It’s the same in all electronic media (i.e. TV and Radio). There is a fixed amount of prime and fringe space. You can always sell your prime space, but the key to profitability is selling your fringe.

That requires efficient pricing and packaging. You need to look at your inventory like a buyer would and try to create efficiencies through buying less demanded space and freeing up inventory on high demand pages. New Media differs somewhat from offline media because there are more pricing options. For instance, you can sell ROS on a performance based metric like PPC or CPA and sell home pages by CPM.

TV stations actually do something like this by selling time to infomercials during low demand dayparts.

- Greg

- Greg

Would you be so kind as to expand on your comment about the need to learn inventory optimization in the new media revenue model.

Rick

Thanks for your input. I think there are a variety of solutions to the problem. The main point is that they will be different solutions than most media companies are used to.

- Greg

Right on the money as usual. I totally agree with all of your points, but I really, really like #3. For me that’s one of the most powerful. For the most part all of these companies are doing is taking commercials from tv and just planting them on their internet channels (which is ok) but you’re not going to be able to make the same amount of money with ads online as you did off. Many companies are going to have to rethink how to offer value because the ad revenue model alone, as you stated, is not going to cut it. If you imagine a world without ads or limited advertising what would you offer? I think questions like this allow opportunities for creative thinking about innovative products, services and experiences that audiences and customers could value.

Yes. I think you’re absolutely right. From my own experience running a multimedia company it seems clear that integration is key to the success of any media company, whether it’s online or offline. Moreover, most media have done quite well during the internet age. There are some exceptions, newspapers are getting killed, but for most media businesses the opportunities far outweigh the threats.

- Greg

Excellent points!

I think the basic difference between old media and new media is that the former is focused on maximizing visibility, while the latter is all about maximizing interactivity.

On a different note, I don’t know if there is a transition happening between the two media – maybe they are destined to co-exist?

For example: I see a lot of direct mail and a whole new wave of special magazines coming onto my desk these days – maybe because email in-boxes are getting steadily saturated?

If TV commercials are anything to go by, they seem to have a preponderance of ads that promote websites and web features for products like cellphones (Connect to FaceBook on our new model!).

So it seems that the visibility cavalry and the interactivity troopers might march together on the media frontline, after all.

Thanks. I’m glad you liked it.

- Greg

Your points are well taken and in the right cases, will be passed along.

100% agree. I once attended a Publishing course at Stanford and there was a lecture about the “Great Digital Threat.” After looking at the numbers she presented, I said “you mean over the next 10 years we lose a few share points and get a whole new business? Where’s the threat?”

Everybody in the room gave me dirty looks. The kicker is, I was the only one there who HAD a successful digital business:-)

- Greg