One of my greatest disappointments with the past ten years in the digital sphere has been the absence of the creation of something that is immense. The eighties saw the growth and evolution of computing in the personal sphere, the nineties saw the evolution of the internet. But, over a decade into the new millenium, we have nothing to show more than refined versions of what has already been put into place. What I did not realize was that we may just be in the midst of experiencing something that is immense, but that something may not be a particular technology or a product. That something is only what a bunch of technologies or products enable us to do with information.
The past 15-years has been a frantic, often unpredictable, ride for the publishing business. What, even 20-years-ago, was the domain of the few has exploded into a creature so different that everyone who reads or write anything these days are still struggling to grasp the enormity and the meaning of the changes that are affecting it. The existing rules regarding who, why and what gets published is being shred to bits and new rules are being made up every day. All parts of the trade — writing, editing, distribution and consumption — are so drastically different from two-decades ago. This is disruption on a scale seldom experienced before.
Death of many gatekeepers
Content is now created on so many platforms – blogs, tweets, personal websites, photo sharing sites; content is now distributed over so many channels – email, social networking sites, content aggregators; content is now consumed over so many channels – browsers, desktop applications, mobile applications, email. What used to be a strictly linear process (create -> distribute -> consume) is now something that is best described as being similar to Brownian motion. What used to be predictable in most cases is vastly unpredictable now. In this brave new world almost everyone is a participant and nobody is a real gatekeeper anymore.
In a pre-internet world there existed clear definitions regarding producers/writers, distributors and consumers of content. Content could be only a handful of things; books, articles in newspapers and magazines. Only a handful of people were either allowed or enabled to create this content and there were clear rules regarding membership into this select club. This content was consumed over clearly defined channels like books, news publications and magazines. If you could not access any of these channels, what you wrote had little value as nobody could consume it. Consumers of content had no other available option, but to be reliant on the established channels.
The scenario now is so very different. Almost anyone is now a creator of content. And by anyone I mean anyone. For a long time now, I have held that there is no social media. There are only creators, distributors and consumers of media/content. Comments, tweets, mashups, curated lists – all these are as much content as any form of reporting or long form writing. Of course, all comments, tweets and mashups are not the same quality as all reporting out there, but it is also true that all reporting is not really all that great. Yes, it is jarring to see slang, SMS-language and badly written text in things I read, but that does not make it any less useful or informative compared to established publications.
This has serious implications for the old guard. Gatekeepers, in any ecosystem, wield tremendous power. This power is accrued from predictability, reach and resources. Publications are valued because they publish to a predictable schedule, with a quality that is predictable, with topics that are predictable. Publications are valued based on the number of people they can reach. Publications are also valued based on their ability to cover topics; some cover a large number of topics at a shallow level; some cover fewer topics at a far deeper level. The new world of content and publishing has attacked each and every source of power of the gatekeepers.
Implications on the present
The first implication of this is on pricing. Ability-driven scarcity has been one of the key factors in enabling publications to charge what they used to charge. Since the information they publish is no longer scare, that rug has been firmly pulled out from underneath their feet. Almost every new old-school style publication that has attempted to charge a premium in recent years has tried to based it on opinion or exclusivity than attempting to do it over information. The businesses based on pushing information like in the old ages will survive as long as digital reach continues to exhibit the current constrained growth and the lack of understanding and translating key businesses metrics in digital remain. But it is an inescapable fact that such businesses are living on borrowed time.
In 2004, I remember telling my boss at that time that we need to pro-actively plan for a world where we can’t control the form factor or context in which information published by us will appear. In 2012, I consume most of the content I read and view now from my Twitter timeline, Hacker News and Google News. There are very few instances where I consume content from homepages of publications. I had previously tackled this topic in 2010 and the risk to brands and publications on this front continue to only grow with time. Brands and publications that ignore this threat will pay a big price in the coming years.
It would be the greatest lie if I were to tell you that I know exactly how this is going develop and what the future of publishing will look like. Currently, content anywhere is one of the bleakest businesses to be in at scale, while it is one of the easiest to bootstrap and hit Ramen profitability, should you choose to put your mind to it. Nearly non-existent entry barriers (domain registration & basic web hosting) and a preponderance of Ramen profitability creates an illusion of stellar prospects for the domain, but the actual outlook at scale is really dire. It is rare to find successful large-scale digital/non-digital publications that are in the black. The risks in being involved in the domain with any sort of significant investment on either side of the table is significantly high.
For existing publishers, the way forward is to measure everything and understand the numbers and your core audience very well. Monetization strategies will continue to be unpredictable for many years to come. That you are pulling good revenue is now not a guarantee of the same in anything other than the immediate term. Audience funnels and goals need to be set and tracked as a core operational metric. The industry still has an excessive reliance on gross numbers that does not differentiate in value between customer A and customer B. If you can’t make that differentiation, it is only natural that you can’t monetize better.
For investors, at least in India, publishing is a no-go territory for any fund that probably has a size in excess of $100 million. There is no scale in the business at this point which will allow for returns that justify the investment. Even established players have been demonstrating flat or slow growth in revenue (no point talking profitability) over the past three-years. Even that growth is impacted by increasing operating costs that have not slowed down in the same years. Valuation, based on potential, can be easily ignored here. Exits are rare and at a level that makes no sense for anyone other than the founders and some form of relief for early stage investors. There are way too many shackles that make any attempted disruption too costly.
For the consumers, publishing is a lovely place to be at right now. Both quality and quantity has grown in content that is available for consumption. The growth is quantity has also led to the emergence of aggregators and curators. They used to play an important role in the early web as consequence of nearly non-existent means of searching the web with its limited content at that time (problems of discovery and scarcity of content), now they play an important role because of the excess of content that is available for consumption. Things will only get better for them. These are the true winners in this game.