The following column has been created for Barrett Media by Seth Resler. To learn more about Seth and his company, Community Marketing Revolution, go here.
There are two types of companies in the media space: Those that will survive, and those that won’t. But how can you tell one from the other?
There have been layoffs in the radio industry in recent years, which have led many to conclude that there is a problem in the industry. But there is no radio industry problem.
It’s tempting to look at the demise of newspapers over the last decade and conclude that there is a newspaper problem. But there is no newspaper problem.
You could be forgiven for watching television studios struggle to make the transition from cable subscriptions to streaming and concluding that there is a television industry problem. But there is no TV industry problem.
It’s easy to look at the way that movies have struggled to sell tickets since the strikes and conclude that there is a Hollywood problem. But there is no Hollywood problem.
These are not different challenges faced by separate industries; they are all facets of a single enormous issue: A media industry problem.
There were over 21,000 media jobs lost last year, with 2024 looking to be similarly bleak. In February, The New Yorker asked, ”Is The Media Prepared For An Extinction-Level Event?”
In a landscape of dwindling financial returns, encroaching tech giants and an increasingly fragmented digital market, only radical reinvention can help ensure survival and success.
At its core, the problem is simple: There is too much content competing for a finite amount of attention.
We’ve known for years that the internet would have a profound impact on the media business. But we failed to understand the key change that the internet would unleash on the industry. Most of us — maybe all of us — assumed that the internet was fundamentally about a change in the way content is delivered. Just as we migrated from delivering audio from AM to FM spectrums, we must now migrate from FM to streaming. Similarly, just as television stations went from delivering their content from the airwaves to fiver-optic cable, they would now need to deliver it through streaming services.
We assumed that all we had to do is figure out how to deliver content digitally and everything would work out just fine. So most media companies leaped headfirst into digital distribution without a fully-realized plan for revenue generation. Newspapers published their articles online; radio companies started streaming; and television studios built OTT apps.
But it hasn’t worked.
And to the surprise of many, it’s not just traditional media companies that have failed. Even digital-first companies like BuzzFeed, Vice, and Gawker, which were launched with digital distribution at their core and none of the baggage of legacy media outlets, ultimately collapsed.
That’s because we all got it wrong. Yes, the internet certainly gave rise to digital distribution, but that’s not the Big Change.
No, the Big Change is this: While it was once prohibitively expensive and very difficult to create and deliver content to a mass audience, now anybody with a smartphone can do it. We’re all content creators now. The media industry’s barrier to entry has been obliterated.
There are two types of companies in the media industry space. Let’s call the first, ‘Mo Money’. When more people create more content, these companies make more profits. They include Alphabet (with Google and YouTube), Meta (with Facebook and Instagram), Apple (which builds hardware designed for the creation and consumption of content), TikTok, and others. These are Tech companies, and their business models depend upon an abundance of content.
Let’s call the second group of companies in the media space ‘Mo Problems’. These companies suffer when there are more people creating more content. That’s because it creates more competition for their core products. These companies include Disney, Paramount, and Warner Bros. Discovery, along with every other radio, television, and print media company. Digital-first media companies, such as BuzzFeed, also fall into this category. These companies all have business models that depend on a scarcity of content.
It does not matter whether your company has a business model that involves selling tickets to its content, inserting ads next to its content, or asking consumers for donations to support its content. All of these business models assume a world where content is scarce.
We no longer live in a world where content is scarce.
Companies with a business model that relies on this false assumption have three options:
First, they can continue to rely on the same flawed revenue model. Their revenues will continue to dwindle, regardless of whether they distribute their content through new digital channels. Inevitably, they will go out of business.
Second, they can switch to a revenue model is built around an abundance of content. This means that they must transform from a media company to a tech company. Few, if any, media companies have the resources and expertise to make this transition, but some will try.
The third option is to create a new revenue model that is based around a scarce commodity — a commodity that isn’t content. But what scarce commodity could local media outlets successfully build their businesses around?
I’ll give you a hint: The answer can be found in a new documentary called Join or Die. The film is based on the work of Dr. Robert Putnam, a Harvard professor of Public Policy and the author of a book called Bowling Alone.
You can watch the trailer for the film here:
Paragon has arranged for special at-home screenings of Join or Die for public media broadcasters, along with a virtual panel discussion about how public media might apply these concepts.
While the event has been designed with public media broadcasters in mind, there will be a lot that commercial broadcasters can learn from the discussion, so I won’t tell anybody if you want to sneak in.
We’re calling the event Beyond the Broadcast,” and you can get all the details here.
I hope you’ll join me for this conversation, as we explore ideas for a new revenue model for media companies–one that enables them to not just survive, but to thrive.
