On a recent episode of Peter Kafka’s Recode Media podcast, Peter interviewed the CEO of Simulmedia, Dave Morgan. The primary topic was the future of TV advertising, but what stood out to me was a comment he made on the subject of distribution.
Dave mentioned that, looking at the history of media (specifically newspapers in his example) it’s distribution, not content, that is king. If you know anything about media, this is a near-blasphemous statement.
Ask a content creator, of any content type, on any platform, and they will tell you, “content is king,” with the certainty that is normally reserved for religious belief or sports fanaticism. I’ve worked in media since 2001 and the phrase has been parroted as though it’s the only thing keeping the business going.
Similarly, I worked for several years with a Chief Technology officer who would remind the organization that media’s challenge is not a revenue problem, it’s a distribution problem. A sentiment that I fully bought into, and continue to believe.
Both of these concepts – distribution is king, and media has a distribution problem – are points that most pure digital organizations have figured out. The really successful ones are exploiting it.
I have a love/hate relationship with them, but look no further than Google and Facebook for proof. Neither company creates content, yet both have perfected distribution.
They’ve perfected it to the point where most people will attribute the source of their news and information to Google or Facebook. That would be like a newspaper reader claiming the source of a story in the local paper as being Joe the carrier. Joe, Google and Facebook have nothing to do with the creative process of news. They are distribution outlets for it. Nothing more.
The difference is that Joe is distributing a physical product assembled by a news-gathering organization, printed at a centralized location. All of which comes with high costs which limits Joe’s distribution field and effectiveness. Google and Facebook have no such limitations, their delivery product is digital – just a series of ones and zeroes. The only cost is bandwidth.
And not only are there no physical limitations, publishers are open to letting Google and Facebook distribute their goods for free, in exchange for a wider distribution area. Joe has a buy-sell relationship with the publisher and is limited even further due to the economic realities of the situation.
The result?
Depending on the estimate, Google and Facebook receive around 90% of all incremental digital advertising revenue. Thousands of digital media outlets fight over the remaining 10%.
But what about paid content, aren’t readers willing to pay for great content? Well, based on at least one recent study by Columbia Journalism Review, only one to two percent of online readers are willing to pay for content.
Clearly content is not king.
As a former circulation director I should have realized all of this years ago. But I didn’t. I wanted to drink the Kool-Aide and bask in the glory that is the Fourth Estate.
Unfortunately for the physical newspaper, it’s too late. Will we figure it out in digital? I’m not sure. Some days I think we will, but on most I’m convinced we’ll never let go of our antiquated belief system to figure it out.
In the meantime, I’m going to get my news from FireTV.