The Future of Media
I had the pleasure of being invited to a New Media dinner at Strauss Zelnick’s apartment in New York. It was a fantastic opportunity to reconnect with old Internet friends and to meet a slew of interesting characters. Jason Hirschhorn formerly from Sling Media was easily the funniest person in the room and made quite an impression with his stories, humor and impertinent yet astute commentary.
After the dinner, we all partook in a discussion on the future of media moderated by David Remnick from the New Yorker. The discussion ranged far and wide from Fred Wilson’s “There is no truth, I only want to read what the masses are thinking” to a few journalists from the New York Times and the Wall Street Journal vehemently defending the value of investigative journalism. Jason reminded us of the fantastic Epic video that emerged a few years ago where Google caused the demise of the New York Times which at the end became a newsletter for the elite.
There is no denying that the newspapers are under threat as they have never been before. They are facing increasing competition on the distribution side from the Internet while classified advertising and print advertising revenues are going away. Newspapers represent 3% of media consumption and 17% of advertising revenues while the Internet represents 20% of media consumption and 5% of advertising revenues. It’s not hard to imagine those shares of advertising revenues inversing.
Given the threat to the very existence of newspapers, many voices emerged defending the public value of the big brand newspapers, especially the New York Times, the Washington Post and the Wall Street Journal. While their best days may be behind them economically speaking, I am actually not worried about the survival of these newspapers. Their business model significantly worsened, but it does not mean they will go away. Airlines provide a nationally critical service.
The industry as a whole has not been profitable over its entire history, yet they manage to survive. The same will be true of newspapers, even if it takes a few billionaires subsidizing them during the transition period.
There definitely seems to be a market for well written and researched papers and magazines. The Economist is currently increasing its readership and the Wall Street Journal is doing relatively well. One could even argue that the demise of local papers will strengthen the large brands.
It’s hard to tell where the media world will end up 25 years in the future. As someone pointed out, 10 years ago AOL had half the Internet and Infoseek, Alta Vista, Lycos and Geocities were the talk of the town.
There is no doubt the transition will be painful, but I am convinced there is a market for well researched reporting and I can’t wait to see how it all pans out!
I think that the Old Media companies really should go back to Strategy 101: What are your competitive advantages over the Internet and how can you leverage them better?
1. Portability: Be the source for content when I am not in front of my computer. Unfortunately, the huge foldout format that most newspapers cling to is inconvenient and messy. Although the capital investment might be painful, I would love to see them move their content to a smaller format that’s easier to read at the gym, on the train, etc. Part of the reason the free metropolitan dailies have been picking up so much marketshare is that they’re just easier to hold and turn the pages of on the subway.
2. Comprehensive interest: The internet is great for searching out specific articles or columns, but if I am really interested in 90% of the articles in a magazine, the magazine’s website isn’t very browsable. I can’t be sure I’m getting to all the content by scrolling under category headings, whereas if I’m reading a newspaper or magazine cover-to-cover I can. Big headliner articles are great, but I can easily see them when I go to your homepage (or when they get reposted on my favorite blog). Publications such as The Economist, on the other hand, do a great job of breaking up their content into smaller mini-articles, where each is newsworthy and interesting enough that I want to read the whole publication every week, rather than just seeing the highlights on their website.
3. Multiple media (in the other sense of the word): On the internet, advertising has become pretty standardized – banner ads on top, sometimes placed within the article, but still flat and easy for me to ignore. In physical publications, there are opportunities for advertisers to stand out using thicker paper stock, scents, materials glued to the page, etc.
4. NOT news!: Let’s face it – I update cnn.com on my Blackberry every time I’m walking between meetings. I don’t need the New York Times to tell me about an important world event when it arrives on my doorstep the next day – the internet is real-time. The internet has made archaic the first-to-the-scene mentality of breaking a story. Instead media outlets should try to leverage insightful post-event analysis and connection with larger trends (again, I cite the Economist as a great example) in order to push people to read all about it.
Gak. I personally can not wait for the day that the NY Times or LA Times files for bankruptcy. I think the dilution of their informative eco space is such that this bankruptcy is highly likely.
Regarding the airlines: This is a levitation magic act I can not understand yet. Any ideas how it happens? There has to be a detail or two unadvertised for this to function.