Digital media is a bugle, not a barbell

I was involved in an online debate about the sale of Re/code, a tech site made prominent by its founders, Wall Street Journal star technology columnists Walt Mossberg and Kara Swisher. The gist of the argument was that if these two big-deal technology columnists had to sell out, so soon after GigaOm went out of business, what did it mean for the rest of the big tech verticals?

Maybe nothing. Matthew Ingram, who was set adrift by GigaOm’s closure then picked up by Fortune, describes online media as a barbell, where the bells are targeted, small sites and very large sites. Sites like Re/code are in the bar, the valley of death, as Ingram called it. It’s an update of the classic ‘crossing the chasm’ argument: they staffed up hoped technology’s seeming pervasiveness would attract steep growth in its audience, and it didn’t.

There was much hand-wringing in the debate over what Re/code’s failure meant for journalism. Re/code, of course, was not doing general interest reporting, but journalists like Mossberg and Swisher are exceptionally prominent for technology writers, and tech is everywhere. If they can’t scale, the argument went, who can? It was a bit like watching the journalistic parallel to Alfred Lambert (The Corrections) looking at his railroad, seeing a profession falling apart and looted when it might have been saved. But issues at Re/code and GigaOm look to me more localized.

GigaOm built a large staff over eight years and ultimately appears to have been unable to sustain it through revenues. Re/code looks like it was on the verge of doing the same. It has a staff of 39, 26 of whom are editorial. Their stories were read by 1.5 million unique visitors, which sounds large, but means little when it is people popping in to read an occasional story. Compare Re/code to its savior, Vox Media, which has 150 million unique visitors across its array of media sites. I have no doubt Mossberg and Swisher could have sustained their business with a smaller staff, though it might have been just the two of them and some support for their conference business.

Maybe they felt they needed to compete in technology news with the Journal, which in the wake of its 2013 split with Mossberg and Swisher went out and hired 20 more reporters to augment its already substantial technology staff. But the Journal has existing administrative support and a very large audience, plus subscription revenues to sustain itself.

Things may work out fine for Mossberg and Swisher and their staff; Vox bought their outfit for stock (pre-IPO, investor-set value), and it is trying to sell itself to Comcast for a rich payday (here’s a look at the weirdly incestuous connections between Vox Media, Re/code, and Comcast).

Comcast must ask itself whether Vox’s 150 million monthly visitors provide a meaningful audience. That sounds on its face naive; how could 150 million monthly visitors not mean something valuable?

Because digital media is not a barbell; it’s a bugle. There’s a very long, convoluted leadpipe filled with niche companies, flaring out into a bell. If you’re going to build an advertising-driven media business, you need to be in the bell. And that probably means getting to the scale of Twitter or Facebook.

That didn’t used to be true. In 1999, when I was at ZDNet, we were a top 15 web site, and we weren’t the biggest media site. Now look at the top 15 Web sites: Google, YouTube (owned by Google), Facebook, Yahoo, Amazon.com — the list is all search, social media, software and e-commerce. WordPress, a distribution platform, is 15th. It has 240 million unique monthly visitors.

If these top 15 Web sites comprise the bell, it means all traditional media are in the leadpipe. The leadpipe is a niche business. You can be newsletter niche, a small shop like Re/code, or The Wirecutter, or you can be super niche like The New York Times. Either way, you lack the scale to compete in a mass advertising market with the likes of Facebook. Maybe you can get people to pay you for your content, because people will pay for some types of content, among them politics (because government makes up a vast percentage of spending around the globe) and business (the subscription is a business expense). Putting politics into an economic frame is why The Economist can charge so much ($130 a year in the US). Some of the debate I was part of centered on whether Politico was stupid to set up state operations. Going in to state markets is smart; there’s an established business model that supports subscription services like the State House News Service. These can make a tidy profit. As long as Politico doesn’t overspend, if it can dislodge those that exist, it should be able to make money off going local.

We journalists have to recognize that no matter how big we are, on the Web we are in the wrong part of the bugle. If we don’t, it’s Taps for us.

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