Nicholas Carr Disputes The Threat to Mainstream Media From The Long Tail (CNET, TSCM, TWX)

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Includes: CNET, TST, TWX

Nick Carr, ex-executive editor of the Harvard Business Review, argues that far from overturning current media models, blogs will come to resemble "old media". He writes:

...the blogosphere is going to end up looking a lot like the old "mainstream media." Rather than being a great democratic free-for-all, the blogosphere will become steadily more rigid and hierarchical. Structurally, it'll resemble the magazine world. A relatively small number of high-traffic blogs will dominate the market, and then there'll be a whole lot of more specialized blogs with fewer readers... It won't be quite as hard for blogs to climb the hierarchy as it is in the print world (simply because the costs of blogging are so much lower), but it won't be easy, either.

Indeed, the technologies we use to manage our blog reading will reinforce the hierarchy. RSS, for example, imposes the old subscription model on the blogosphere - it's fundamentally anti-democratic, as it tends to lock us into a set of favorite blogs. (Even though blogs are free, the subscription model imposes real switching costs.) Also, the inevitable (in my view) shift away from blog search engines based on posting date... to ones that use measures of "relevance" based on traffic or link intensity... will also make the hierarchy more rigid and less democratic - as will third-party headline aggregators like Memeorandum, which also tend to reflect and reinforce established patterns of popularity.

Nick's argument is important for investors in media and Internet stocks. First, it provides justification for AOL's purchase of Weblogs Inc. Weblogs' sites are among the most popular blogs (well, at least Engadget is), and if early market leadership is self-reinforcing as Nick argues, then AOL's acquision looks like a smart and frugal move.

Second, Nick's perspective throws into question an argument repeatedly made here, that the proliferation of content via blogs poses a threat to established offline and online media companies. I've argued that the explosion of technology blogs poses a threat to CNET (ticker: CNET), and the growing availability of stock market blogs poses a threat to TheStreet.com (ticker: TSCM). (Full disclosure: I'm short both stocks at the time of writing.) But Nick seems to suggest that only a few blogs will make it big, and the others won't matter.

Note the contrast between Nick Carr's views and Paul Graham's. Paul argues that 95% of blog content isn't worth reading, but the 5% that is poses a significant threat to established media companies. "The pool of writers is very, very large", he writes. "...the best writing online should surpass the best in print."

Perhaps the outcome of this debate hinges on the future of search and content aggregation. If search algorithms and content aggregation sites reinforce the popularity of the early leaders, then Nick is right and the outstanding content that Paul writes about will fail to receive the readership it deserves. But if search, aggregation and word-of-mouth and linking in the blogosphere constantly raise great new writers into public view, then the 5% of content that Paul writes about will indeed be a threat to the established media companies.

And this is where Chris Anderson's work on The Long Tail kicks in. Looking at Amazon and Netflix, we find that most sales come from the mass of relatively unpopular books and movies, rather than the few best sellers. Which seems to suggest that the mass of worthwhile online content will also somehow bubble-up into public view, and will ultimately take meaningful market share from the current players.

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