Devaluation of the content and the audience by Philippe Barbe 06 Jan 2021

Part 9 of 20 in a series examining the interplay of Data Science, AI, the media and advertising.

The proliferation of media outlets spawned by media fragmentation, and subsequent evermore finely segmented audiences, created a giant void of media time and space looking for a tremendous amount of content to fill it at all these outlets. And, to be profitable, this content had to come cheap.

Because they are considerably cheaper and faster to produce than original new fiction, reality shows, talk shows, and re-runs of older shows filled the newly available time on television and radio.

Not so much in the written media. Despite increased productivity starting the 1970s through the ‘90s from word processors and improved printing technology followed by digital cameras and editing tools 2000s, actually writing an original article still takes time!

A crisis of content value

The goal of every content creator is to have the content consumed in some fashion… read, watched, listened to.

If the internet created an economic crisis in the traditional edited-media industry, it also created a crisis in the world of content creation. By offering free platforms, with a purely advertising supported model, a massive amount of content became available for free, devaluing both content and content providers.

Take, for example, this table from the Bureau of Labor Statistics showing a particularly striking shift in salaries of journalists’ salaries compared to all other occupations. Journalists salaries have fallen well behind those of other professions.

Year		Mean yearly salary,		Mean yearly salary,		Ratio
		reporters and correspondants		all occupations
2003		40,090		36,210		1.11
2013		44,360		46,440		0.95
2015		46,560		48,320		0.96
2019		46,270 (median)		53,490 (median)		0.87

While a few YouTube and podcast “stars” saw their revenues increase by producing immensely popular content on ad-supported platforms, they are the few exceptions as the vast majority of content creators suffer from devaluation of their work as a combination of too much content and too many outlets drive too little audience.

Digitalization has affected content creation much like it has other industries: the middle got wiped out, replaced by highly paid stars who draw huge crowds and revenues alongside tiny operations that struggle to survive.

A fragmented landscape for content creators

The fragmentation of media outlets that made it harder for advertisers to build ad campaigns to reach their target audiences effectively also made it much harder for content creators to monetize their work across so many outlets. The additional impact of fragmentation on creators was the devaluation of their work.

Another factor contributing to the devaluation of content has been the concentration of media outlets in fewer hands that we discussed previously (see part 8) which gives even more leverage to content distributors.

By recycling content through the multiple outlets they own, large content distributors can reduce acquisitions, create surplus of content, and have more bargaining power than ever. Quite rational behavior on their part, but a systemic flaw if there is a social interest in keeping arts and journalism alive and well, and therefore artists and journalists fed.

What’s missing is an efficient mechanism for creators to make their content available for sale to content distributors in a cost-effective manner that’s good for both parties. We’ll discuss a possible mechanism in a future article.

Deflation of audience value

Despite the New York Times’ website ranking #113 worldwide, 36 in the US websites, and 17 in the global market of news websites, it is not considered an advertising powerhouse. Having lost control of their online advertising the edited media have not been able to capitalize on their audiences.

In the third quarter of 2020 the Times added 393,000 digital subscribers, and yet its ad revenue dropped 30%. Their fourth quarter projections are for a 14% increase in subscription revenue with a 15% decrease in advertising sales. This pairing of rising subscriber numbers with declining advertising revenue isn’t a 2020 pandemic anomaly, it has happened every one of the past 4 years.

Surprising when you consider that with 60% of its audience made of Gen Z and Millennials the readership of the New York Times has immense value for advertisers. Those readers (and readers of newspapers in general) tend to be more educated and well off. Whether consumed in digital of printed form, 70% of households with income above $100,000 read newspapers in 2018 and 60% of adults read newspapers.

Falling advertising revenues of newspapers, despite increasing readership, points to a devaluation of what would appear to be a prime audience for advertisers.

These statistics indicate that the decline of newspapers is less about their form (print or digital) or a decline in readership… news is a heavily consumed content… than the inability to channel the audience directly to the outlet and the inability to monetize that audience.

As we will see in subsequent articles the reason traditional media has failed to monetize their audience, and therefore their content, is its reliance on business processes that failed to leverage Data Science.