If you sit around listening to some industry insiders whine, you’d think there’s no hope for the digital media business. However, people continue to be attracted to it as a business and as a calling, and if you look at the numbers, many publications aren’t doing badly. Even Gawker, forced into bankruptcy and out of business by Peter Thiel’s lawsuits, says its business was up 7 or 8% this year. Business, said beleaguered Nick Denton, is good. Gawker.com may be gone, but its 6 sister sites are doing fine under Univision. Other niche publications, like Thrillist, are also doing well.
According to Thrillist founder and VC Ben Lerer, who appeared on the Digiday podcast, there are many short term threats facing digital content companies. The keyword here is short term, which is how Lerer looks at ad blocking, the decline of effective display advertising, and the hegemony of Facebook. He swipes those common industry concerns away with a flick of the wrist, preferring to focus on what he calls “the massive change in distribution” that has happened because of online media, which he thinks is already making some people rich even as others suffer.
It’s like the 1980s when cable TV first started, he says. Cable TV allowed finer audience targeting than network TV, and provided gigantic opportunities for content creators who understood the needs of their niche audiences.
“The pipes are different,” he said. “It’s not as clean and easy a story, but it’s similar to where there was a large handful of companies that figured out how to make content for those pipes, there’s now an opportunity to make content for these new distributed pipes. The traditional TV companies, who you’d think would be are fundamentally not built to be the guys who win today because of the sheer infrastructure they’ve built to do something that’s not what they need to do in the future. It’s created an opportunity for a new breed of media company. There’s no question there’s a decline coming to television. Those companies are not built for shrinking.”
Lerer thinks the greatest changes in digital media aren’t coming on the publisher side, but on the agency side, where traditional agencies have built a cost structure based on shooting expensive 30-second spots for TV that will now be replaced by native ads on mobile. Those ads will be made by the publishers themselves, perhaps using their existing editorial staffs or through in-house agencies operating with a Chinese wall.
Lerer is not the only publisher who thinks good content will win the new distribution game, whether on Facebook, Snapchat or a publishers’ own site. Brian Lam, founder of tech review site “The Wirecutter” and former writer for Wired says that media companies without a mission will crash and burn.
Of his proposed expansion into the fashion vertical, Lam says “we’re not going to do it because it’s a business opportunity. We’re going to do it because we think we can be helpful, and there’s also a business opportunity. The business serves what we’re trying to build.”