The power of the niche

Read a couple of things today that seemed entirely unrelated at first, but then it all came together in a magnificent way.

Locally, ABC chief Kim Dalton says that we should be regulating Internet content like we do TV content. Thought he was talking about censorship at first, which is both dumb and unenforceable online, but it turns out he’s actually referring to levels of Australian content, which is a completely different concern, but still largely unenforceable online.

He is worried that with more people getting their entertainment online, and even more major media groups either putting work online, or switching to online, that any rules we have on making sure there is Australian content out there will just fall by the wayside, because foreign content is both numerically more plentiful, and just cheaper for local distributors as well. And he’s probably right. So what do we do about it?

Well, the key has to be the niche. Part of this is that mainstream media outlets used to mainstream profits really don’t know what to do online — where there is money to be made, but probably not with the same amounts or the same overheads of traditional media. It’s the place for small teams to thrive, small companies, small media makers. And the mainstream doesn’t like that.

It ties into another piece I read, about the Seed Conference in Chicago, put on by 37signals, a company I’m a big fan of, as well as some others. They speak of small companies doing great things, of not expanding unnecessarily, of following your niche, or creating your personal brand. All things I’m a big fan of, but it has slightly different applications for Australia. And it’s all about the niche.

In the US, these guys can create a niche for their domestic audience, and draw 30,000, or 50,000 or a million readers to their site or product, hit a great profit line, but still be a niche. They make a great business, and they thrive based on the fact that they’re still only trying to hit a niche, rather than make any play for the mythical “mainstream”.

But in Australia, of niche is almost never enough for anyone to get by. The equivalent niche here is lucky to be 10,000, or 20,000, and even if you hit that, the profit margin is barely there. And the more you hit in a small market, the close you go to the mainstream, which means the broader you need to try and make the voice. And you lose out to the existing players when that happens.

The only option is to try to pitch to the wider international audience in your niche, then you wonder if you need to broaden the content, then you wonder if you’re losing your Australian voice. Which comes back to what Kim Dalton said in the first article — if you spread your audience too far and try to appeal to them to make something happen, you often end up dropping your Australian identity, which is another problem.

So we either end up with niche businesses that really don’t occupy enough of a place to have real viability, or wider businesses that push themselves on the overseas audience so much that they lose all sense of being local.

There’s probably more to this, but I can see the problem both ways …

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