Media in Trouble: What went wrong?
The media industry is between a problem and a solution; it is a dark place. When you have a problem but the solution is not certain, it is quite anxiety-inducing. I choose not to look at the solution however as something that is out there and needs to be found, or worse yet, something that might be impossible to find if it’s not even there. I rather look at it as something we can come up with, something we can create from scratch. I am optimistic that together we can help media pass this hurdle.
So what is the problem we are facing? At its heart, the problem is the fact that despite putting in the same great work and producing the same quality content, the revenues in media are declining, because the economic foundations of this industry haven’t been on stable ground. The revenue wasn’t tied to the product, but a by-product.
For a long time, the actual product of media, the content, wasn’t really monetized. It was highly subsidized by a by-product that seemed to be an easier stream of revenue to harvest. That by-product is the reach that this content allowed publishers to obtain. The reach was immensely valuable for advertisers and they paid for it.
This seemed to be a great symbiotic relationship for both sides. Publishers didn’t have to convince millions of ordinary citizens to pay for content, they rather convinced a few corporations with fat wallets to advertise. The affordable prices for content that this model allowed, further helped the reach to grow hence making ads even more valuable. Everything seemed great.
The advertisers weren’t paying for the content however, they were paying for eyeballs. This shifted the incentives for content creators. Content was optimized for instincts rather than intellect. Quality suffered, journalistic integrity suffered, truth suffered.
Fast forward to the age of internet, and the disconnect between the revenue and the product started to show its fragile nature. As social platforms became a richer pool of eyeballs, the advertising budgets started to move there.
Even though convincing a few companies to pay large amounts was easier than convincing millions to pay for content, this prevented media companies from being more independent. The more things you depend on, the more independent you are. Losing an advertiser who pays 10% of your revenue is a heavier hit than losing a reader out of a million.
The subsidized nature of content brought another problem with it. The perceived value of content in the eyes of its real consumer, the reader, was highly reduced. This is making it harder now to convince people to pay for content that they are used to getting either for free or for very cheap.
What we need is a model where the success of a media company is tied directly to its output. What we want is for better content to mean higher revenues and when the revenue is declining it’s not just destiny but it is certain that increased quality will bring increased revenue with it.
A world where media is truly independent, independent from advertisers, independent from governments and independent from investors, solely depending on its consumers, will be a peaceful world where knowledge is abundant and democracy is thriving.