In the 1993 debut issue of Wired magazine, founding editor Louis Rossetto predicted that the media and other industries would be whipped like a “Bengali typhoon” by digital change. As it turns out, Rossetto underestimated the impending mayhem. The ruins of the newspaper industry, music business, and the book trade smolder beneath us, with newspaper companies selling for pennies on the dollar they commanded when Rossetto wrote. Madison Avenue and the retail industry stagger about like cattle just shot to the head with a stun bolt. If re-writing his manifesto today, Rossetto might want to compare the coming gale not to a typhoon but to the solar super-storm of 1859, which made telegraph machines spit fire, turned night into aurora-lit day, and encouraged some to think the end times had arrived.
The digital revolution has yet to turn our skies crimson, but Moore’s law and its codicils have not finished with the news media business. If you seek to identify the future victims of the digital typhoon, do what Rossetto did, and point your finger at the current incumbents. The organizations at the top — heavily invested in older technology, wedded to waning ideas, beholden to existing revenue streams, haunted by yesterday’s successes, and possessed by fantasies of invulnerability — are always the best targets.
My incumbents list includes but is not limited to the Huffington Post, Politico, Atlantic Wire (and its sister-site, Quartz), Business Insider, Bleacher Report, BuzzFeed, The Verge, and Gawker Media. All of these organizations raced from almost nothing to something big in a relative hurry. HuffPo was just six years old when it sold to AOL for $315 million in 2011. Bleacher Report, born in 2007, sold to Turner Broadcasting System for almost $200 million in 2012. As a point of comparison, the Washington Post, first published in 1877, just went to Jeff Bezos for $250 million.
Bear in mind, of course, that the Washington Post earned 25 percent margin profits for many of the 25 years it ruled news and advertising in its metropolitan market, a dominance that none of the digital outlets just mentioned will ever enjoy. Traditional media companies — newspapers, music, movies, magazines, cable, TV, radio, and even games — once resided inside “unique, noncompetitive” analog silos, as W. Russell Neuman wrote in his essential 1991 book, The Future of the Mass Audience. (I own two copies of this book, one for work and one for home, and have drawn on its wisdom again and again.) The analog nature of media made the translation of content from one format to another “an expensive, labor-intensive endeavor.” Once all media — music, movies, print, and broadcasting — started speaking the same digital language, the costs of translation and production fell, bringing down the silo barriers. For example, in the old days print, newswire, radio, and TV journalists competed indirectly across content silos, battling for the audience’s attention but largely sticking to their native mediums. But for almost two decades now, those distinctions have become arbitrary. All journalists have become digital journalists, producing text, video, and audio. You’re as likely to encounter a written story on the CBS News website as you are a video report on the Wall Street Journal‘s.
In addition to hammering the content silos, digital technology has also hammered both the barriers to and the costs of entry. In the old days, mobile TV news was gathered on film stock, developed in chemical baths, edited in a cutting room, and then projected before it could be transmitted over the air, a time-consuming, expensive proposition requiring trained technicians. No more. A modern smartphone can do all that in a flash, making any owner a potential recorder of visual news. A high school student sitting at his laptop can call down a universe of information compared to what the best New York Times reporter from 1975 could command. Cheap digital technology has also eroded the federal government’s power to regulate and license the producers of video news, a power it has long used over broadcasters. But no regulator stands between an aspiring journalist and YouTube or Vimeo or his own website because no federal agency can ration Internet bandwidth the way the Federal Communications Commission still rations the airwaves.