Om Malik and Michael Arrington
Image by Mathieu Ramage via Flickr

On an average day this week around 6000 people visited my Spanish blog and 1200 people visited my English blog. But on those same days I sent around 11,000 RSS feeds in Spanish and 5300 in English. If you are a blogger like me who is only out there to disseminate ideas, you don´t advertise, then you don´t really care about how people read your content, and RSS is a plus. But if like Om Malik or Michael Arrington you have to make a living out of blogging RSS can be pretty bad for you. Yes there are feeds with advertising but they are probably even less efficient than advertising itself. I once debated Michael Porter at Davos on the overall value creation of the internet. I argued that the internet created valued and he argued that the internet destroyed value. Examples like RSS vs blogging show that the issue is still not solved. So far the internet is clearly taking value away from old media industries such as newspapers, the recording industry, the movie industry, and it is not clear that similar value is being created. I wonder if there is a recent study of the overall value creation/destruction of the internet in the last 5 years that could settle this issue.

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gregorylent on December 6, 2008  · 

from a whole-system point of view, and if “value” means more ideas expressed, then there is no question …

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Julien on December 6, 2008  · 

The debate wether RSS is creating value or not is an old one. In any case, as you mention, yes, it’s a problem for blogs that need to advertise, but it’s also a problem for you because it fails to tell you the actual number of readers for a given post (Feedburner gives you the number of susbcribers of your feed -which is probably wrong, with duplicates…-, but not a figure by story/entry). Also, feeds limits the ability of your visitors to comment, share, prase the stories you’ve published. It also enables “spammers” to duplicate your content without any reference to the original.

You should really give a look to something like (the startup I founded) to see that there exists other alternatives than RSS readers for your content!

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Francesco on December 6, 2008  · 

Sorry to say that, but asking if something is “creating value” not clearly defining “value” is absolutely clueless. At best it will generate a long / short list of value definitions, at worst a discussion where everyone is using the same word (“value”) with a different meaning (the classic talking among deaf persons).

Martin, please define what value (or at least 2-3 definitions of value) and then we may discuss properly.

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Daniel on December 6, 2008  · 

Value generated is bigger. The ratio of value captured by users/captured by publishers is much bigger. Internet shifts all the bargaining power to the users

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Martin Varsavsky on December 6, 2008  · 

@ Francesco:

I am installing greasemonkey in a new computer and a script that allows me to respond to blog posts. I already responded to this one but I see that the reply is not there so I will try again. What I would like to know is simple, it is to take the 10 largest old media companies say 5 years ago and look at their market cap and compare that summation with the new media companies of 5 years ago. And then see if more value has been taken away from old media than created in companies like Google or viceversa.

Francesco on December 6, 2008  · 

Martin, thank you for the definition I was asking. Now the question is very clear.

My two cents. I don’t have this list of companies you mention, but I suspect that if you include Google in the new list, then the top 10 media companies of today sums up more value than the top 10 media companies of 5 years ago. If you exclude Google from the list, the opposite is true.

Apart the top 10, I see today a long tail of new media companies that are much more innovative than the corresponding ones 5 or 10 years ago. And this innovation, after or before, should transform itself in value.

Too optimistic?

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Zupo Llask on December 6, 2008  · 

Martin, in my opinion that’s one of the most pertinent these days and I’ll try to explain my point of view…

Francesco, I suspect that even if you include Google and that long tail of new media companies the sum may not be positive for “a single reason”: I don’t have all the supporting data I would need to make such a claim but I suspect “old-school” media companies had a much higher sustained monetization capability than new media’s.

Imagine an old-school media group with an influence in its industry comparable to Google’s both NOT living their best days. Are you really sure that Google will be more efficient monetizing its business in the long run than old-school businesses were? Think relatively/proportionally…

I’m not. But this doesn’t mean I already came to a conclusion. In fact my business is precisely trying to sort that problem out (like Martin’s, you and probably every reader of this blog).

I feel that we are still riding the edge of the wave and (almost) nobody came to a final conclusion yet. And that doesn’t make me feel very confident…

But who knows? Maybe with no big waves to ride, the solutions will make themselves more evident. 🙂

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Francesco on December 7, 2008  · 

Zupo, you make a very good point when saying “I suspect “old-school” media companies had a much higher sustained monetization capability”

But wait a moment. Were this old-school media companies just an oligopoly? Players in a highly-walled industry?

If you look at oil companies today, they form an oligopoly and because of that they are very good in making money. So they create great value … but just for them and for their shareholders! And for the society as a whole?

Something similar could be argued for the media industry. Before it was an oligopoly, everyone inside gained lost of money. Internet broke down the entry cost for new players and, consequently, that oligopoly.

Now is much more difficult to make money. But so what? Maybe with a different definition of value we may conclude that Internet is generating lots of wealth, independently from money.

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David Loughry on December 7, 2008  · 

Similar or greater value is being created, but we aren’t noticing it or taking advantage of it nearly as much as we might. And, it isn’t always the kind of value that shows up financially. Networks and the Internet shift the terms of the debate from elements, such as objects, people, businesses and governments, to the proximity and to proximities. To see a new growth model which is focused around the proximity, see the page my name above links to, or use this link:

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Nic Brisbourne on December 11, 2008  · 

Hi Martin – I think some industries will get smaller because of the internet – music for example where the price of music is coming down as margins no longer have to cover physical production and distribution. Newspapers and movies/tv are probably the same.

That said there are some new industries being created, so not sure where the net position comes out.

I blogged some thoughts about this here.

Good to meet you at the WAYN stand yesterday.


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