Scott Karp has suggested five principles to guide ongoing transformation of media companies. In summary, these are:
1. Networks are now distribution channels
This is consistent with control being diluted as opposed to concentrated (eg. in a distribution monopoly as with traditional media companies). But as Karp notes, successful new media business models such as Google develop market power through harnessing network effects.people are more powerful than institutions.
2. People are more powerful than institutions
This is about collaborative networks between individuals replacing the power of institutional hierachies. This view is certainly support by others. Here is one example from ‘Wikinomics – how mass collaboration changes everything’ by Don Tapscott and Anthony Williams:
“The new promise of collaboration is that with peer production we will harness human skill, ingenuity, and intelligence more efficiently and effectively than anything we have witnessed previously. Through the evolution of
the internet and the ‘Participative Web’ networks of participants “can be mobilised to accomplish much more than one firm acting alone”. In the digital economy, access to knowledge – within as well as beyond the firm – drives innovation and new value.
3. The best content comes from many sources
Search has taught users they and find content of their choise from mulitple sources. That is in strong contrast to a key assumption in traditional media – that readers, viewers will come to them. Successful new media business models will aggregate or provide links to content that users want.
4. Search still rules
Search rules because search engines help people to find the content they want. Search engines are currently the most successful means of monetising the web.
5. Advertising must create value
In other words, advertising online must be useful to users to work.
