How Supply And Demand Will Shape The Sports Content Business

My brother and I still have the scars from fighting each other as we raced to the kitchen, diving like Wes Welker for the morning sports section. We battled for the first crack at the precious box scores and game summaries, but also for the right to spoil the fun for the other by blurting out "Giants 5, Phillies 3 ... Jack Clark hit a home run ... ."

Fast forward to today and what does that sibling battle look like in homes each morning? Two brothers waking, one pulling out his iPod Touch or dad's iPhone, the other cracking open a laptop or clicking the mouse on the family PC -- or better yet, lounging on the couch with Mom's iPad. As a matter of fact, both brothers can create and consume their own sports content experiences without inflicting bodily harm on one another.

However, whether its traditional publishers bringing their content into iPad app format or Demand Media's recent IPO filing delivering the term "content farm" into the vernacular, digital media technologies continue to alter the economics of content creation and consumption in ways that require a new approach to content publishing.

The good news is that for content creators willing to revisit good old economic principles, a roadmap might emerge for publishers to follow as digital technologies continue to change the game.

1. Supply Side -- More Content Is A Good Thing

Back to my brotherly battles for a minute. Once one of us got his hands on the prized sports section, he would flip through the few pages of the previous day's stories and recaps, and that's all we got for the next 24 hours!

Nowadays, with multiple connected devices and thousands of pieces of content being produced each day, everyone gets to wade in to whatever sports media experience they want to create. And, thanks to Web-based publishing tools, anyone can be a writer or columnist.

Perhaps nowhere is the supply growth more evident than in the proliferation of sports content beyond the standard news and game recap reportage that dominated for so long. Opening up publishing capabilities for fans has enabled countless angles and voices to "swarm" around a news story, thus creating a broader array of analysis and opinion that in turn unlocks much more value than the game recap.

2. Demand Side -- Consumer Driven Is A Good Thing

As any Econ 101 enrollee will tell you, supply is but one-half a marketplace. Assessing demand is equally important in being able to truly determine the potential value of any market.

Here again, the traditional approach to determining demand does not necessarily create the most efficient outcome. Relying solely on a small set of experts to make the daily editorial decisions cannot accurately take the true pulse of what consumers want.

Search markets spanning Google, Yahoo and Bing provide a real-time glimpse of what fans are looking for -- and by extension, a better proxy for what people are looking to consume.

Looking ahead, the next wave will be powered by social networks such as Facebook and Twitter. Today these streams may still be a bit light on the signal-to-noise ratio, but it's a good bet that they'll ultimately deliver publishers guidance on "what to create," "how to create," and "when to create."

3. Efficient Content Markets -- High Quality, Scalable Businesses

Some folks fear that when content can be supplied in such large quantities and shaped to meet real-time demand, the user experience devolves to some lowest common denominator level and, worse yet, the core business model withers away as a result.

Bring it back to economics. Every day -- actually every few minutes -- content supply and demand can be brought in to a market clearing point of equilibrium. Quality content will be consumed in high volumes, low-quality content will not. The world will still crave stars in sports journalism -- the Frank Defords, Jason Whitlocks, and Bill Simmonses will not become dinosaurs rendered extinct by digital media.

On the contrary, we'll still hoist our new stars to the top of the heap -- we just may find that some of them come up through a different digital media training system.

The power of efficient markets should allay concerns that digital media disruption will kill the business of sports content publishing -- or any content publishing for that matter. So long as there are still siblings who crave stories about Brett Favre's latest drama or whether the Red Sox are a big bat away from making a playoff run, there will be vibrant and expanding sports content markets.

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