At one time, it was thought that the publishing world’s embrace of social media and content marketing might save it from near-certain extinction. But, judging from the recent tsunami of layoffs washing over the new media world, it’s only natural to question whether content is really still king. If “content is king,” why then are we seeing so many layoffs in the publishing world?
Just consider some of the big-name media properties that have recently announced layoffs:
BuzzFeed
Chicago Tribune
Condé Nast
ESPN
Huffington Post
Mashable
Vice
Aol/Yahoo
Bloomberg
A paradigm shift for content providers
That would seem to suggest that we may be in the midst of a paradigm shift. For more than 20 years, “content is king” has been an accepted maxim in the Internet world. Most famously, Microsoft’s Bill Gates wrote a much-publicized essay back in 1996 in which he proclaimed content king. And that aphorism of “content is king” has been picked up by each successive wave of Internet marketers ever since, most notably by SEO marketers and content marketers. The key to success, they have always said, is more content and better content.
Which bring us to where we are today – an Internet brimming over with content. Everywhere you look, people are generating content, whether it’s blog posts, YouTube videos, e-books, or social media posts. Brands are thinking like publishers, further adding to the content over-supply problem. Who, exactly, has time to read all this?
The economics of content
If you think of the content conundrum purely in economic terms, you can start to see why we’ve reached this point. This is a classic supply-demand problem. At one time, the supply of content was relatively scarce – you had a few TV networks, a few national newspapers, and some local media publications. With scarcity comes pricing power, which is why people were willing to plunk down $100 a year or more in magazine and newspaper subscriptions.
But, along came the Internet, and the supply of content is no longer scarce. And, as long as content is not scarce, the value of content will decline. That’s just basic Economics 101. (It’s the same reason stores often discount items – they have too much inventory in stock, and need to offer huge discounts to move it all)
The problem is that if we continue along the same trajectory, we may soon be reaching a point in which the value of content plummets all the way to zero. If content is worth zero, then it’s clear why media companies are going to keep cutting staff – they simply aren’t generating economic value.
But what about Netflix?
The plummeting value of content is certain concerning, but it’s not necessarily the case that all industries are seeing the same problems with content. Think of Netflix and other streaming video platforms like Hulu. They are literally spending billions of dollars each year on new, original content. The Netflix budget for new content in 2017 was reportedly $6 billion! So, obviously, Netflix thinks content is still king. As long as Netflix is cranking out blockbuster new shows like “Stranger Things,” it will continue to make money and invest in new content.
If content isn’t king, what is?
So what’s next? You could see other players in the Internet ecosystem begin to flex their muscles. For example, if “content” isn’t king, maybe “distribution” is the new king. That would suggest that the big Internet Service Providers – think Comcast, Verizon and Charter – might become the new kings of the Internet world. After all, don’t they control the most fundamental form of distribution today – the very wires that bring the Internet into your home or workplace?
If you consider what the big cable companies have been doing with Net Neutrality recently, then this argument actually makes a lot of sense. These cable companies view themselves as the new feudal lords, with companies like Netflix as their lowly vassals, forced to pay tribute each month in order to use their Internet networks to make money.
New business models on the way
Another scenario, of course, is that all the New Media companies currently dealing with layoffs will finally wake up and come up with a new business model that actually makes sense – perhaps one that puts consumers and not advertisers in the middle of it. For example, there have been some suggestions that the traditional online advertising model might be supplanted with something radically new, such as a new business model based around decentralized networks and the blockchain.
So keep an eye on the proliferating number of companies that are embracing the blockchain for their users. This could be more than just a clever PR move – it might actually be the start of something very new for the world of Internet content. It might even mean the return of the king.