For the last few pieces of the year, I’m going to explore 2024 storylines for the media industry. To start: the ugly end to the platform-publisher relationship.
Before I get to that, a quick reminder to check out the recent report The Rebooting did in collaboration with BlueConic about the state of publisher subscriptions. Without a doubt, the weight of the publishing industry has shifted from advertising as a bulwark of business models to subscriptions. That adjustment is both profound and messy, as publishers reorient to be consumer-focused businesses and learn to integrate their various revenue streams into a single coherent strategy.
A publisher told me of a fascinating negotiation recently: The publisher was in discussions with a tech giant that is readying the release of its own large-language model to license its corpus of content for under $5 million. In the short term, this would provide a tantalizing revenue infusion after a rough year at this business, and most consumer publishing businesses.
Such payments would put pressure on other competing LLMs to CTC (cut the check), as 2024 looks to become the year when the acrimonious marriage of publishers and giant tech platforms heads for a divorce. Consider:
- The drumbeats continue for regulatory
capturerelief. Australia and Canada have provided a blueprint for publishers to turn to relief from governments. Google and Facebook have pulled back on its journalism-support programs because they didn’t work. They cut the checks, didn’t feel like they got much in return for those cocktail parties at Campbell Brown’s apartment.
- Silicon Valley and news are in a culture war. Elon Musk is representative of a constituency within tech that sees The Media as enemies. I used to believe this was mostly posturing; I’ve now decided to take this crowd literally and seriously. The e-acc vs decel civil war will lead to the development of a parallel tech-friendly media ecosystem to serve as a counterweight to the perceived bias of The Media. The tech platforms have moved on to AI; publishing in general and news in particular is a nuisance
- The traffic currency is devalued. Tech platforms and publishers had imperfectly aligned interests. Google and Facebook controlled distribution through search and social media, getting free access to professional content to keep people engaged and fuel their big ad businesses. In return, publishers got lots of traffic they could monetize. That’s going away already, with about half as much traffic coming to publishers from social media in the span of three years. ChatGPT and infusion of AI in search will accelerate the decline in search referrals.
- The scale model is over. It’s hard to find a publisher outside of an arb chop shop that’s seriously yoking its business model to the good graces of platforms. BuzzFeed’s own publisher admitted that the entire premise of publishers amassing large audiences off the back of platforms was fatally flawed. “The value of distributed-only audiences, has been rapidly diminishing, and now it’s approaching zero, and some might argue that its value is in fact negative,” Dao Nguyen wrote in a departure note. The coming tsunami of crap won’t improve the outlook. I can’t think of a publisher who still believes in this approach that was until quite recently believed to be the future. Publishers will instead focus on what Hearst’s Bridget Williams calls “controllable audience” through newsletters and direct traffic.
- Advertising is out of favor. The digital ad market is undergoing vast structural changes from ad targeting restrictions that mostly serve to benefit non-content publishers with vast stores of data to be applied to digital ads. The rise of retail media will serve to erode even more the share publishers reap from the digital ad market. Advertiser block lists make ad-funded news an uneconomic activity. Even a traffic juggernaut like The Daily Mail, which unlike most publishers commands enviable direct traffic, is exploring subscription models. Publishers would rather be in the ad agency business than rely on making money from display ads on webpages.
Divorces are reliably messy, and the publisher-platform relationship was fraught from the start. There will always be ties between publishers and tech platforms, of course, but publishers will need to forge an independent path to gaining control over their businesses. Too many years were wasted moaning about how unfair it all was. There will be ham-handed attempts to “leverage AI” that are ripped out of the playbooks of the past, but more examples will merge of smaller but more durable publishing business models
Racquet’s struggles: Racquet is an elevated take on a sports magazine, focusing as much on the cultural aspects of tennis than who is set to dominate the next stop. It struck me – yes, I know – as an ideal fit for an agency services model that uses the media as the front for what’s in essence a marketing services business. But as always, media is an execution business – the good ideas are all well known – and the more-with-less era prioritizes both discipline and sequencing growth. (Defector)
Web3 media returns: If you thought the Bored Apes meant the end of Web3 talk, think again. The yearlong run-up in crypto prices means web3 will inevitably get new momentum. Decrypt, one of the leading chroniclers of crypto, is merging with “decentralized media” company Rug Radio to form a new entity that’s devoted to finding crypto-native business models for content – and yes, a token is involved. (Axios)
Deprioritizing ads: The writing is on the wall for media business models that rely primarily on display advertising. For conservative media — Carlson is a veteran of advertiser “boycotts” — the shift is all the more pronounced. Tucker Carlson is launching his new media company with subscriptions at the center, charing $72 a year for “founding members.” (WSJ)
Stepping off the career treadmill: “It took getting run over to figure out that I was making myself deeply unhappy. I was never satisfied. I had set myself up so that I could never, really, succeed. Because every time I succeeded, I found a way to sabotage that success, to suggest that it was less than it actually was. That someone had more success, and therefore, in the zero-sum game way I looked at the world, I must have less success.” (Chris Cillizza)
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