mass audience. Essentially, the more content platforms we have, the more the overall value of content is dilluted until we achieve some sort of mass.

In a recent editorial, Wired editor Chris Anderson predicts that free is the future of business. In promoting a system he calls "freenomics" -- a play on the widely read book Freakonomics, Anderson says decisions like that of The New York Times to take down their subscription wall and make all its content free serve as an example of things to come. Outside the content area, he also points to cases like the British rock band Radiohead, which freed itself from conventional record-label marketing to offer its latest album directly to the consumer and whatever price (s)he is willing to pay.

He goes on to point out how there are many versions of the "free" model, and most involve at least some sort of payment for a portion of a site or a value-oriented addition to a service. And in many ways, he's right about the fact that Google, Craigslist and others have shown the free model can work. However, it also has a number of big hurdles and we'd do well to examine them before creating Dot Com Bust II.