New Abundances and Their Effects
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As physical limitations for how media is distributed and consumed decline, the competitive landscape changes fundamentally. In short, new abundances have turned the economics of distribution on its head.
For example, “loss-leader strategies” are inverted. (For more information about “loss-leaders,” a product sold below costs to create other sales, download Vol. 2, Chapter 4 of The Big Thaw.) Companies used to give away 1% of a product, such as perfume, to get the samplers to buy the other 99%. Now, companies such as Flickr or Skype give away 99% (often called a “freemium”) to sell 1% in the form of premium purchases. For example, Flickr Pro costs $25 per year. This flip has generated new abundances of products.
The inversion has fundamentally shifted systems of distribution by creating a new, self-reinforcing positive feedback loop in which the more you give away for free, the more you must give away for free in order to compete. Donella Meadows said that positive feedback loops, if unchecked, could become a “race to the bottom,” in which a system ultimately destroys itself. In the old paradigm, the price of creating and sharing information was a useful corrective feedback loop. A photographer, for example, limited the number of images she or he shot due to the cost of film, processing and printing.
Abundance of Information
The media-as-watchtower role worked well in a world of information scarcity. “Now there’s an abundance of everything—content, reporters reporting on it, commentators to make sense of it, and lots of ways to put it together, such as emailing links, doing a ‘Digg.’ It’s entirely about abundance,” David Weinberger explains. “The only thing that scales is the massive effort of readers doing it for themselves.”
This abundance has another effect, according to writer Nicholas Carr: “What the Internet has done is broken the geographical constraints on news distribution and flooded the market with stories, with product. Supply so far exceeds demand that the price of the news has dropped to zero.”
Of course, an abundance of content also leads to an oversupply of available advertising space, which causes ad prices to decline. At any given time, 30 to 50% of available advertising impressions can go unsold on a site, even with the help of advertising networks that efficiently reach more advertisers. Although Wenda Harris Millard, president of Martha Stewart Living Omnimedia, warned in early 2008 that companies should not sell their web inventory like “pork bellies,” publishers often need to lower their prices to compete.
Content oversupply can have similar effects on philanthropy, making it harder for content producers to raise funds. More producers are competing for limited grants, and funders can find producers willing to develop content for less. Like advertisers, foundations now have more options than ever before to direct their funds in support of the content they want to reach people, diluting both investment in—and possibly impact of—media projects.
Abundance of Independent Voices
The good and bad news are now one and the same: There are more independent voices than ever before. Within the old media structure, there were too few independent voices, but that is no longer the major problem. “Empirically there are so many, many, many, ways for alternative voices to emerge. For instance, the Al Jazeera Twitter feed is going strong with the war in Gaza with a fairly large following,” Clay Shirky says.
Despite talk of reaching niche audiences, it would be silly to believe that any independent media producer wants to reach just 12 people—unless that group is the President’s cabinet. The growing ease of “few-to-few” communication is valuable in many ways, but information usually must reach a large-scale audience to have power. Scale is hard to control with many fragmented voices, which makes it more challenging for any one content-producing organization to sustain itself. While the emergence of many new, independent voices may represent the future we have been waiting for, it also might threaten the existence of organizations whose value was largely based on their “independence” from large commercial media companies. Katrin Verclas, co-founder of MobileActive, contends that in 10 years, media organizations are not going to look the same. “I don’t think there will be such a thing as independent media anymore in terms of organizational structure.” Even if such organizations do not disappear altogether, the abundance of independent voices will inevitably change the form they take.
This blog is an excerpt from The Big Thaw, a guide to the evolution of independent media, written by Tony Deifell of Q Media Labs and produced by The Media Consortium, a network of leading independent media outlets. Learn how your organization can use this report. For more information and recommendations from the study, click here.
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