Media Meltdown

Back in 2002, I blogged about the impending crash of the real estate market, music and sports industries, the airlines and telecom, and higher education. I think I got a few of those right already and some more continue to teeter on the brink.

Monday's Financial Times had an opinion piece by Eli Noam titled "Market failure in the media sector" [via Jeff Jarvis] that paints an equally bleak picture. Noam believes that the underlying structure of the information economy might bring it all crashing down.

"The basic structural reason for this problem is that information products are characterised by high fixed costs and low marginal costs. They are expensive to produce but cheap to reproduce and distribute, and therefore exhibit strong economies of scale with incentives to an over-supply. Second, more information products are continuously being offered to users. And information products and services are becoming more "commodified", open, and competitive." - Eli Noam, "Market failure in the media sector"

Every time I talk to someone who gets a paycheck for producing content of one kind or another I always get the feeling they know the gravy train might come to an end. The Internet and other technologies have not only made information and news ubiquitous but also just plain free for the taking. It was as if overnight someone rigged the content candy machine to dispense goodies with the push of a button. The Cult of Free had everyone, including the producers and distributors, drinking the Kool-Aid.

But enough of the doom, gloom, and finger pointing. I'm beginning to warm up to Jeff Jarvis's opinion that "the big get bigger....but underneath them, we are seeing little guys grow on an entirely different scale." Consolidation among the big media players will continue until someone decides it's actually cheaper to break or sell parts off. Meanwhile the little guys will find a way to make a living operating because they do not need the tremendous infrastructure or resources to produce the content.

Nick Denton is proving, from what few details he's given out, that micro-content can be a money making business model. Micro-content doesn't make billions or millions but it probably can make thousands. Most of this revenue will come from paid advertising or automated ads like Google AdSense or Blogads. The rest will probably come from reader donations or tip jars placed on the site.

According to Wired, Josh Marshall's Talking Points Memo blog garners $1,200 a month for the best ad placement spot on the site. Andrew Sullivan offers a 1-year subscription to his private email newsletter for a $20 donation. Other bloggers like Halley Suitt and Virginia Postrel keep it simple with just a PayPal donation button. (Google says I can't mention the very clickable ads on my site.)

Something tells me that bloggers are going to become a lot like musicians. Some bloggers will do it because it allows them to express themselves, but will never make a dime. Some bloggers will make enough money to pay some bills, but not enough to quit their day job. Some bloggers will make it to the big time, and remain either independent or get scooped up by a big media giant. I'd be happy just to be a drummer in a cover band that plays for beer and gas money on the weekends.