Typing Faster

July 13, 2010

The Internet Will Not Save You: Why We’re Still Waiting for the New Media Revolution

Filed under: Future of TV, the biz — petertypingfaster @ 7:00 am

When I got into this business back in the early 2000s the New Media bandwagon was just pulling out of the station. It was exciting. Listening to all these gurus who were out to change the world, flip traditional media’s applecart right over and start fresh. For a while I’m sure a lot of us thought it just might happen. The traditional broadcast model seemed to be declining. New internet startups like YouTube were launching every few months. Things were changing. The writing seemed to be on the wall.

And then something weird happened.

The collapse of traditional media? The upsetting of the applecart? None of that actually happened. All the New Media gurus who were promising we were going to be making money hand over fist using the internet as a distribution / crowd sourcing / promotional / etc tool, weren’t able to deliver. Today New Media “success” is much the same as it was five, ten years ago. Page views. Promotional awareness. Creative respect. These are the things that the gurus are still saying New Media is good for, but money, the dump trucks full of money, are surprisingly absent.

“But people are making money on the internet,” you say. “Just look at Google!”

Of course it’s true. There are companies and people out there who are making money, but, for the most part, the people who are making money aren’t content creators. Companies like YouTube are valued highly (despite losing boat loads of money) not because of the content they show, but because of the social network it’s created to do it. It’s a theoretical value. We know there are tons of people who use YouTube everyday, but advertisers still haven’t figured out how to access them in a way that makes financial sense. Google has enough money in its pockets to take a gamble on the fact that sooner or later they will figure it out, and in the mean time they’re willing to lose money on it (to the tune of $1.65M USD a day).

Some individuals have fared a bit better. Take, for example, the family behind the Charlie Bit Me! video.

Once the most viewed video on YouTube, experts have speculated that the family could have earned as much as $100,000 GBP. Of course for every Charlie Bit Me! success story, there are millions of YouTube videos that get one (or none) view.

So why, exactly, has this happened? Why hasn’t the promised New Media revolution appeared? What’s going on?

I don’t think anyone has all the answers, but John Naughton presented some interesting ideas in a piece for the Guardian recently.

The most interesting point he raises comes when talking about what analytical framework we use when discussing the internet. In fact, he thinks we should

Think Ecology, Not Economics

As an analytical framework, economics can come unstuck when dealing with the net. Because while economics is the study of the allocation of scarce resources, the online world is distinguished by abundance. Similarly, ecology (the study of natural systems) specialises in abundance, and it can be useful to look at what’s happening in the media through the eyes of an ecologist.

Since the web went mainstream in 1993, our media “ecosystem”, if you like, has become immeasurably more complex. The old, industrialised, mass-media ecosystem was characterised by declining rates of growth; relatively small numbers of powerful, profitable, slow-moving publishers and broadcasters; mass audiences consisting mainly of passive consumers of centrally produced content; relatively few communication channels, and a slow pace of change. The new ecosystem is expanding rapidly: it has millions of publishers; billions of active, web-savvy, highly informed readers, listeners and viewers; innumerable communication channels, and a dizzying rate of change.

To an ecologist, this looks like an ecosystem whose biodiversity has expanded radically. It’s as if a world in which large organisms like dinosaurs (think Time Warner, Encyclopaedia Britannica) had trudged slowly across the landscape exchanging information in large, discrete units, but life was now morphing into an ecosystem in which billions of smaller species consume, transform, aggregate or break down and exchange information goods in much smaller units – and in which new gigantic life-forms (think Google, Facebook) are emerging. In the natural world, increased biodiversity is closely correlated with higher whole-system productivity – ie the rate at which energy and material inputs are translated into growth. Could it be that this is also happening in the information sphere? And if it is, who will benefit in the long term?

While this is undoubtedly exciting, it also means that traditional economic models are as useless as dinosaurs. It also makes me wonder whether the ongoing quest to “monetize New Media” is actually a fool’s errand. Price is determined by scarcity, yet the internet flips that on its head. When we’re drowning in content how much, if anything, are people willing to pay? Is it possible to come up with another economic model? Or are we looking at something completely new? Either way, we know it’ll have to be something very different, and much more complex, than the monetization attempts we’ve seen in the past.

Complexity Is The New Reality

Even if you don’t accept the ecological metaphor, there’s no doubt that our emerging information environment is more complex – in terms of numbers of participants, the density of interactions between them, and the pace of change – than anything that has gone before. This complexity is not an aberration or something to be wished away: it’s the new reality, and one that we have to address. This is a challenge, for several reasons. First, the behaviour of complex systems is often difficult to understand and even harder to predict. Second, and more importantly, our collective mindsets in industry and government are not well adapted for dealing with complexity. Traditionally, organisations have tried to deal with the problem by reducing complexity – acquiring competitors, locking in customers, producing standardised products and services, etc. These strategies are unlikely to work in our emerging environment, where intelligence, agility, responsiveness and a willingness to experiment (and fail) provide better strategies for dealing with what the networked environment will throw at you.

The question then is: will we rise to the occasion?

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