UsableMarkets

There’s been a bit of a news storm about the launch of HubDub at the DEMO conference. And deservedly so. Much of the feedback from the prediction market industry watchers has been positive.

And I agree with their assessment. There is much to be said for HubDub. But perhaps the most important thing is that it provides a compelling service to news sites.

Nigel and the team must have had their eyes well trained on the news industry when they developed the site. (Surely a white label application is in their future, although I don’t know this). And while other media sites have implemented prediction markets, none have yet made the connection between predictions and content in quite the way HubDub does. And this connection will surely make publishers smile, since it generates hits (and therefore ad revenue) for their site.

To be more explicit, news, as an information good, is perhaps one of the most commoditized products on the internet. Almost every major news company syndicates their news feed to other providers of, well, news. Find a story on Reuters, and it’s not too difficult to find the same news item on Google, Yahoo, AOL, CNN, the NY Times, and so on. Essentially the cost of news has been driven down to the price of viewing an advertisement.

News sites are desperate to keep users on their site, since the cost of switching over to a new site to view the same article is so low. Loss of viewers of course means loss of ad revenue. So what are the news sites to do?

They really have no choice but to find ways to improve the experience, via social networking and other innovations. For them to succeed their users and their content need to enter a symbiotic relationship, and the value must remain on the site. New sites, in a desperate attempt to engage network effects to retain viewers have embarked on such things as citizen journalism, rating of news articles, and, of course, prediction markets.

But prediction markets, as stand alone features bolted onto new sites, weren’t guaranteed to drive any additional traffic to the news sites. But now, if HubDub does indeed “white label” their application and sell it to news providers, they will have found a way to generate page views from a prediction market for these sites. And that’s interesting.

So while InTrade has found fertile ground in the betting world, and Consensus Point and NewsFutures found fertile ground in the corporate world, my own prediction is that HubDub will find fertile ground in the online news space. It’s just a matter of time before you see HubDub at your local news site.

As always, thanks for listening.
~alex