The advent of social content sites like Digg and Reddit are an important trend on the internet. I have a few thoughts on how this trend will develop over time and how it could impact your business. But first, I need to put it into a little bit of context.
It is interesting to note the historical differences in the industrial structure in the tv/cable industry versus the magazine/newspaper industry. Traditionally, there have been relatively few television stations that carry a wide variety of un-segmented content. For example, ABC carries news, sports, soap operas, movies, etc. On the other hand, there have been a relatively high number of newspapers and magazines that carry narrowly segmented content. For example, there are local newspapers like the Daily Transcript from my home town and magazines such as the Wired that just focus on the tech crowd. This difference in industrial structure makes a lot of sense because the barrier to entry to create content and make a market for advertisers has traditionally been far higher in the tv/cable industry than in the magazine/newspaper industry.
We are currently at the beginning of the social content industry and there are a handful of players including Digg, Reddit, Youtube, del.icio.us, Netscape, etc that make up its industrial structure. Recently there have been some new entries into the space, some of which are going general purpose with sub-categories and others of which are going into narrow segments. Along the specialization/segmentation spectrum, I am predicting that the industry will look a lot more like the magazine/publishing industry than the tv/cable industry. The barrier to entry for new sites is going to get low relatively quickly. The likelihood of sites like digg being able to make hay with their subcategories is relatively low as the home page will scare off new users outside their core. The advertising platforms like Google's AdSense will get better and hopefully start leveraging user data in addition to page data. The bottom line is I think that any "market" with a critical mass of readers (fly fishers, IT security professionals, comedy) will ultimately have it's own social content site populated with zealous users. In the future, I think there will be millions of these niche-topic social content sites -- just like there are millions of blogs today.
So, what does this mean to you? In your industry, you likely already have trade rags (i.e. The CAD Report). I suspect these trade rags will either have to transform their models or they will be disrupted by a bunch of market participants who were looking to collaborate in new ways. If you think you are in a market that fits this type of profile, it might make sense for you to join with some other folks and start your own social content collaboration site.
Do you agree with me? What do you think the industrial structure of social bookmarking sites will look like in five years? Will they be uber-sites with catagories or highly segmented like I predict? Will independent companies get set up around these things or will the trade rags figure out how to leverage the community to create value for the readers and advertisers?
As a small experiment, we've launched a niche-market social content site focused on business geeks (basically geeks that are passionate about business issues like marketing and strategy, much like technology geeks are passionate about technology). The site is called DailyHub.com and it's in early alpha -- but sort of works. If you're a business geek, we'd love for you to check it out. If nothing else, we think you'll find some great content of interest there. If you're curious about what would motivate us to do such a thing, you can read the DailyHub Manifesto.
Meanwhile, if you have thoughts on the whole concept of niche-market social content sites, please leave a comment. We're very interested in hearing what you have to say.
