James Suroweicki, the man that made made the "wisdom of crowds" popular, weighs in on the wisdom-of-crowds-will-kill-old-media debate.
In some sense, the newspaper industry has succumbed to a speculative rush to judgment. People have looked at emerging trends-declining numbers of young newspaper readers, the boom in news and advertising on the Net-and decided that the future is already here. Yet, even in the age of Craigslist, newspapers benefit from the so-called "network effect." Since lots of potential buyers read the classifieds, potential sellers are more likely to list there, which, in turn, makes potential buyers more likely to keep reading. That's why seventeen billion dollars was spent on newspaper classifieds last year. And, while the Net has eroded newspapers' advantage in disseminating news, it has expanded their reach and influence. The Washinton Post, despite its drop in circulation, attracted more than eight million readers to its Web site in February, an increase of nearly three million over the same time last year. Papers may not have figured out how to maximize the monetary potential of this shift, but online advertising already earns them two billion dollars a year.
It's like Laurence mentioned in the comments on my Wisdom of Niches post. Newspapers are going through a painful learning process, but the end will be positive for the ones that survive.
I had coffee with some friends this morning and we were talking about the recent article on Digg in Business 2.0. We discussed how, as the site gets more members, the stuff on the front page gets increasingly worse. There is too much junk to filter through. One friend commented that there needed to be a way to filter through that crap on these types to just get the good stuff, to which I replied "you mean like… having editors?" It was kind of funny, but I guess you had to be there.