The first industry to face the consequences of an age of data abundance was, not unexpectedly, the news media.
As the web took off, the old model of distributing news through broadcast bulletins and newspapers collapsed along with the advertising model which supported it.
Now the entire news industry is in transition as we look for a modern day David Sarnoff to figure out a business model that works.
Profiting from the transition
In the meantime that transition has opened up a whole range of opportunities for canny and fast moving entrepreneurs with a range of sites looking to profit from cheap or free content.
Most exploitative of these sites are the viral sites who, at best, lightly rewrite someone else’s work before posting it on their own pages. With the rise of Facebook, the social media referrals have boosted the traffic to these sites.
The acquisition of ViralNova by Zealot Media at a hundred million dollar valuation shows the value of those sites at present. Zealot itself is on an acquisition spree as this is the fifteenth acquisition made by the mysterious company this year.
ViralNova and the other viral sites don’t add a great deal to the internet with their glib repackaging of other peoples’ content based around what their algorithms believe will get the maximum traction from Facebook’s systems.
The end of the web
Some even believe this model marks the death of intelligent content on the web with Vice’s Carles Buzz declaring the dream of the highbrow internet is dead as sites like ViralNova and Upworthy come to dominate the web.
Wall Street Journal however sees the opposite in proclaiming the ViralNova move is the highpoint for the content farm business model as the economics and business risks of depending upon Facebook for traffic are ultimately doom these ventures.
Sites like The Awl in the meantime see their future in writing intellectual articles for a small but tightly defined audience. At the moment web advertising economics favour high traffic over highbrow however it may be in the medium term the higher quality will win.
High volume over highbrow
Recent history hasn’t been kind to those backing sites like The Awl however the viral media and content farms have seen their finances become increasingly shaky as online CPM rates decline and Facebook increasingly controls distribution.
The news model does need to be reinvented and someone, somewhere in the world will do it, although the person who cracks the code is as likely to be a smart kid in the Rio barrios or Mumbai slums as some VC backed Stanford graduate in a SOMA loft. For the moment though savvy entrepreneurs like those behind ViralNova will be making a quick buck.
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