Send in the Clowns
Is media becoming a feature of everything else?
Welcome to People vs Algorithms 24.
I look for patterns in media, business and culture. My POV is informed by 30 years of leadership in media and advertising businesses, most recently as global President of Hearst Magazines, one of the largest publishers in the world.
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Close of a chapter
JFK airport is busy again. The Palm restaurant recently reopened. So have the Victoria Secret and Hugo Boss stores, though people rarely seem to go in. I’ve never really understood shopping for clothing at the airport. But it's good to know they are there should you need something.
Throughout the terminal, overhead monitors repeat ads for streaming services, as if beckoning travelers back from the real world: “We are glad you are out again but don’t stray too far from the screens, we have a lot more good stuff for you. Commercial free. Remember, Covid is not quite over yet.”
As I was boarding the plane it struck me that the endless ad barrage signaled the final act of a time-based media world, and the earnest beginning of total on-demand. With the change will come much displacement and new structural realities.
I looked forward to watching a movie on the plane, or as a friend calls it, the last remaining movie theater.
I stumbled upon a term this week from the prolific and wildly-popular Columbia academic Adam Tooze, author of the Substack, Chartbook and fresh off a NY Mag cover profile. He uses the term fin-fi, short for finance fiction, to describe the practice of speculating on the future shape of the world economy and financial system. Adam made me wonder why we don’t use the term me-fi, or media fiction more often. We certainly engage in it. Let’s do a little.
First, like many of you I found the news over the past couple of weeks tragic and overwhelming and surreal as always. A few of the things that stood out as I write:
CNN debuts newsertainment streaming service;
Global family entertainment company targeted by home-base governor for woke values;
Meme-king Musk takes material position in Twitter and board seat… and challenges global leader to fist fight;
World’s biggest retailer closes on world’s greatest spy franchise, 007;
PC makerPhone maker wins Oscar;
Star slaps comedian for bad joke in front of world;
Former Ukrainian comedian pleads for support for war-ravaged country on music award show;
Wife of supreme court justice involved in conspiracy to overthrow government;
$600M of not so make-believe money vanishes from gaming site.
Now I desperately tried to pull a thread through all of this and only landed on something that others like Trump and Elon and Kanye seemingly discovered long ago, in no discernable order: 1) We all love a good story; 2) Now that we spend 50% or more of our lives in front of screens, the line between real and story continues to blur; 3) You can be a character and a person 4) Virtual reality is not the thing, it's actually the virtualization of reality that really matters. In this mediated reality, it's getting harder to draw lines between truth and fiction, art and life, actors and real humans, news and entertainment. Except when people die, which tragically is what is happening now.
I watched a terrific episode of Vice’s “Dark Side Of The 90’s” which got me thinking that this is where we started to go off the rails. Blame Jerry Springer, once the most popular day time show on television and the birth place of a strange entertainment reality vortex where truth, fiction, violence and depravity meet.
Not your parents organizing principle
It’s clarifying to think about media as a pyramid with the organizing principle (OP) as foundation, underneath content format and monetization. OP defines the mode and rules of access. One might call it distribution but distribution seems one way and mechanical. OP is the way we access and interact with content, the way it fits into our lives. It sits at the bottom of the pyramid because it shapes the format of content and how, in turn, content becomes money.
The primary OP for video media was time-based and looked like this:
Here we watched the TV, not the show. We used a time-based interface to structure consumption. Segmentation was channels and day parts — we watched HGTV or ESPN, we tuned in Thursday nights. Programming architectures were built around a 30 second commercial currency, standardized and tradeable. An entire downstream advertising economy understood the rules and paid up. Access was controlled by monopolistic cable operators. The structure was stable and very, very profitable for everyone. TV was TV and we went to the movies for a different kind of entertainment experience, free of commercials, more ambitious in production and storytelling, rendered across a big-screen in high fidelity.
Then the OP changed. On-demand meant content providers could deliver a product directly to consumers, over the internet. Time and channel no longer constrained what and how much was produced. Netflix disrupted the market by flooding the zone with content, first licensed then self-produced. The price was reasonable, especially because there were no commercials. Seasons were replaced by drops. Programming could go deeper, more niché and global. The line between movies and TV eroded. Time became irrelevant. Consumers became their own programmers. Cable segments were replaced by algorithms.
Amazing to think it started with DVDs by mail.
The pressure on time-based delivery systems mirrors pressure in print ten years ago. One might think that digital was just a distribution alternative — take stories from one distribution platform (print) and redirect them the digital. Nothing could be further from the truth.
The print business was characterized by a few things that all went out the window when digital came along: 1) Stable distribution structure; 2) Slow moving, single-format content created by editorial teams with arms length reader relationship; 3) High cost of entry and resulting oligopolistic industry structure; 4) Sensible native ad product with premium media mechanics.
In short, good times.
You don’t need a play by play on what happened next, other than to say the opposite of what I just wrote above — digital media became a competitive catfight, old orthodoxies were thrown out the window, once vibrant formats withered, and new winners emerged.
