There’s a Digital Media Crash, But No One Will Say It

It's the inevitable come-down from over-inflating digital media start-ups in the post great recession era.

The business is mostly a terrible one with mediocre margins, vast competition and audiences that are fickle. There is also no real moat, other than extremely deep pockets (which can help sustain a journalistic advantage through ups and downs in the business). Content like that is almost like food when it comes to dealing with consumers. With very modest margins, tons of competition and fickle consumers, digital media start-ups aren't too different from restaurants in their likely-to-die rate.

Venture capitalists love to invest into them because they all picture themselves as media barrons. You see the rich person getting into news / media syndrome as a trend that carries throughout time. They all want to do it: Jeff Bezos, Warren Buffett, Steve Jobs (he was fascinated with Murdoch & news in general), Patrick Soon-Shiong, Chris Hughes, Peter Barbey, Laurene Powell Jobs, Viktor Vekselberg, Carlos Slim, Michael Bloomberg, Sheldon Adelson, John Henry, Sidney Harmon, Joe Mansueto, Mortimer Zuckerman and on and on the list goes.

For every rich person that does get into it, there are a dozen more that flirt with doing so.

Rich people constantly trying to get into news / media, is the equivalent of average people trying to start restaurants, with predictable results.

There is a perception in right wing circles that this is also related to trumpism, after all this crash is happening with the stock market at an all time high. A lot of these publications are at the 'progressive' end of the spectrum and they may have misread the market, even for their core readers.

Specifically the media (and in particular digital media's) response seems to have been one of all out activism against him may be working against them. People don't explicitly want to be told what to believe. Or listen to people drone on for over a year about the same stories (rightly or wrongly - but at some point it ceases to be news).

Absolutely this. Rich people have routinely purchased or put up news outlets to promote their agendas for ages.

The difference these days is that content can be copied and distributed at zero cost, and that content (and money-making advertising) can also be targeted, monitored, and tuned. It’s a propagandist’s dream.

The problem is that people still only have 24 hours in a day. Most of it is spent sleeping and working. There’s only so much information people will actively consume, which gives way to passive binge consumption of the likes of Netflix and Reddit. The latter has so much user-created or recirculated material that a potentially valuable set of eyeballs to a publisher could instead be spending their free time mindlessly clicking through a series of amusing sloth gifs.

All of this leads to a race to the bottom amidst diminishing returns, both for the publisher and the reader. The Washington Post, for example, is flooded with redundancy for the sake of anti-Trump catharsis clicks.

There is one silver lining for the owners behind the media glut: people have less spending money than they used to for entertainment, so free or cheap stimulation from the likes of non-or-bypassable paywalled news sources or Netflix does give publishers something resembling a captive audience.

Because the broader economy has been doing well, and that hides problems. Like Warren Buffet said, it's only when the tide goes out that you see who is swimming naked.

Perhaps one of the reasons that a lot of the struggling media outlets are on the progressive end of the spectrum is that they mostly need to be profitable through advertising whereas the conservative side can be run at a loss while their backers recoup their investments through deregulation and tax cuts. If someone could figure out a similar way to profit from Democratic government, that could solve most of the funding problems for those progressive media outlets.