The only option is assimilation, Pt 2 of 3
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The only option is assimilation, Pt 2 of 3
"Whoever controls the media, controls the mind." - Jim Morrison
ICYMI
You can listen to this week’s podcast, Fortune Favors the Bold with co-founder & CEO @ BRANDthrō, Billee Howard, here on Substack, on Spotify, or on Apple Podcasts.
This is part two of a three part series, click here to read part one.
In part one of this series, we established the difference between wild speculation and informed inference when it comes to projecting where emerging tech trends will take us. Now, let’s get down to brass tacks - with the understanding that our informed guesses are still just guesses, what lessons can history teach us that will adequately prepare us for the world of tomorrow? Let’s focus in on the media...
Looking forwards by looking backwards - the rise and fall of the American newspaper
To get us started here, it would be informative to look at some historical examples. In the words of my most recent podcast guest (listen here), Pankaj Kedia, a man who’s seen and been a major part of every computer-based revolution since the mass adoption of the internet:
Pankaj: “People ask me, is AI hype?... Is AI real?... And my answer [to both], is yes. AI will touch every one of us. It will touch every segment, it will touch every vertical it will touch enterprise and consumer. AI is building on top of the Internet revolution, the mobile revolution. The Cloud advances.”
Max: “So the possibilities are [effectively] limitless?”
Pankaj: “Yes.”
What Pankaj says here may seem obvious, but it’s often overlooked - the AI revolution is in reality an extension of the cloud revolution, the mobile revolution (which connected a major portion of the world to the internet for the first time ever and made it truly global), and the original internet revolution itself. In fact, rather than viewing each of these events as separate and distinct, the timeline of history is more likely to reflect on them as inflection points along a broader trajectory - the adoption of the internet and instantaneous communication across every facet of human life. AI is therefore contextualized simply as the next step in the evolution of the internet and the way that humans use it.
Working within this construct, we have a basis for making projections that takes into account what’s come before in determining what’s to come next...
Remember newspapers? What about magazines? Here’s one for my 90’s and aughts babies, do you remember zines? All of these forms of media live on today in physical form in spite of the advent of the internet (although, as we’ll discuss, in a far more limited capacity). Especially in the case of the newspaper and magazine, these two types of content were simply dominant before the rise of the internet. Few if any could predict the strange impact that the internet has had on these outlets, but simply looking at the numbers for newspapers & magazines tells a story of a medium in massive an unending decline in the wake of the personal computing revolution.
Today, newspapers are struggling (and often failing) to break even. Between 2019 and 2020 alone, advertising revenues for newspapers fell 25%, and for the first time ever, the industry saw more revenue from physical paper sales than it did from advertisers as a whole, a new low-water mark for performance in the industry. Below is a chart of yearly paid circulation for all daily weekday newspapers in the US:
The decline is so steep and so consistent, that ‘newspaper’ companies are in a very real way no longer tethered to the physical medium they’re synonymous with. With shifting demand comes shifting business plans, and the print juggernauts of the past have had to adapt to the digital world or face obsolescence in the wake of the internet. See, the demand for newspapers and magazines is not the same as the demand for news or informational content. Rather, the demand for physical mediums as a conduit for news & informational content has disappeared as the alternative of more frictionless content was made possible with the internet revolution and ubiquitous by the mobile revolution.
I would further argue that given McLuhan’s theories on medium as message (read the previous installment of this series if you need a refresher on Marshall McLuhan), that even smaller revolutions within the broader internet revolution had an outsized impact on the media which often go unaccounted for. The most notable example here is social media. Applying McLuhan’s theory that “the medium is the message”, and that the content which occupies the medium is largely irrelevant as it’s simply the product of the medium, we can easily contextualize the changes we’ve observed in the average person’s information diet over the past several decades. But first, we have to start at the beginning...
Under the traditional newspaper model, the physicalization and transportation of knowledge was the primary challenge inherent to its spread. In other words, to spread knowledge further in a system in which information had to be printed and couldn’t feasibly be transported over long distances, more towns had to build printing presses and local newspaper companies to keep up with demand. The localized nature of this market naturally led to local newspapers becoming powerful and lauded institutions within their localities, and their back issues effectively served as the recorded history of their towns. The reporters at newspapers in larger cities became the fourth estate of American politics - the people responsible for airing out the dirty laundry of the powerful and corrupt, and ultimately became power brokers themselves, with their role as the informants of the public an exalted one.
