Yesterday, Richard MacManus of ReadWriteWeb wrote about the RSS reader market being in disarray.

One of the interesting trends of 2009 has been the gradual decline of RSS Readers as a way for people to keep up with news and niche topics. Many of us still use them, but less than we used to.

Richard has a very early adopter angle on things, so he tends to use Twitter for finding news. This makes sense given his position at ReadWriteWeb and many other early adopters feel the same way.

This morning we had a response from Jeff Nolan at Venture Chronicles, where he stated that there is no RSS market.

The problem isn’t that the market is in disarray but rather that there is no “market” for something that is, in spite of being free across the board, not growing in end users or with publishers. On any given day there are likely no more than 1 million active RSS users, and half of those are committed to Google Reader which is a pretty good product at this point. This may sound like a large pool of users but it most certainly is not when it comes to formulating a product strategy…

Jeff also has a different angle than most people, he is looking at this like a venture capitalist. As a VC, you will likely look at a product to determine if it will gain adoption from the mainstream user. Obviously, that will never happen with RSS readers.

The problem with both perspectives is that they are assuming RSS readers needed to go mainstream in order to be successful. This also tends to be the standard of what most people consider as successful. However, there are tons of products that are hugely successful in their niche. Look at CAD software. There is a very limited number of customers for CAD software, but CAD companies can make millions of dollars per year. The real question is whether the niche can sustain a product at all. That is a different question because of the prevalence of free RSS readers.

However, what if we broadened the RSS reader term? In reality, what are sites like Digg or Reddit? Are they not just RSS readers with voting attached? Granted, they do not look like Google Reader or Bloglines, but who says they need to? Can we say that Digg and Reddit have been very successful and gaining significant adoption?

This becomes a more interesting question when people post numerous links to blog posts on Twitter. Richard states he uses Twitter to “find news”. There are also a few applications that mine Twitter for links and display them as a news site.

The definition of RSS reader has been limited due to the implementation of the tools currently implemented. The presentation of RSS is where many sites tend to fail. In many cases, they want to look like Google Reader or Bloglines because that is what an RSS reader is supposed to look like. If you have looked at Netvibes recently, you will see that they have attempted to move away from RSS reader presentation and closer to a news site. This is likely the direction many sites will take in the future.

RSS readers are news sites for geeks or those people that do not want the clutter a major news site gives them. RSS readers allow these people to read or skim everything that they have decided is worth their attention. In many cases, the people using RSS readers are the people that post those interesting links to Twitter. It is possible, those people using an RSS reader are the curators for the news you now read. So, are RSS readers dead? Nope, they are just niche products that will continue to have a strong future until something truly disrupts how we get information.

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