The streaming wars follow the same dynamic, with a notable difference that the the cost structures exponentially larger, along with the stakes, creating a much smaller set of competitors. But the process of building a direct to consumer business, competing for attention and distribution position in an open system mirrors shifts in print precisely.
CNN straddles old and new
In video, news and sports are the last to change for a ton of reasons, too complex to deconstruct here. Big sports need mass distribution and are encumbered by enormous, long term contractual obligations and complex ad sales efforts. News suits a linear framework. Local news takes local operations and ad sales. Both will take longer to reconstruct.
But step by step there are being reconstituted. Thursday night football moved to Amazon, Apple is bringing doubleheader baseball to Friday nights. And this week saw the debut of CNN+. It’s been interesting to see the shape CNN takes when it moves on-demand.
News is now newsertainment. Anderson Cooper takes a break from reporting on the ground in Ukraine and hosts a show about parenting. Our favorite pundit and pop-prof media celeb, Scott Galloway, doing his best to channel Anthony Bourdain, offers a video rendering of his popular newsletter and podcast, “Now Mercy No Malice”. Jake Tapper has a book club. Audie Cornish asks 20 questions. Alison Roman (love her) makes food! We used to watch CNN for the news. Content is reshaped by OP.
As an aside, below is Barry Diller, the king media pundit filling a slot on Brian Selter’s now daily and obviously content-hungry media analysis show, “Reliable Sources”. He was checking in from the jet and it was kind of surreal and modern. Barry thinks all of this change pretty much kills the theater-going experience permanently. I agree. At least we still have planes. Damn jet WiFi.
What is clear is the profit and structural dynamics are shifting quickly. Outsized cable profits are evaporating into increased programming investment and mounting customer acquisition costs.
And maybe something more fundamental.
Media is a feature
I keep coming back to something that I think Ryan Broderick said, now everything is downstream from content, which is perhaps another way of saying what I said above — that the stories that surround us, they now comprise a 360 degree, fully immersive virtualized reality that is more than just media, it becomes an interface to everything. Our stories are our reality.
Last week a smart reader made the comment that media is becoming a just a feature to non-media service offerings. This struck me as an interesting idea, suggesting that media is becoming less of a business unto itself and more of an appendage to other things. Like media is a just a product feature for Apple. It sits next to free delivery on a list of benefits that come along with your Amazon Prime membership. Facebook would love to have more media as a feature, but media keeps making trouble for Facebook. Stories are a feature of Snap’s core communication offering. One might argue media is a feature to Disney, a storytelling selling interface to stuffed animals and theme parks tickets and cruise lines. Roku is an interface to content but is now investing heavily in content to defend its interface. Podcasts are a feature to Spotify. Is media a feature of Food52’s ecommerce offering or is ecommerce a feature of it’s media offering?
And to connect the ideas above, as competitive protections afforded by the cable bundle erode, as media becomes more important as the front end to everything, it will naturally move closer to other sources of revenue who depend on it at the margin. Media becomes a feature of something else, not the business itself. This might even explain Elon and Twitter.
The counter point is a telco (AT&T) tried to make media a feature and it didn’t work so well. Before that a dial up service (AOL) tried to make media a feature. Both rank among the largest failed mergers of all time. Media people are difficult. But clearly the synthesis is not impossible.
One has to wonder if new media organizing principles are to blame for much of the insanity we see in the world, or just a reflection of cyclical / generational turmoil. I don’t know. Adam Tooze might. What I do know is that direct and on-demand is changing everything — the economics, once clear lines between entertainment types, and the future of media as industry category independent from non-media revenue sources. Connectivity between content and commerce — and soon blockchain enabled connection between content, money and assets — are the next things that will change its shape and ownership.
Just like how affiliate revenue changed lifestyle content, and led to a little media company with a big wallet and efficient model (DotDash) taking over a big media company that was slow to change (Meredith). And how sports betting will slowly reshape sports media.
We don’t need to make a clumsy VR headset to make this virtualization come to life. It’s already here.
Send in the clowns.
Have a great weekend…/ Troy
Links like they used to make ‘em:
1. Dystopian new subway gear: Dyson unveils headphones with air purifier.
2. Love me a good expectation setter. I would like to be paid like a plumber. Steve Albini lays out terms of engagement to produce Nirvana’s final album.
3. A meditation on dust and how to clean. DTC Vacuum for millenials and you.
4. The discontents of TikTok “cougar bait,” from Input Mag: “I’ve seen women say they’d eat his snot when he had a cold, and I’ve even seen women say they’d lose the light in their lives if he left the internet…”
5. New rendering technology shows promising results for NBA. From the Verge:
Built with Canon’s Free-Viewpoint Video tech, it uses 110 data capturing cameras placed around the court to carefully track player movement. Then it combines that data in real-time with 3D models that have been built of each player, and renders it, very similar to how things would work while you’re playing NBA 2K. That creates the ability for virtual camera operators to show off the action from any angle they want to, as virtual cameras swoop around the floor like drones
6. More terrific hybrid storytelling from NYT: “Why we can’t quit the guitar solo.”
8. How car companies invented J-walking and chased humans off the road.
And… when there’s no one around: