I have been wanting to say this for a while and there is no better time than now. And that is : Most Media Companies will die a slow death, a painful death. We are witnessing the beginning of the end of the “News Media” as we know it.
Let’s take a look back first
“News” originated in newspapers that were sold in units long back.Like before TV.When newspapers were sold in units without a subscription, it had to be sensational.
“WAR is coming” as a headline usually sold more of these units it evoked an emotional response in the potential readers and they bought it. MORE SENSATION EQUALS MORE SALES.
News became better and of higher quality when publications like The New York Times started selling subscriptions.When a newspaper is sold as a subscription, the headline doesn’t need to sell the unit of the news.
News was sold as a subscription via magazines and newspapers for a long time. It was good. No sensation and no shallow, shocking, angry news. Good journalism is supposed to be deep and thought-provoking
Then we got the TV. When TV channels are free to watch in most of the cases (apart from paying for the cable), the only way to monetize the content is ads.
And the only way ads will pay is when ads get more impressions.
The only way to get more impressions is to get more people to watch. And the only way to get more people to watch is to deliver sensational news which doesn’t have depth. The internet is an extension of the TV.
But Now what’s happening?
But now News is now back to selling by the unit. Not even by the set of pages like a newspaper but based on single pages hosted on the web. More page views = more ad revenue. But to get more page views – you need to have clickbait, anger, shock, sensation. Junk.
The model of monetizing the content is at the root of the shallow journalism we have today. Publications and channels are forced to do ANYTHING to get more views. And this is a bottomless pit. Ad blindness is on the rise. Ad revenues are falling.
That’s why news media which depends on display ads will eventually die a slow and painful death. They will live and die by the page view. There are no two ways about it. We are already seeing reputed publications that have been around for decades having to run shady ads.
The ads we see today on reputed publications…
Weight loss pills. Hearing Aids. Real-estate and… Bangalore mom makes 3 lakhs a month scams.
Why? Because they have to keep the offices going. The writers need to be paid.
News organizations that produce content for a living will not survive in the long term. Long back, when we had TV, Radio, Newspapers, and Magazines, there was no internet and there was no content marketing.
They existed because running a content channel was a complex business in itself. They had the reach and the audience. So businesses who wanted to reach customers paid the media companies to reach their potential customers – often with very high inefficiency. The ads were not well-targeted, not useful, not relevant and it was an interruption for the content consumer.
“Content creation costs money. Content gets attention. If the content has to pay for itself, the attention needs to be monetized. When the attention is monetized by ads, it is not enough. So the quality of the content goes down.”
But gone are the days where you can attract attention to your brand only through paid advertising on media channels. You can now create and distribute your own content. That means you can become your own media company within 5 minutes. All it takes is some effort in creating content for your customers and publishing it on a blog.
The media companies until now have been the middlemen between brands and consumers. And as we all know, in the Internet age, the middle man is being cut out because both the parties in the ecosystem can connect with each other directly on a platform.
A digital platform becomes the middleman.
In the case of content, Google is the middleman who connects end customers and businesses with content and information. Airbnb is the middleman who connects people who have living spaces and people who are looking for living spaces. Uber is the middleman who connects passengers with cab drivers.
Before the age of Google, the media companies were able to reach customers not through a search engine but through a content channel. The content channel attracted end customers and the media companies interrupted them by showing ads of the businesses that funded their content creation in the first place. But here the content creation is funded by other companies’ ads which the end customers do not like because it is interrupting their content consumption.
“When a brand creates content, the readers and the buyers are the same. When a media company creates content, the readers and the buyers are different.
That’s why content for a brand is a better way to publish than a media company. Coz the latter have to please the advertisers.”
If a business does content marketing then it is delivering content that is useful for its end customers and doesn’t need to monetize the content with paid ads because the content is monetized by building their brand and selling their own products and services that is extremely relevant to the content and the audience.
Media companies do not have a product. Their product is content which is given for free, or almost for free. And then they charge advertisers. A media company’s content channel is a platform that subsidizes one side of the equation (readers) and charges the other side (advertisers). But brands and companies (aka advertisers) no longer need that platform because they can now create their own content platform and reach their customers via content. (Like I am reaching you right now).
Like Adobe created CMO.com – a content channel made to attract marketers and brand managers. They publish content about productivity, data, design, IT and so on that will attract their potential customers to their brand. Instead of advertising Adobe on another media channel, they have created their own media channel and they are spending money on content creation which pulls in people. This is inbound marketing at it’s best.
If you advertise your content instead of your products then your advertising will build trust with your audience and your content marketing strategy will be on steroids. That’s what I am trying to do.
You see the difference here?
Media companies will die because media companies do not have a product that they can sell and profit. Instead of converting the people who media companies have attracted to their content into customers, they are forced to sell their soul to other advertisers who will pay for their content creation by sponsoring their content. (As in paying for advertising).
“In the age of brands becoming media companies to sell their products and services, it is high time that media companies come up with their own products and services instead of depending on advertising income from sponsors.”
That’s why Google is a genius because Google just helps people find content but doesn’t create the content by itself.
Publications who monetize their content creation with ads will die because now brands can become publishers and monetize their content creation with the sales of their own products and services. And when you sell a product that has high margins, you can invest all the profits in content creation instead of ads and you will put in place a compounding effect.
Digital Education is a highly profitable business with very high margins. That’s why most of the online education companies do not advertise their premium content on other channels. They do their own content marketing. Free blogs, free courses, free e-books, and so on become their best way to convert prospects into customers. Free content drives paid content sales. It’s the Freemium model similar to SaaS.
SaaS products and digital products that help businesses are also high-profit margin business because there is no cost of replication (almost). Most of the SaaS companies out there struggle to invest in paid advertising and content marketing in the initial days because they do not have enough revenue to invest in content marketing. A percentage of profits or revenue has to be taken from the sales of the software products and they have to be invested in content creation and production.
“The purpose of advertising is to get attention. The purpose of marketing is to build trust and the purpose of sales is to nudge the prospect towards the transaction. Getting customers is an art as well as science.“
I have a feeling that the largest publication in the world will be the largest education company in the world and the largest software company in the world will be the largest education company in the world.
By the time people discover amazing content and then buy the education products, the investment in the creation of the content will be paid back with the sales of the education products. And now you have a huge list of customers who are ready to buy from you again. If you sell software to them, you are selling with zero CAC (cost per customer acquisition).
They say that the business that can spend the most to acquire the customer wins. I would beg to differ. I would say that the business that can get customers for free, forever, will win. Software companies, instead of trying to develop software and then advertise that software, should try content marketing and reach customers through their content. And if they can pay for their content creation by selling premium content to the same audience, then they will not have to pay anything to acquire customers for their product.
An SEO company selling SEO software can do good content marketing in terms of blogging and video creation related to SEO topics to attract customers. However, they would be limited by the amount of investment they can do in content marketing because the money comes from the sales of the SEO software.
Instead, an SEO company should first create content related to SEO, then sell an SEO course, break-even with the cost of content creation, paid advertising for boosting the content, delivering the SEO course, and then sell SEO software. This would be the perfect funnel for a software company because this funnel would literally get customers for free. And yeah, add a freemium model within the software as well which would boost things even more.
Free content fuels the audience into paid content. Paid content fuels more audience into free content. All the audience is fueled into a free version of the software, which fuels the free content and the paid content even more. And eventually, everything is fueled into the paid version of the software. This is the ultimate funnel.
“It is time for good content to be born again. And this time, the audience will be ready to pay for it. And when the audience pays for it, the people who create content can relax, go deep, and create content with a smile on their face.“
That’s all for now.
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