I read an interesting article the other day from the Columbia Journalism School (pdf here) about the current state of digital Journalism. It’s the best treatise on digital content I have seen. Its concentration is Journalism, but it branches into online advertising as well.
One of the most interesting passages in the report deals with the ‘bundle’ – the packaging of content and advertising:
Digital disrupts the aggregation model that was so profitable for so long. Almost no one used to read the entire newspaper every morning, and audiences frequently tuned in and out of the network news at night. Yet, news organizations sold their advertising as if every page was turned and every moment was viewed
This is a great summary of the struggle so many media companies are going through. It also has eerie parallels with the music industry – an industry also struggling to emerge from a time when content (songs) were bundled and sold as ‘physical things’ (CDs).
It’s also the reason I wouldn’t invest in Cable Companies right now – they sell bundled content in a way that assumes everyone watches most (if not all) channels and offerings. When it’s increasingly plain most people don’t.
‘Bundling’ like this was important because you couldn’t separate content when it was physical or analog – no newspaper would produce a page for each story and sell those pages individually. It wouldn’t make sense.
Digital content is obviously different. It’s easy to separate and users can choose to only pay/view those things they are interested in. Digital breaks the economics of the bundling model. In the digital space users are determining what is ‘useful’ in a way that is almost a pure reflection of demand – “I like these three stories, this editorial and this cross-word puzzle, but the rest of the stuff you can have back”.
Just like on iTunes users determine that these three songs are worth it, but the rest of the album isn’t. Or when you watch cable TV, your weekly viewing behavior is probably sending clear signals to the Cable Company on what you like and don’t like (and what, if given the choice, you would pay for).
Thinking about it this way, digital content hasn’t changed us, it’s just uncovered our true interests previoulsy masked by content bundling. For decades we’ve been paying for content in magazines and newspapers that, given the choice, we wouldn’t consume. For decades media companies have been making excessive profits off of the back of these bundled offerings.
While I sympathize with the plight of the Professional Journalist and believe that there is still a place for good journalism in the digital world, I don’t lose any sleep over the dismantling of analog content bundling that masked true demand. We’re far better off trying to figure out revenue models that rely on real demand and supply rather than protecting outdated business practices.
Cable companies, be warned.