WSJ has an opinion article on media’s challenge to adapting to the forces putting more power in the hands of consumers.
Media Moguls and Creative Destruction
Competition works to the benefit of consumers, not producers.
By L. GORDON CROVITZ
For media, this is the best of times and the worst. The best because the cost to publish news, make a video or distribute a song has never been lower. But also the worst because it's hard to find a company, new or old media, that has emerged with a sustainable business model. Consumers are left wondering how much longer their favorite sources of news and entertainment will be around.
The most recent stark contrast was between the $1 billion valuation for pre-revenue startup Twitter and the shutdown of the iconic Gourmet magazine. A new book provocatively entitled "The Curse of the Mogul: What's Wrong with the World's Leading Media Companies" explains how digital technology has undermined almost all media and why this creative destruction is set to continue.
The book, by investment banker Jonathan Knee and business strategists Bruce Greenwald and Ava Seave, details the dismal performance of almost all large media companies going back to the 1990s. It documents how and why the Internet wasn't the hoped-for savior of newspapers, magazines or broadcasters, and why almost all digital media executives have also found it hard to build companies that last.
The benefactors of this competition has been the data center market.
We should keep in mind that people are consuming more media than ever, all day and in real time through many new outlets. Content creators from musicians to authors can sidestep the middlemen who were once required to package and deliver the content. This means that as consumers, we have unprecedented choice in many areas.
Media companies also have options. They can become more efficient, find new revenue streams from their most engaged consumers, and add new services.
Still, no one knows which brands will survive in a world where the traditional advantages are the new disadvantages and where so many new-media companies don't survive the pace of change they helped accelerate. The challenge for all media—old and new—is the same, even if the difficulty level is higher than ever before: Focus on what makes each brand different and more valuable than the ever-increasing number of alternatives that technology makes inevitable.
How many media companies own big rooms with printing presses that dwarf their data centers?
The media have gone through periods of disruption before—from the development of the telegraph, telephone, radio and then television, but never at this pace. "Sometimes differences in degree become differences in kind," Mr. Knee says. "Never has there been this much fundamental change across so many sectors in such a short period of time." Moreover, the former competitive advantages of printing presses and unique access to large audiences have become costly liabilities.