All is Not Lost for Traditional Media

New Moats and New Opportunities

If the old moats crumble, let’s build new ones. Source: ChatGPT 4o

Recently, I ran into a longtime friend who works at a traditional media company. I hadn't seen him in a while. "So, I read somewhere that we're going to get disrupted," he said laughing, clapping a hand on my shoulder. "Have you ever thought about covering a different industry? Maybe retail? Or energy, or anything else?" Underneath every joke lies some truth. It's not pleasant being told (repeatedly) that your job, which is already hard, is going to get harder.

I deliver a pretty sobering message to traditional media companies. The current state of much of media is bleak, but that’s largely a lagging indicator of the disruption of media distribution over the last 20 years, enabled by the internet. I believe that another disruption is bearing down, the disruption of content creation, this time enabled by GenAI. Things will get tougher, not easier.

It’s not fun being the bearer of bad news. So, it’s fair to ask: why do it?

Foremost, I try to call it like I see it. But I also want to help people in the media business prepare for what's coming. I watched as TV was disrupted by Netflix. Disruption is a very powerful force and I doubt it could've been stopped. But, as an industry, we had a lot of own goals. There were things we could’ve done differently and, more important, a lot earlier. We might not have stopped the disruption, but maybe we could’ve blunted or contained it and, in some cases, capitalized on opportunities it presented.

I think that's also the case today, as long as traditional media companies confront the implications of GenAI head on.

Tl;dr:

• GenAI will prove disruptive to media. But it isn’t yet clear how disruptive it will be. Disruption doesn’t always mean the same thing.

• We don’t yet know how good the technology will get and to what degree consumers will embrace it, and for which use cases. It’s also up to incumbent media companies how they respond.

• Another cause for optimism is that the declining costs of content creation will create opportunities too, and not just cost efficiencies. Whenever one input into a production process or value chain becomes more abundant, other things become scarcer and more valuable.

• Here’s The Question™ that will determine how value will be created and redistributed in media over the next 20 years: as content becomes more abundant, what new scarcities will emerge, what existing scarcities will become more valuable, and what businesses (and business models) will be newly viable?

• Here’s a partial list of emerging scarcities: compelling, truly original stories; curation (both algorithmic and editorial); human authenticity, provenance, and craft; tracking, monitoring, and measurement; consumer time and attention; marketing prowess and muscle; fandom and community; recognizable, trusted brands and IP; professional validation and infrastructure; nostalgia; talent relationships; and IRL experiences. Many of these are the sole province or in the wheelhouse of traditional media.

• Confronting the potential implications of GenAI is overwhelming, but the worst thing traditional media companies can do is stick their heads in the sand. At a minimum, they should focus on workforce education and upskilling; move GenAI to the forefront of the long-range planning process; and develop skunkworks to build institutional expertise.

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