Digital Content Fragmenting

Uncertainty aplenty as Web, media leaders convene

“Media, Internet moguls meet at Idaho luxury retreat, most seeking more online revenue

Even the top Internet companies — save maybe Google Inc. — are seeing revenue growth slowing as online audiences fragment. And they worry that, without steady access to high-quality content, they won’t be able to attract enough viewers to keep growing fast.”

Here’s an idea: buy niche content! AOL did it when it bought Weblogs, Inc. With that measly $25MM outlay, they bought access to readers of the web’s #1 blog (Engadget), car nuts (Autoblog), gamers (Joystiq), luxury consumers (Luxist), and Apple fans (TUAW).

Niche digital content is the future. As an example, I used to know some car guys who would spend upwards of two hours per day browsing through a BMW-centered auto enthusiast forum called DTMPower. Tens of thousands of others also browsed the forum regularly, and DTMPower made a perfect niche for advertising. Most of the users drove BMWs and bought aftermarket upgrade equipment, and relevant ads from BMW tuning shops, aftermarket specialists, and BMW sales departments sponsored the site immediately.

If a niche as small as a single auto brand can generate this kind of loyalty and readership, big media should take the hint and buy small niche players.

Media is increasingly fragmented. The future of media is not the newspaper, aiming for the masses. The future of media is the electronic magazine (the blog); it gives the people what they want, and users can decide which niche content they want to consume.