Thread by @Noahpinion

1/I've been thinking a bit about the plight of the digital media content industry, and what might be causing it.

I think the question is probably fairly easily answerable with data, but it's not data I have...

2/Now, we shouldn't confuse the shakeout in *digital* media with the decline of news media employment *overall*. Much of the overall decline is the death of print media and the death of local news.

3/Print media is declining because reading news on the internet is just a lot easier, plus there are hyperlinks.

Also, free online classifieds destroyed one of newspapers' biggest profit centers.

These are both very important stories, but old stories...

4/The recent shakeout in digital media is something else. Digital media is what was supposed to replace print media. But recently there has been a wave of layoffs and closures.

businessinsider.com/2019-media-lay…

5/Now, one possibility is that this is just a boring old case of over-optimism and over-investment followed by retrenchment and consolidation.

If so, nothing to see here.

6/A second possibility is that the major aggregators of text content - Google and Facebook - have used their market power to squeeze content creators to death, by sucking up all their ad revenue.

cjr.org/special_report…

7/But a third possibility is that by allowing free entry into content creation, social media has commoditized digit media text content.

8/With everyone reading news off of Twitter and Facebook, an online newspaper has no comparative advantage in running AP or Reuters stories. Everyone can just get them direct from the manufacturer, so to speak.

9/As for opinion content, you can get that on any blog. Or any random Twitter feed. Maybe the opinions of some random teenager in Brazil are more interesting and insightful than those of a columnist for a prestigious newspaper!

10/That leaves long-form and investigative journalism. But what if that was always just sort of a niche product?

thenation.com/article/archiv…

11/So I see three scenarios.

The optimistic scenario: maybe digital media content will thrive after the wave of consolidation is done. The NYT, a prestige brand, seems to be thriving (sorry, Trump!). Maybe there will just be a few big winners.

thenation.com/article/archiv…

12/The middle scenario: If Google and FB are strangling digital media, then the industry can thrive only if A) the platforms realize they're killing the goose, and ease up, or B) government antitrust action smashes the dominance of the platforms.

13/The pessimistic scenario: In an age when everyone tweets news and opinions for the pure fun of it, digital media content creation is no longer an activity that can earn profit in the market.

14/It should be possible to tell which of these scenarios is unfolding, with the right data.

A) look at total digital text media ad revenue trends vs. % of revenue captured by content creators

B) analyze whether consolidations and exits raise margins at companies that remain

15/Someone has probably already done both of these things. So it should be possible to tell whether digital media content creation has any future as a profit center. I just haven't seen that data yet.

(end)