There is sheer and absolute panic in the media markets these days. We have industry veterans advocating a switch in online content distribution from the free model to the subscription model like it is a panacea for all ailments and everyone is rushing about trying to increase rack rates. To all this hectic activity, there is only thing I can say: stop, take a deep breath and try and think long term than short term.
It is rather ironic to see all this activity at this very stage. For years the media has sat on its haunches while the internet and other factors steadily changed the way information is created, distributed and consumed in the world. Now, after the horse has bolted (and also taken barn along with it), they think effecting the above-mentioned changes will somehow magically set things right.
Let me break it for everyone, it just won't do much to help things.
I have previously written at length on the matter and I will link to it than repeat myself:
- Saving Indian Media: Part I – The Internet
- Saving Indian Media: Part II – Print
- Future of Media and other related thoughts
- Note to print media: Fire your sales team ASAP
- Enabling Paid Content on the Internet via ISPs
- Why Six Sigma fails to work in media
- Long live the deadwood edition
- Internet in India: The upcoming third wave
- Dude, who stole my page views?
Such seismic shifts in creation, distribution and consumption don't happen overnight. They happen right under our noses, in plain daylight and the industry leaders would have seen it if they had cared enough to observe and adapt. In looking to milk money out of the consumers of content, most of the leadership wind up asking the wrong question “how do we charge?” than asking the right question of “why would the user pay?”
The content business is broken beyond redemption in two ways, which will mean that the fancy dreams of being able to charge won't work out. It costs just way too much at this point in time to create non-unique content. To make matters even worse, creating unique content is not only even more expensive, but it is also something that very few have the talent or capability to pull off at this point in time. Traditional media has over time specialized in non-unique content, but when it comes to unique content it is the new publishers (bloggers and others) who have excelled in it.
Thus, for the media companies to try and attempt doing specialized unique content will mean they will get their cost structure, which is already tied up in a big knot, tied up into an even bigger knot. It is nothing short of a conundrum. To improve coverage, they need to cover less to trade quantity for quality. But doing that will make them irrelevant in the current news scenario. And we still have not answered the question regarding why would the user pay for any of this content anyway?
But it is not all gloom and doom alone out there. There are people in leadership positions who are trying to address the problem before it gets entirely out of control and wipes a significant part of the industry out. In his recent memo, detailing Hearst's 100-day plan, Steven Swartz (president of Hearst Newspapers) points out that the issue is not one of audience, but of a flawed business model and rampant inefficiency. You should read the memo in full, it is a very interesting read.
Another interesting development is the move by NYTCo to go hyperlocal (something I'd suggested earlier) with the local blogs, though I think that Outside.in would have been a better fit there. It would have also saved the company quite a bit of time they would now spend learning what Outside.in has already learnt. The 'we-will-do-it-inhouse-because-we-can' has led to a lot of strategic faux pas previously in the media, getting the companies invested way too deep into areas they have no business getting into at that level. We will have to wait and watch how this plays out.
In conclusion, this is the deal. That what has taken years to get to this stage won't get fixed overnight and desperation is really a bad guiding principle to make any kind of changes. Most of the hectic activity we are seeing now don't have any long-term view or strategy. If these measures were to not succeed (which is very likely, in my opinion), it will end up wiping out even the few strengths these companies are left with. Hopefully, they know something that I don't.