Venture capitalist and entrepreneur Marc Andreessen has a series of interesting tweets discussing his perspective on the future of the news business. It starts with this premise:
Starting point: I am more optimistic/bullish about future of news industry over next 20 years than almost anyone I know. Will grow 10x-100x.
He explains in several tweets how he sees the new business changing in the future. In a nutshell he believes the following (this is my translation or summation of his tweets):
- News should be run like a business; profitability is key to producing quality content
- The news industry is experiencing tumultuous change because incumbents are losing, in his view, "monopoly" or "oligoploly" status in the "control of distribution" and thus pricing
- The advent and global popularity of the internet has led to multiple forms of media - TV, cable, newspapers, etc. - seeing their futures converge on the internet (where there is a proliferation of relatively free content). As a result, they are losing market & pricing power when it comes to distribution.
- There has been a large expansion in the customer base for news - and this growth in (sales) "volume" will (partly) counter the loss of revenues from widespread competition. Therefore, he says: "Big opportunity for news industry in next 5-10 yrs is to increase market size 100x, drop prices 10x. Become larger & much more important."
- Those that offer most breadth or depth in coverage will be the most likely winners in this new paradigm - those in the middle more likely to lose. Based on this, the business models he believes that will survive are the following: Advertising, subscriptions, premium content, conferences and events, cross-media, crowdfunding, bitcoin for micropayments, philanthropy.
- He adds: "the more noise, confusion, and crap -- corresponding increase in need for trusted guides, respected experts, quality brands"
News and media are one of my favorite topics and it is hard to do justice to this topic in a single & quick post, but I'll try. Since I have a fair amount of direct experience in this area and have enjoyed many discussions over the years with many friends interested in this area - like Peter Daou - I'll say the following in response to Andreessen's thoughtful observations.