I see the following trends occuring:

Ads

  • Banner ads and click ads will be become much less profitable. There is a reason that news companies are going bankrupt: ads don’t pay enough.

Micropayments

  • Micropayments will become hugely popular. It will become effortless to buy something on the web for 25 cents. Facebook, PayPal, (and maybe Google) will become big players in this industry.
  • There will many sites that will charge for content via micropayments. What if you could subscribe to a blog or a website for 25 cents a month? That would be a solid $2.5k a month from 10,000 subscribers. At $30k/year, you could be a full time blogger. What if you could pay to view the rest of an article for 5 cents? Apple’s app store is a perfect example of effortless purchases that don’t cost a lot

News (and other content)

  • News companies will generally become smaller and more diversified. This is already happening. News companies are no longer the giants they used to be. There are a lot more independent journalists, citizen journalists, and bloggers.
  • There will be a long-tail of news content producers (http://en.wikipedia.org/wiki/Long_Tail). This is already happening.

Platforms

  • Users will consume content on tablet-like devices. This includes the Kindle, the iPad, tablet PCs, and laptops.
  • I don’t know if this will happen in 5 years, but the benefits of the Kindle, the iPad, tablet PCs, and laptops will be consolidated into one device. An analogy is the camera, PDA, and cellphones being replaced by smartphones. I envision a device that is as slim as an iPad, as lightweight as a Kindle, and has the performance of a laptop. It will have great battery life and a keyboard. It will have an e-paper-like display that is great for reading and that can also be backlit. You will be able to write on this e-paper to take notes with an experience almost like pen and paper. This device will have wireless internet.

This is where we could potentially fit in:

News team has a common goal of allowing users to share and have high quality conversations about news articles.

What I have noticed about content consumers (myself included) is that they have multiple spheres of interest groups they don’t want to mix. I would only share business articles with a certain group of people. I would share and discuss politics with yet another group of people. I certainly wouldn’t post a tech article to my Facebook wall for the world to see (spam). Almost everyone I have talked to uses e-mail to share and discuss interesting articles. What I feel keeps the quality of a conversation high are the people involved.

Imagine users can form these groups. For example, friends, family, the fraternity, tech junkies, entrepreneurs, etc. Groups could be public or private. They could be invite-only. Just like in real life. Then, these users can socialize around content. They can selectively share content. The can follow each other. They can follow topics (like Tunisia coup). It could be a social network around news and ultimately content.

If this vision is possible, then there is ample opportunity for monetization. Imagine we have a community of users with clusters of interests. We could distribute premium content. This content includes large content producers like NY Times, WSJ, the Washington Post, and Sports Illustrated. (The recent startup Ongo is proof that these companies are becoming more open-minded.)

It also includes the long tail of publishers like bloggers and independent journalists. Users could purchase premium “micro-subscriptions” to content. Imagine they could pay 3 cents to view a blogger’s article on the health benefits of the avocado.

We would offer a social and potentially viral audience to content publishers. This is something Amazon or Apple wouldn’t be able to offer.

Of course these are all hypothesis. Time to validate.

-Venkat

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