The Media Is Changing — Take Advantage Of It
This is the second of a three-part series articulating exactly how we see the world of media and why Ridge Point was started. Part one can be found here.
History doesn’t exactly repeat itself, but it often follows patterns. Catching the pattern is better than memorizing the events.
We’re in the middle of shifting tides in the news and media businesses. The media is characterized by three main waves surrounding every dominant medium. In the online world, we’re moving from the second to the third wave.
Where We’re Coming From
Information has become commoditized and available to the masses. At the same time, this has created the “cost of free” problem. The cost of free is the problem that comes about in a product due to incentives and changes in how the market operates.
This problem with free is clearly illustrated in how the media has evolved in the last 20 years or so, but mainly in the ten years following 2008.
Author Ryan Holiday detailed this problem in his 2012 book, Trust Me, I’m Lying: Confessions of a Media Manipulator where he details the incentives of the online media world, blogs, and the problems they create.
He argues, quite convincingly, that the media world follows three waves.
The First Wave: A New Medium
The first wave is when a new technology enters the arena and starts to change the dominant medium for how people consume news and entertainment. This was seen with the advent of the printing press and the start of newspapers becoming distributed to the masses. It follows the same pattern the online world went through from roughly the turn of the century until 2010 or so. A new, superior, medium emerged where news and entertainment could be distributed to the masses. Other mediums stagnated and fell into decline with a superior way to get information to the masses.
The Second Wave: Commoditization
The second wave is a disaster. It comes about due to commoditization. During the first phase, the supply of news and entertainment is less than the demand for it. In the second phase, outlets face more competition and the supply of news and entertainment begins to outweigh the demand for it and new incentives emerge.
This is seen in the explosion of information and news available online over the last 20 years. Things have changed in the way news is produced as well. In the early days of the internet websites and bandwidth were expensive. Creating a website or outlet and producing content was constrained to the traditional media outlets and large corporations. Today, absolutely anyone can create a website, blog, or social media account and publish content online.
Are Loaded Question Headlines Popular?
The explosion of freely available content is good in many ways. You can now learn nearly anything online and get information from across the world in the blink of an eye. It’s easy to stay informed if you have the time. But this also gives rise to the one-off problem that comes about under the dominant model of news and entertainment being completely free to anyone.
Publishers and content creators rely on advertising to generate revenue. After all, online publishing is still a business. Publishers get paid by how many impressions they generate, which has given rise to what everyone has experienced: clickbait.
Because of the business model and the incentives built into the model, publishers pursue clicks and attention at all costs. This is why you see sensational headlines for the most mundane of stories and coverage that barely passes as news. Economists love to say that incentives matter, and it’s true.
A Quick History Lesson
Looking back at the rise of newspapers you see the same pattern we see online today being played out. Competition among newspapers became stronger as newspapers became more widely available, and all publishers were using the one-off model. They would sell single issues on street corners- incentivizing them to employ the same tactics we see in online publishing today, sensationalized headlines and lower quality journalism, anything to get the next sale.
Indeed if you compare headlines from newspapers around the turn of the nineteenth century with those we see all the time as clickbait, you’d be hard-pressed to know the difference.
Some of our favorites from the late 1800’s include:
- WAR WILL BE DECLARED IN FIFTEEN MINUTES
- COULDN’T SELL HIS EAR, OLD MAN SHOOTS HIMSELF
- OWL FRIGHTENS WOMAN TO DEATH IN HOSPITAL
The incentives of the media industry matter. They have a big impact on the end product we as consumers get stuck with.
Eventually, after some time in the second wave of the one-off model, consumers get fed up with clickbait and demand better journalism. Usually, one or a select few move to a subscription model as the New York Times did with the newspaper industry at the end of the 19th century. Enter the subscription model.
The Third Wave: Changing Business Models
We’re now entering the third wave of media. This is marked by the changing of business models and how media is distributed. Instead of taking part in the second wave, the one-off problem, outlets begin to implement a subscription model, changing the incentives around how media is produced.
The New York Times was one of the first to implement this in 2011, with others slowly beginning to follow suit. The one-off problem slowly gives way to better information and reporting. Reputation becomes more important than notoriety.
All this, until a new medium comes along. It looks like voice may be the next version through podcasts, flash briefings, and long-form Youtube videos.
What To Do With This
Reputation and trust are more important than ever online. The one-off problem isn’t solved, but it is losing ground. The same basic principles of the internet apply. Anyone can reach anyone, anytime, and information is infinitely scalable. Information is now being distributed by the masses, for the masses.
Building a following online isn’t easy, but it’s more realistic than ever before. Create high-quality information, assets, and trust will be built over time. It’s not the type of thing that makes for an easy or immediate return on investment calculation, but the rewards are well worth the cost.
There’s never been a better time to be a creator, as long as you’re riding the third wave and building trust, not exploiting the one-off problem. Google, Facebook, and numerous other platforms are measuring trust and credibility like never before. Play to these strengths and you will be rewarded.
Start creating and the third wave is yours.
Originally published at https://ridgepoint.co on December 2, 2019.
