What is the Next Media Business: Here's What I Think It Is
Creators and Platform will takeover the industry
The way we discover, consume, share and pay for media are constantly changing.
From your TV to Netflix.
From your cassette & CD to Spotify.
From buying newspaper at the newstand to buying digital news subscription
The future of media is shifting to digital media for entertainment, news and business which translates to new opportunities for businesses. As the audience for digital media grow, so do the number of platforms and content creators.
In this newsletter, I will explore how platforms and content creators will dominate the new media landscape.
The Dawn of the Internet 2.0
Before internet exist, the competitive edge of media companies is they owned the distribution channel to reach the audience. To build a distribution channel requires high capital to buy equipments and setup network. This lead to a high barrier of entry for other players to come in.
After internet exist, the barrier of entry have been decreased substantially. Everyone can build and owned their distribution channel with minimal investment. You just need a phone and internet connection. The competitive advantage of traditional media companies have dissapeared. Creators do not need to rely on media companies anymore to reach their audience.
Before the internet, media business are company-centric. After the internet, it had gone several evolution.
Traditional media -> Online Publisher -> Social Media -> Platform + Creators (Today)
Today, the leverage have been shifted to creators and platforms. A creator with a phone & internet can build a channel and have a wider reach than a traditional media companies and this is happening right now.
How to adapt?
Most traditional media companies have been exploring digital media for the past decade, however they are still struggling to find their foot.
While we had made increasing investments to build our digital capabilities, it was still unclear whether we had gained sufficient traction while the losses continued to increase." - Datin Azliza, CEO of BluInc Media
source: The Star
The next media business would be controlled by platforms and creators. To adapt in this new playing field, creators should be the centre of a media company business model. It is like runnning a football club. Lets do an analogy:
creators = football player
media companies = football club
platform = leagues
creators market = transfer market
Creators will focus on what their do best: create. Platform will do what they do best: provide a platform for creators to create, distribute & monetise. Where media companies fit into this picture? As talent managers, managing content creators to create content under their brands. Platform and media companies will compete to get the best creators (players) in the market (transfer market).
Example of it happening now: Joe Rogan & Kim Kardashian (creator @ player) + Spotify (Platform @ Football Club)
By putting talent at the center of their business model, media companies are creating an entirely new business model - "Monetise the Individual" - where the value of the company is driven by the creators that they have. Platforms such as Medium and Substack are using this business model.
Who will exist in this market?
There are several players that will exist in this new market which are:
Player 1: independent creators with owned brand/channel
Player 2: media companies managing content creators & channels
Player 3: platform
Platform and media companies will fight each other to get the best creators like in the case of Joe Rogan. If I am a media company, I would sign up Joe Rogan under my company and then get a deal from Spotify for an exclusive podcast deal. (easier said than done huh...)
Locally in Malaysia, I haven't seen any of this trend is coming yet. In neighbouring country like Singapore, there have been cases like this happening.
Challenges
It is easier said than done. There 2 challenges to this business model:
1) Management
If you are going as Player 1: - independent creators with owned brand/channel, A creator have to wear both hats at the same time: as content creators and business owner. This will be a challenge as they are most of the time a one-person team juggling everything. The solution is to hire a manager to handle the business side of things, and creators focus on what they do best: create.
If you are going as player 2 and 3, this should not be a problem.
2) Monetisation
In today's media business, content value is often - no value. Consumer don't need to pay to watch video on Youtube, to read article on website. Consumer assume that content is free. Plus, there are no concrete way to put a price on a content creators content. And creators often don't know their actual worth as shown in the video below:
Traditionally, media companies main business model is advertising - TVC, Magazine Ads, Newspaper Ads, Radio and others. However, as brands are shifting their budget to digital platform ads such as Facebook Ads and Google Ads, media companies cannot rely solely on this stream anymore.
Platform such as Patreon and Substack are trying to solve this problem which allows creators to generate revenue from their audience through membership. Some creators are killing it at Patreon.
What’s Next?
Building a media company in todays environment is a constant battle. Platform and creators might be the business model today, but who know what will happen next year.
Thank you for reading until the end. If you have any idea of what would the next media business look like, please share your comment below.