August 12, 2016
As those of you who watch John Oliver already know, old media is failing to adapt to the online world. Traditional media lost roughly 30 billion in print over the period between 2004 and 2014 while earning just 2 billion more in digital media over the same period. But they have an escape plan: Invest in the upstart competition.
Old Media Is Already On a Buying Spree
Most recently, online publisher Refinery29 pulled in $45 million with a funding round led by Turner. Today, news broke that Univision is looking to purchase Gawker Media, though the unique circumstances surrounding the purchase differentiate that deal from the other equity investments in question. The phenomenon is best described by Bernard Gershon, president of GershonMedia, in a Digiday article on the topic:
“If you put most of these digital media startups in a bucket, their best long-term opportunity is to partner with or get bought by a traditional, established big media company. They are building real businesses, but I’m not sure many of them are going to be standalone entities five years from now.”
From the same article comes the summation that, since 2013, “the quartet of BuzzFeed, Refinery29, Vice Media and Vox Media alone have raised more than $1.6 billion from the likes of Disney, NBCUniversal, Turner and Hearst.”
Even Buying New Media Doesn’t Solve the Underlying Problem
Users simply don’t want to pay for the information they need anymore. As Nieman Lab’s Ken Doctor explains, they just aren’t used to the idea of paying:
“The truth is too many Americans now suffer — after years of local news diminution — a loss in local news muscle memory. That’s not going to be easy to rebuild. In fact, I think it requires a new bargain. Publishers willing to invest in their communities and news companies need to provide more and ask readers to pay more. I believe they will, if the bargain is fair, real, and well executed. In truth, that may be too many ifs, but I think it’s possible.”
Crowing over the old swallowing the new won’t fix the root issue. Media, new or old, will need to figure out a new revenue system in order to survive.
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