Two ways the new Flipboard could disrupt media: Advertising and revenue sharing

Flipboard, one of the leading magazine-style news apps, released an update on Tuesday with a number of interesting features, all of which are designed to make it easy for users to curate content with the app and create their own custom magazines. There was a lot of press about the launch, but I think most of the coverage missed a couple of crucial aspects of the new features and how disruptive they could be — not just to traditional media but to all kinds of media.

As we tried to point out in our post, Flipboard’s new version is more than just an evolution, it’s a significant departure from what the service was all about. Until now, it has been about making it easy to discover and consume content from multiple sources, but the new features are all about turning readers into publishers — by giving them curation tools like those used by Flipboard’s own editors.

When advertisers become publishers

Flipboard’s move may seem like an obvious step, and one which combines some of the appeal of services like Pinterest or Tumblr. But depending on how Flipboard decides to proceed with these features, they could be very disruptive indeed. Here’s a couple of ways they could do that:

1) Advertising: Flipboard’s curation and publishing tools are not just for individual users, but corporations, existing publishers and brands — and one overlooked element of the launch is that Flipboard is building e-commerce functionality into the app. Chief technology officer Eric Feng said some advertisers are already creating their own magazines using both their own ads and content from other sources. Those magazines could then be selected and highlighted by Flipboard’s algorithms just like any other effort by a Flipboard user.

We’ve written a lot about the phenomenon of “native” advertising (and will be talking more about it at our paidContent Live conference on April 17 in New York) as well as related concepts like sponsored content and what some call “brand journalism.” The idea is that brands and advertisers now have all of the same tools that traditional publishers used to have a monopoly on — that is, the ability to create and distribute interesting content and reach audiences directly. If a brand can curate content itself, and have its own ads with e-commerce features built in, why does it need a traditional magazine?

2) Revenue: Flipboard already has some partnerships with media companies in which it gets to use more of their content directly in the app (instead of showing just short excerpts and then a “web view” in a browser) in return for a share of advertising revenue. When I asked Eric Feng whether Flipboard might consider doing a revenue share with individual users if they create compelling magazines from curated content, he said “that is something we are thinking about doing at some point in the future.” That’s not a promise, but it’s still an interesting idea, and potentially very disruptive in a number of ways.

If Flipboard provides the content and the tools, and the users who curate that content are generating a lot of value in terms of pageviews or “likes,” or whatever metric you want to use, shouldn’t those users get some benefit? Where this gets problematic is how Flipboard decides who gets what share of the revenue. If the ads come from a traditional media outlet, do they get the largest share or does Flipboard? And if media companies don’t want to play ball, does Flipboard just monetize their content anyway, the way Huffington Post and other aggregators do?

The idea that advertisers now have many of the same tools as publishers and traditional media companies do, and that readers and consumers of content also have much more power over that content than they used to, are two pretty inescapable facts about the new media landscape — and Flipboard has just staked a claim to some significant territory on both of those fronts.

Post and thumbnail image courtesy of Shutterstock / JJ Studio and Shutterstock / Eldorado3D