Content’s Triumphant Return

Professional content, we were told, was dead.

Why pay journalists, producers and directors, if you can crowdsource?  Who needs TV networks when people can create their own on YouTube?  Why pay editors to choose stories when you have RSS and Digg?  A new dawn had arrived or so it seemed.

Now traditional media is soaring back and social media, many still struggling to find elusive profits, are inking content deals.  Meanwhile, Yahoo is cutting social services even as they hire journalists. What’s going on?

The Death of Content

Back in the 1990’s, or just after the earth cooled and the dinosaurs roamed the earth, everybody was excited about a new thing called the Internet.  Some very smart people realized that it would be a revolutionary way to distribute media.  Understandably, they deployed a tried and true media formula:

Content + Distribution = Eyeballs = Lots and Lots of Money!!!

Dealmakers and investment bankers cobbled together deals to match content with the technological platforms that would put it in front of consumers.  They also did lots of ad deals, mostly with each other in the form of barter.  Valuations went wild until the crash of 2000 killed the party.

In the ruins, a new Web emerged: Web 2.0.  No longer would content be king, now the audience would take over.  While social media’s growth was exponential, newspaper circulations plummeted.  Dan Rather and the New York Times both got caught in sourcing scandals.  Then came the recession and journalists were laid off by the thousands.

Content’s fortunes had never looked so bleak.

The Fragamentation Effect

Back in the “old media” world, there was a parallel process of fragmentation that altered the content landscape.  The rise of cable and satellite TV created a lot more stations and fragmented audiences. (In the US, the Telecom Act of 1996 had a similar effect on Radio).

Fragmented audiences means that the bar for successful content is effectively lowered.  The first to really catch on was Ted Turner, who went out and spent millions acquiring old film and TV libraries that many thought to be worthless.  He gave them new life on cable channels, made a lot of money and slept with beautiful women.

And fragmentation leads to a lot more than just recycling old content.  New concepts, like Fox News and reality shows, which would have never been able to garner enough ratings to make the grade in the era of The Ed Sullivan Show or even Happy Days, became viable.

Media fragmentation effectively means that only a small percentage of people have to like content for it to be successful, even if the rest of us hate it.

Follow the Money

Money is funny.   It makes people think, say and do illogical things.  Even a small change in fortunes can spur on a flurry of specious theories.

When times are good and ad rates are high, content is greatly valued.  When times are bad, consumers are worth less and marketers aren’t willing to pay much to reach them.  The price of audience goes down and the demand for content along with it.  At both tops and bottoms, self styled gurus come along and proclaim a new era.

However, the numbers have been there all along for anyone who actually bothered to look.  Superbowl ads continue to get more expensive every year.  Ad rates for branded content are generally 10-20 times than for social media.  Facebook, despite 500 million users, still trails Yahoo in revenue.  MySpace, Friendster and many others face questions about their survival.

The Informational Cost of Crowdsourcing

While the revenue side has been disappointing for user generated content, the cost picture is, if anything, worse.  Free, it seems, is a relative term.

Professional editors and producers spend their careers learning how to successfully separate the wheat from the chaff.  Crowdsourcing, supposedly, was going to make those jobs obsolete.  By letting ordinary people submit content and letting others vote to determine what was best, the human fallibility of individual experts would be bypassed, resulting in better content at lower costs.

However it was not to be, for two reasons.  Firstly, most of the content submitted online is crap.  If by chance a true talent emerges, a star is then born and they want to be paid for their efforts.  Secondly, as YouTube found, bandwidth costs money and having thousands of people uploading content gets expensive.

Finally, to build a successful media product you need to have some consistency.  Creative people need to be managed to ensure they meet deadlines, stay on-brief, keep up quality and get dissuaded from the inevitable misguided idea.  There’s more to writing then typing.

Content’s Paradigm Shift

Now that we are climbing slowly out of the recession and ad rates are on the rise, professional content is coming back in vogue.  Even YouTube is investing in it.  And all those journalists that were laid off?  Many of them have been rehired at places like AOL and Yahoo.

However, it would be wrong to say that things are going back to where they were.  As “old media” companies are learning how to innovate forward, “new media” companies are realizing they need to integrate back. Increasingly, we’re seeing user generated content intertwined with professional content.

That’s as it should be.  As I noted in an earlier post, a true paradigm shift not only creates new possibilities, it also incorporates the old stuff that still works and that’s what’s happening now.  Professional content is interacting with audiences in real time, not just in once a month surveys or the occasional focus group.

And so, content is king again.  Not through the wisdom of crowds, but through the creative power of individuals who devote their life to it.

– Greg