There’s are great post by Bernard Hickey over at Interest.co.nz on their strategy for creating value from their web business. Its insightful and grounded and great advice. This was posted in the context of NBR’s new pricing/revenue strategy which has drawn a lot of criticism. Clearly the traditional media market is still grappling with / shaking down how it will survive in the face of citizen journalists rampantly creating great insightful and timely content – for free.
I have been somewhat disillusioned that even the best web sites are still essentially reliant on an advertising driven revenue model. And I have, perhaps unfairly, felt somewhat disappointed that in spite of brilliance in the content the fundamental model has not been improved on.
But.. the channel to market is often the make or break of a great invention or innovation, so are these websites offering a channel (advertising) to a specific market actually in a more powerful position than I give them credit for? And is it actually the efficacy of their channel management that makes the difference between ‘just another website’ and a market leader? Again I’m reminded of Rod Oram’s maxim ‘be the point of pain’ in your market. Is it the websites/businesses that have managed to become the point of pain for the channel that then can do well and command a premium e.g. Google.
So maybe its wrong to be dismissive of advertising driven revenue models, its a legitimate, time proven idea and, like any business model, the differentiation is in the strategy, the management and the insights into accessing, and ‘owning’ that market through dominance of THE channel.
Advertising revenue streams are being reworked, revisited and generally rethinked, I wonder if the strong sites are being intentional in their work or if their channels are being rethunked around them?