The media is in a state of upheaval. 2015 was a stormy year, and signs indicate that 2016 will be even more turbulent.
Last month brought the news that Al Jazeera America will shut down, that Facebook multimillionaire Chris Hughes is throwing in the towel on his ill-fated attempt to bring the New Republic into a more digital frame of mind, and that Quartz may be seeking a buyer.
Last year, we saw the demise (and subsequent resurrection under new ownership) of GigaOm and The Bold Italic. Nobody was happy about Verizon buying up AOL. Re/Code sold to Vox Media in an exit that few saw as a success. About the only spots of bright news in the media were Business Insider’s $200 million sale to Axel Springer and, now, rumors that Mashable might be in talks to sell itself for $300 million — both handsome exits but also indications of ongoing consolidation.
Through all this M&A activity, it’s not clear that the fundamentals have changed much. So much of media is available for free that consumers are not willing to pay for it unless it delivers tremendous perceived value — and they’re increasingly impatient with advertising, especially in the form that it takes online. These things have been true for a decade. Yet many publishers continue whistling in the dark, as though it was still 1995.
It’s time to get wise. Here’s what anyone publishing media needs to know in 2016.
1. The news business is toughest in the middle.
News is a tough, tough business, made ever harder by shrinking rates for advertising and the massive amounts of competition. In tech news, the battle is especially fierce, and you have to hustle hard every day just to stay relevant, as my former colleagues at VentureBeat know well. Not that we were unusual: Tech reporters everywhere are busting their asses to get the news out fast, and have been doing so for years.
The problem is, even with all the hustle, the underlying business is not a particularly good one for most publications — a fact that was masked for a few years by the large amounts of venture capital pouring into tech media publishers. As that VC money dries up or runs out, the actual business models will become clearer. In most cases, it won’t be pretty.
The best chances of survival will go to the giants, who are big enough to command enormous audiences and build their own networks of advertisers, and the midgets, who can find and nurture a tiny, valuable niche. The Information charges $400 a year to deliver a few, well-selected, very informative stories a day. Pando Daily charges for access to extremely lengthy, opinionated insider stories about the startup ecosystem. Small markets, both of them, but probably defensible. They won’t ever turn into media empires and are unlikely to generate VC-worthy returns, but you can make a good small business out of a well-focused media property.
The trouble comes when you try to build a fast- or even medium-growth business on a medium-sized audience. Ad networks and programmatic buying keep pushing ad revenues downward, while ad blockers cut into the margins even more. Competition is fierce, and there are so many alternatives for mid-tier news sites that it’s difficult or impossible to convince readers to pay for information. I don’t see any good alternative business models emerging this year. If anything, it will only get tougher, as ad budgets get squeezed by an overall contraction in the tech industry. That means, unfortunately, everyone caught between giant and tiny is going to run into trouble.
2. Video is powerful but capricious.
I love video. Video is engaging, immersive, and emotionally powerful. There’s a reason TV and Hollywood still make billions of dollars. There’s a reason people “Netflix and chill” but they don’t “TechCrunch and chill.” But it’s difficult to pull off. Producing quality video is both more expensive and more challenging than most people recognize, if they haven’t done it before. And there’s a certain mysterious magic to it — it’s not easy to define a formula for success. Viewers are fickle and unpredictable, and even high-quality videos don’t always find a big audience. Some standouts: The WSJ’s digital team has been producing some outstanding videos with Joanna Stern, and The Verge does great product videos.
3. Podcasts can be surprisingly effective.
Like video, audio can be very powerful. It’s an intimate medium, where the words literally go into the listener’s ears. It’s also compatible with commute-time listening on trains or in cars, and podcasts have made possible an incredible flowering of audio alternatives, far beyond what radio could ever have done.
Lately, it may seem as though podcasting has been undergoing a bit of a resurgence. In reality, it has been there all along, slowly growing, but it took a few breakout successes to bring podcasting back into the popular eye. Last year’s Serial was a surprise hit. Marc Maron got the president to sit down for an interview — in Marc’s garage! And business podcasts like the a16z podcast are doing surprisingly well. I also think Slack’s “Variety Pack” podcast shows a lot of promise: It’s diced up into bite-sized, shareable chunks, making it easier to digest than a traditional full-length podcast.
But like video, podcasts can be unpredictable. It’s hard to know what makes one take off and another fail to gain traction. I should know: I’ve done both kinds.
4. Infographics are dead. Charts and visualizations live on.
Nobody really wants your big, vertical-format, cutesy graphics that don’t tell much of a story and have your logo at the bottom.
But give us some data, attractively presented as a clever interactive visualization? Now you’re talking. Heck, I can even get excited about a simple bar graph or pie chart, if the underlying data is interesting.
Data-driven stories are especially powerful if augmented by visual presentations. And charts and visualizations can be made into shareable assets, which can help extend the reach for their stories.
5. Content published by companies will continue to grow.
Just because news organizations are struggling doesn’t mean the need for news — or information — goes away. People still want to learn about the world. People will still be looking for information about products and services. And companies will still want to tell the world about their products.
That’s why there’s such a boom in content marketing in tech: Tech companies have increasingly realized that they can reach customers by publishing their own stories.
It doesn’t always work. There’s a lot of me-too publishing going on, too much focus on SEO and short-term customer acquisition, and not nearly enough attention to quality. Too much of it is obnoxiously self-serving. Some companies and VCs have already experimented with hiring editorial people out of the ranks of journalism, only to let them go after it becomes clear the experiment didn’t work. But the overall trend is not going away. If anything, companies will be publishing more and more in 2016.
Think of it this way: If you have a marketing budget of, say, $100,000, would you blow that on a single prime time commercial? Or would you rather build your own mini media company, fund it for a year, and create your own audience?
6. Distribution is way more important than anyone thinks.
“If you build it, they will come.” This only works in the movies. In real life, building an audience is the hard part. That’s why I think the word “media” is often more useful than “content,” because the word implies a focus on the means of distribution, not just the ideas it contains.
You think the value of a newspaper lies in the information it publishes? Guess again. Sometimes that information has great value. But in most cases the value of a publication stems from the audience it has built, and the medium on which it reaches that audience.
Publishers of all kinds need to devote attention to building and cultivating an audience. Buzzfeed understands this (in fact, it is the insight on which Buzzfeed was founded). That means more than just publishing content and waiting for people to find it. You have to actively build and feed that audience.
7. Quality media will continue to pay off — eventually.
In the end, there will be a flight to quality. Most readers are savvy enough to smell out marketing or advertising, no matter if it’s concealed as “native advertising” or advertorial. Many have gotten disgusted enough with excessive advertising that they’ve turned to ad blockers to rescue some scraps of usability.
The problem is that so much of this advertising and marketing is just crap. It’s intrusive, it’s ugly, it interrupts, and it’s deceptive. And sometimes it’s just badly written and badly presented.
I believe readers are smart enough to know that many publications depend on advertising, and they’re willing to put up with the ads if the ads are tastefully and respectfully presented — or if the ads themselves are interesting. Look at a copy of Vogue if you want to see what good advertising looks like in print. But if publications can’t find a way to make their ads more acceptable, they’ll have to find alternatives. One possibility is shown by The Wirecutter: Outstanding reviews of the very best gear, with a business model based on a moderate amount of advertising and affiliate links. And Wirecutter is doing quite well.
As I mentioned above, the path will be very, very challenging for many publishers in 2016. The business of the media is in trouble. But to survive in the long term, the old principles still apply: Be useful, be entertaining, be honest — and don’t be a tool.
