New business models for media
The bandwidth of the “infinite pipe” is now great enough to usher out the Mass Media Era and the business models it supported.
Ask most people why newspapers have fallen so far in the last few years, and they’ll say, “The Internet.” And they’ll be right, in a simplistic sort of way.
But let’s look closer. What’s really happening is that the lopsided old “mass media” information system — a few providers sending limited amounts of information to huge audiences — is now being engulfed and dwarfed by an information system that is truly “mass” on both ends — sending and receiving.
Call it the Internet, but it’s really this: The end of the Mass Media Era and the dawn of the Infinite Media Era.
As the Infinite Media Era advances, virtually everyone will be able to produce and distribute content at virtually no cost. The geometrically expanding global information system will be able to handle virtually any amount of content. And virtually everyone will be able to access virtually all of it.
The cause is a combination of technology and economics:
- Technology because, over the last 20 years, digital technologies have rapidly multiplied the amount of information that can be moved electronically and multiplied the number and kinds of devices that can access this information.
- Economics because the costs of both information bandwidth and information devices have spiraled steeply downward.
And both trends will continue for the foreseeable future.
The cost of moving units of information has fallen from very high in the Mass Media Era to nearly zero in the Infinite Media Era. As a direct outcome, in barely 20 years, the barriers of cost and capacity that formed and defined our global information systems have been shattered. The remaining limits are fast disappearing as digital systems gain still more speed and capacity and as digital devices penetrate every economic level and geography.
This is a change so profound that most of us, being creatures of the Mass Media Era, barely grasp its implications. Having lived in this restricted system for so long, we barely understand how its limits have determined its contents and the behaviors of its users at both ends of the pipe. And we have only begun to see how infinite bandwidth will drastically alter content and behaviors. Facebook is only a hint of what’s to come.
For humanity in total, this is a huge breakthrough. As universal access to information arrives among the populations around the globe, it will unlock vast amounts of previously restricted human potential. Give the world’s people full access to the world’s information, and huge numbers of them will rise to levels of self-actualization their parents and grandparents could barely imagine. This process will accelerate through the 21st century and beyond.
For the old mass media, however, this means hard times from now on. It’s the end of the scarcity model — the limits that both restricted them and made them hugely profitable. As the print business declines and newspaper companies try to transfer their business into the digital realm, five basic changes are working against them:
1. The mass media’s digital advertising must compete with vast inventories of low-priced space on millions of Web sites.
It’s print dollars vs. digital dimes. As John Paton of Digital First Media has often said, when the print dollars are going away, media companies have to get really good at stacking digital dimes.
2. Mass media content is now just a drop in an infinite ocean.
The digital content competition is even stiffer than the advertising competition. Now that people can get virtually any information they want, they’re shifting huge amounts of their media time away from news and other mass-media content into personally relevant information. Generic, one-size-fits-all content like news and mass entertainment, which ruled in the Mass Media Era, is now just a small part of many people’s diet. Where the action is now — for both individuals and Web companies — is in what people care about personally. This is why news alone isn’t enough to support much of a local media business model.The Top 20 Web sites in a typical Morris Communications market in the United States, ranked by number of visits from local users. Facebook has almost 20 times as many visits by people in the market.