Especially as post-pandemic problems pile up, many media companies blame the Internet giants as the cause of all their troubles. Of course, almost nobody blames their own short-sightedness in ignoring the foreseeable opportunities and threats of the network.
At the turn of the century, I witnessed the birth of the Napster revolution. It was magical, and the energy behind it merged two trends that would dominate the Internet in the future: network effects and the insurgency of the people against the established order.
Thus began a two-decades-long erosion of the biggest barriers to entry in the media business — distribution and excessive pricing power of the media companies. In everything from music, video, news, and magazines, people and their networks have upended the entrenched interests.
Many of us confuse media companies as creators of media and content. In reality, their barrier to entry was ownership of distribution platforms. Just as telecoms of the past maintained their near-monopoly by controlling the last mile of the network, the media companies maintained their money machine by controlling the distribution network: trucks, radio waves, and television frequencies. The arrival of cable loosened their grip, but not as much. Then came the Internet, which meant the distribution network was no longer under control of a select few.
Me writing in 2011. Old Media is being unbundled, like telecom
It started with upstarts like CNet setting up shop. It increased momentum with bloggers like myself, who went into business for themselves. The velocity increased with the Huffington Posts of the world, but eventually, we ended up at the point of people-powered media and their mediums: Twitter, Instagram, and Facebook. You can see the same story arc in other types of content.
Students embraced Napster, not because they were born criminals. Instead, they just didn’t care much for the business models of record labels.
And the people trading files were pissed at the record companies. They did studies back then. Labels were some of the most hated entities extant, down there with cable companies. People were sick and tired of paying ten-plus bucks for a CD with one good track. The labels thought they were winning, by eliminating the single, but they were wrong.
Bob Lefsetz, Politics Today
The eventual emergence of Spotify and streaming music has led to the resurgence of the music industry revenues. We see similar behaviors in video streaming. And yet, there is a holdout — the news industry is behaving as if nothing has changed and is defiantly delaying attempts to adapt its business models.
The news industry is still set up as a business as if I’m going to get my news the way I did in the 70s. And how are they going to convince me to do this? A paywall. The price for reading the article that’s caught my eye is to give them my credit card and the right to charge me $10 per month for perpetuity. No. The answer is no. Always no.
Dave Winer, News Has Been Unbundled
Dave makes a very good point. I would like to pay for more content, but I don’t want to sign up for more subscriptions for publications that aren’t my daily reads. I spend roughly $100 a month on various publications. I would be willing to add another $25 a month, but only for articles I actually want to read. I had high hopes for Apple News, but that has been a mess from day one. I hope Tony Haile’s Scroll gets traction, because it is on the right path. As Winer says:
I’ve read so many stories about how news orgs feel about their role, maybe it’s time for the news orgs to try to find out how their readers see their roles? Basic business. Know the people who pay your bills and do things that delight them.