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Newspapers used to have margins of 40% or more - as high as Facebook!
In the absence of Google and Facebook, would digital media content companies be profitable? How much of their decline is due platform monopoly power?
nytimes.com/2019/01/30/opi…
In the absence of Google and Facebook, would digital media content companies be profitable? How much of their decline is due platform monopoly power?
nytimes.com/2019/01/30/opi…
If Facebook disappeared, it seems like digital media content companies would just see their traffic decrease, as has apparently happened somewhat already due to changes in how Facebook's news feed works: motherjones.com/media/2018/12/…
Ultimately, digital media content companies are competing with A) each other, and B) all the free stuff on the internet that can grab people's eyeballs, like cat videos on Twitter.
If FB and Google vaporized, I'm not sure that basic equation would be altered.
If FB and Google vaporized, I'm not sure that basic equation would be altered.
And even putting that aside, the huge fat margins newspapers used to make seem like they're gone forever. Free online classified ads were a game-changer.
If you could make a law that some how forced FB and Google to keep existing as quasi-monopolies AND keep funneling traffic to digital media sites AND to give them a much larger cut of the ad revenue, seems like you might be able to partially resuscitate huge newspaper margins...
But A) that's not going to happen, and B) you'd just get a ton of new entrants into the digital media content space, competing away the margins after a little while, and C) you'd still be competing with free cat videos on Twitter.
I just don't see how the digital media shakeout can be laid at Facebook and Google's feet here. It seems like it's about deeper, unstoppable trends in technology, and FB and Google are just taking advantage of those trends to make a little money on the way down.
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