Here are my ten digital media rules of the road.
1. There is a vast amount of liquidity (read funding, read money) for digital media start-ups and reboots now. Do you go to Crackle, Pluto or The Outline? I could name ten more. Yes, the investing cycle has slowed a bit recently. But for now there is beaucoup $$$$.
2. Which means: PnLs (profit and loss statements) don’t matter much. These new companies want scale first, then they look to monetize. That has huge implications if you are a customer, competitor, advertiser or employee.
3. Which means: Content hasn’t peaked. There will be more and more and more. If you are in the business, you need to keep track. Overwhelming.
4. Which means: Atomization of media will keep on keepin’ on. Remember the long tail? People kind of forgot about it, but it is now blossoming with a vengeance—and getting more powerful. A-million-little-media-sites-each-with-their-own-audience kind of thing.
5. Which means: Scale audiences are more important than ever (he said self-servingly as the EIC of Yahoo Finance, but it’s true.). Getting this divided nation to all watch something, like the Super Bowl, for instance, is really, really hard.
6. Which really means: You have a barbell effect. Small companies or endeavors with low overhead on one end and scale endeavors on the other. You don’t want to be in the middle. In other words, be special, be scale or go home. Or if you really want to kick it, be scale and special. Like a Beyoncé tour.
7. Also: Platforms—like Facebook and Snapchat—have almost unlimited scale. Media companies much less so. That’s why in business news, for instance, you see properties like the Wall Street Journal and Business Insider morphing into general news sites.
8. Also: There is a blending of platforms and media. Of course Facebook is partly a media company. It’s simply a new kind of media company. (No one wants to be called a media company at the expense of being a social media company, by the way, for two reasons. One, media companies have more responsibility. Two, media companies have lower valuations.) But I learned back in my high school newspaper days at the Bethesda-Chevy Chase Tattler, that you are responsible for all content that appears in your paper or platform. (Our lesson was ad copy for a head shop.) Reader’s Digest got sued for content, and it was just an aggregator. Facebook is figuring all this out.
9. Also: Sustainability is an issue. Not just for the old brands like the New York Times and Sports Illustrated, but the Politicos and Buzzfeeds too. How much more secure is the future of the latter versus the former? What’s the endgame for the new companies? What’s to stop new ventures using new technology to come and usurp them? Not much.
10. Finally: Beware the acceleration of technological change and commoditization. I was noodling around with Taboola and Outbrain the other day and I wondered, ‘What are these two companies going to be doing five years from now?’ Maybe taking over the world. Maybe acquired. Maybe dead. I have no idea. But one thing I know for sure: There’s no more ‘set it and forget it’ in this business.