By Jess Goulart
Photo courtesy of Michael Mandiberg.
“TV is dead. Print is dead. Radio is dead. Outdoor is dead,” says Greg Satell, contributor to Forbes who specializes in the intersection between media, marketing, and technology.
That might be a bit of a stretch. Take printed books, for example. Amazon is reporting digital books are outselling paper books, but paper books are still widely sold on their website. If anything, the price and availability of eBooks is simply driving the cost of paper books down–that’s why bookstores are going out of business, and Amazon can’t seem to turn a profit despite soaring sales, not because books are no longer being printed. People don’t necessarily prefer digital, they prefer cheap.
Historically new technology very rarely entirely eclipses old technology. TV didn’t kill radio, and radio didn’t kill books. Instead both the mediums and our consumption of them adapt. With the digital age, the next step in media evolution is upon us.
It’s a battle for your attention between old media and new. Old media are the well-established institutions, like newspapers and TV, while new media is digital and relies on engaging the online community for consumption. By nature new media offers a platform to anybody wishing to share content, however, accessibility does not equate to visibility. Technically, yes, anybody’s content can go viral, but when you look at how much content is created with the intention of going viral, and how much actually does, it’s a nearly impossible feat. You’re chances of winning the lottery are greater than your chances of your video going viral on YouTube. Despite the odds, a trend towards the digital is apparent.
“Three or four years ago, everyone was talking about social media and the rise of the amateur. Now all of the big digital companies are trying to entice traditional media talent to come over to digital platforms. Big companies like The New York Times who aren’t adapting their business models and starting to see talent jump ship,” Satell tells BTR’s Matthew DeMello of the Third Eye Weekly podcast.
That adaptation is essential to survival in this digital age. Old media paths are currently still best for advertising, because they have proven success rates, but that paradigm is shifting rapidly.
One area where we see old media business models shifting is subscriptions. There’s a general misconception that companies like The New York Times are giving away content for free online, rather than reserving it for subscribers. While it’s true print circulation is falling rapidly nationwide, old media did not turn a profit on circulation and in fact typically took a financial hit in order to print papers.
“If you look at a monthly Glossy magazine, it usually costs about $15-20 to subscribe to it. It costs a lot more than that to print and distribute. So they’ve been subsidizing print in distribution, sometimes up to 90 percent, and the reason they do that is to get advertising. So free is actually a step up for them, at least it doesn’t cost them money.”
What old media wanted most out of subscribers was proof of visibility so that advertisers would want to buy space. With digital, they still get that proof in tracking traffic without having to shell anything out to print.
Another myth is that subscription based companies like HBO Go and Netflix are losing money on password sharing. In fact, HBO Go CEO Richard Pleper recently told the press that sharing passwords doesn’t affect their business model at all and actually helps them with visibility, a great example of an old media company adapting to a new media model. Satell postulates that HBO Go is losing money not on password sharing but because they still have to pay the cable companies a portion of their profits, unlike Netflix, that doesn’t have that constraint.
In the same way that bands won’t make money on Spotify or Bandcamp but still use them to gain fans, HBO Go might not turn a profit on their subscriptions but in today’s digital world shareability equals visibility equals advertising money. Other media filters like Upworthy craft well-researched, “old media” articles, then automatically generate thirty different headline tweets for each. Software tracks which headline is shared the most on a test margin, and then that headline is used in their social media accoounts — thus optimizing their content for going viral. This business model has made them one of the fastest growing media outlets of all times, according to Forbes.
Drawing courtesy of Sean MacEntee.
All this adaptation and competition can be summed up in one basic sentiment, that new media success is built upon the same commodity that old media success was built upon: talent. Macroeconomically, it doesn’t matter who the big players are (The New York Times, Time Warner, etc.) because the information will continue to be distributed whether they live or die, that’s the beauty of an open market.
The ones that survive will not be the ones who can prevent password sharing or stay in circulation, they will be the ones who can entice the best to come onboard–that is the ultimate business model.
For more, check out this week’s episode of the Third Eye Weekly podcast featuring Forbes contributor, Greg Satell.