Wednesday, June 10, 2009

Audience and cost curves - some dull micro economics

Pete Ashton has an interesting post about the changes in the distribution of media audiences. He essentially presents a flattened power curve for the relationship between audience reach and size of media outlet. The curve shape he says has changed from a teepee to a yurt. This can be expressed another way as above - illustrating that, as well as Pete's point, for the first time high reach options are available at low to zero cash cost. Old media retains the very high fixed costs (print, distribution, broadcast, transmission, legacy penions etc) making them vulnerable to market entrants with low to nil fixed costs and thus more flexibility.

I shall write more on this and the implications for the changing costs of engagement in due course.

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