Umair Haque / Bubblegeneration
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Design principles for 21st century companies, markets, and economies. Foreword by Gary Hamel. Coming January 4th. Pre-order at Amazon.

Tuesday, July 12, 2005

Podcasting Problems, pt 57289 - Market Structure

Kedrosky on Cuban on podcasting b-models - referencing the less-than-illustrious fate most streaming content plays mets (viz,

Mostly, I agree, except that I don't. Uhh...lemme explain.

OK. I think that on average, returns for individual podcasters will be low. But I think returns for podcast communities/aggregators/reconstructors/etc are potentially very large. Now, you probably already know that, so bear with me for a bit of fresh stuff (hopefully).

Mostly, this is because the latter can exploit the single economic property that's made the blogosphere so much more valuable than web 1.0 style homepages - strong complementarity.

A single podcast on it's own isn't very valuable, unless it's a hit (which isn't likely, on average) - but value increases exponentially in podcasts aggregated. Note, there are two conditions.

First, complementarity gains - without them, more than likely you'll realize some kind of linear syndication scale economies. That means podcasts have to change to become more plastic, like blogs - to allow links, comments, tags, trackbacks, etc. This is, if you ask me, the single biggest limiting factor in the growth of the podcasting market right now. iTunes' big push isn't economics - it's marketing. The structure of the market itself has to change to allow complementarity.

Second, a relatively efficient attention allocation mechanism. There's no point in aggregating billions of podcasts unless you can match peoples' preferences with the right ones, and so maximize value creation (which is what's really gonna entice people to switch from mass media). Right now, I'm loath to say that a really good one does - my podcast search costs are, in fact, so high, I barely end up listening to any podcasts.

-- umair // 2:30 PM // 0 comments


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