The Media’s Dilemma – Mass Exposure vs Exclusive Distribution

In the era of mass media, publishers enjoyed mass exposure and exclusive distribution rights. Today, the internet is rapidly breaking down any business that relies on that model.

Even as 20th century mass media relied on affiliates and syndication to achieve mass exposure levels, the publishers of content always controlled distribution through specific and enforceable agreements.  A clear hierarchy existed, and the original producer of written words, music, or video could keep an upper hand over their hired distributers.  A local affiliate was ultimately replaceable, and this could influence anything from pricing contracts and editorial endorsements to price collusion and conspiracies of silence.

The costs of publishing kept competition down.  Once the product was created, the distributor was little more than hired help.  Anyone could do that part.  As specialization is natural, publishers didn’t necessarily have a need to distribute in-house.  Indeed, NBC did have an ownership stake in its local stations, but many of them are also independently owned under the limitations of the content-liscensing agreements.  Likewise, the Associated Press doesn’t sell its newspaper on the street corner, but you’ll find their stories in almost any paper you read.

No Capital, No Recourse

The fundamental relationship that allowed this situation to thrive was a reliance on capital to publish content.  If a newspaper was printing unattributed articles, the content producer could sue for the printing press.  If a TV affiliate was broadcasting unliscenced programs, the producer could sue for the broadcasting equipment and FCC-liscensed broadcasting rights.  The very act of publishing and distribution required a cash investment into capital goods – and the legal seizure of these assets reinforced the hand of the content producers.

Instead, the very lack of capital barriers that makes the web so active is the same one that leaves content producers with no recourse.  Are you going to sue over a $10 domain name and some bits of electricity stored on some computer in some warehouse?  You won’t even get the warehouse, because that’s owned by a third party who rightfully enjoys safe harbor provisions. If the producer doesn’t like how their content has been distributed, there’s not much they can do but shake their fist and grumble about it.

Sure, they can swing that fist at someone and cause some damage to an individual – they can try to “make an example out of someone,” but the effort seems ultimately futile when there’s no real capital to seize.

Control or Visibility

Content producers are increasingly forced to decide between controlling the way their products are distributed, and reaching as many people as possible.  No exclusive distribution agreements and affiliate arrangement can compete with a truly viral marketing campaign:  when every email and blog post and facebook update is a form of published distribution, no centrally organized effort could create the same effect.

As search engines collect data about what people are talking about and linking to, the bias toward viral marketing gains strength and feeds into itself online.  Content with buzz ranks high, more people see it, and if its good it ranks even higher as those people continue to spread the word.  And no, you’ll never get there if you try to control how every single distributor copies it around, links to it, quotes it, and talks about it.

Mainstream Mass Media Becomes a Niche

…And some content producers will be able to survive with a pay-per-view and/or subscription model as long as they’re willing to trade in some of the market share and mass influence they’ve enjoyed for so long.  Yet its because they’ve enjoyed these dual advantages and come to take them for granted that many producers will be slow to adapt, or they’ll try to shape the laws in order to create their idealized market.  Unfortunately, this 20th century market simply doesn’t exist today and the ones who fight to recreate it are probably just slowing the rest of us down.

The ones who have made it work provide a niche, highly specific content about high value topics.  Stratfor has long charged its subscribers a hefty fee, yet anyone who is serious about global politics and economy will gladly write the annual check.  Likewise, investors are not concerned about small monthly costs for access to the Wall Street Journal and other market data feeds.  Some institutions on Wall Street pay huge premiums to get closer to the data feed and they try to profit off the initiative it provides.

As advertising and revenue plummets in line with consumer spending, mass media outlets are potentially facing their last chance to adapt.  The market reality unleashed by no-capital publishing is revealing itself, and some producers like Fox have already decided to focus on niche profitability over mainstream reach and viral marketing.  Other producers and outlets have been slower to make decisions or plan to rely on legal posturing to preserve their place, but this plan goes against the momentum of the markets.

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