Then came radio - a revolutionary new medium which could beam information around the world in an instant. The landscape changed. Now, people had a choice in the way they consumed information. Rather than the fixed, unchanging message of a newspaper, refreshed only by buying the newest copy, one simply had to buy a radio and flip it on to get their news fix. But instead of replacing newspapers, radio did something else - it complemented the message inherent to the written medium by bringing its own medium-specific tendencies to the table. Now, for the first time, you could hear the news as it was breaking, and sit down the next morning to read about it in depth over coffee.
In this example, the available mediums changed but the demand didn’t. Longer form, more deeply researched content was still heavily in-demand, and the quick-fix aspect of radio, and more awareness-based aspects of it as an advertising medium worked as an excellent compliment to drive eyeballs to the details-oriented long form reporting that followed up on the hottest breaking stories being detailed on the radio. Newspapers even got in on the action by purchasing radio stations to use as promotional vehicles. But, that’s not to say that there was no competition between mediums.
The more well-established newspapers were still growing wary of radio encroaching on their MOAT, and ultimately decided to leverage their longstanding connections to pressure wire services to stop providing radio broadcasters with breaking news scoops. All this conflict ultimately led to the failed Biltmore agreement, in which the newspaper publishers and radio stations negotiated a “peace agreement” of sorts which was almost immediately subverted by rising radio companies like NBC and CBS creating their own news-gathering organizations. But still, newspapers remained strong.
Advancements in transportation technology and decreasing costs of production came along at a rapid clip throughout the early-to-mid 1900s, and empowered established newspapers to distribute their papers around the country and ultimately around the world. Thus, America’s first media moguls, and the often overlooked first era of media consolidation were born.
Newspapers survived the radio and continued to show strong growth throughout this era. But soon, it would become clear that time was no longer on their side - innovation ceases for no one. Thus, the age of the television was born. The late 1930s would see the introduction of the television to the American market, an introduction briefly put on pause by World War II until the late 1940s. In 1947, there were a few thousand US homes with televisions, but by 1955, over half of the country had one in their living room (Digital Public Library of America).
Predictably, queue up newspaper executive panic and screaming from the belfries:
“The challenge of television to the newspaper is one which newspapermen cannot take lightly, and one which you must consider, as radio is having to do. What you face, and for that matter what radio faces, is an intense new competition for the free time of the American public. Time to read newspapers. Time to listen to the radio. Time to watch a television set.” - from “How Can Newspapers Meet Competition of Radio and Television?”, Nieman Reports, 1951
These executives were right to be alarmed (and, incidentally kind of predicted the information economy about 60 or so years before the term would actually be used for the first time). While television would turn out to be far less of a mass extinction event for newspapers than early commentators imagined, this era did see a major shift in newspaper growth. For the first time ever starting in 1950, newspaper readership began to grow at a slower pace than the US population.
Television would prove an incredibly powerful medium, one capable of spreading corporate messaging further and wider than advertisers had ever been able to before. And it brought with it a massive boom in the advertising industry which helped mask the warning signs for the coming decline of newspapers throughout the mid-century. The advent of this technology, while firmly occupying the distant past relative to the internet, is often understated as a factor in the decline of newspaper sales. Television, as a visual medium, introduced a new method of communication to the populous, where images and motion pictures could be intertwined with words to great cumulative effect. This transformed not just news and entertainment but also advertising, where visual appeal became paramount. The medium itself shaped the message by making it more visual, emotive, and immediate. And things were never the same...
The purpose of the content occupying television screens (from a business standpoint) was and is to sell products - and it could squeeze in more ads in a much more engaging format each day than newspapers could ever hope to. TV quickly became the number one medium for advertisers and the catalyst for people like Mad Men’s Don Draper.
“In the early 1950s advertisers were spending about $85 million on TV advertising, but within a few years, less than a decade, that figure was over $1 billion, and dwarfed radio. By the early 1960s, more ad dollars were being spent on TV than print. Newspaper revenue never recovered once the TV generation was born.” - Darin Pearson, The Evolution of TV Advertising
And just like that, newspapers were no longer king. Magazines’ days were numbered and radio was becoming an afterthought as quickly as it had risen to prominence. But newspapers weren’t done. TV, while dominant, did little to stop the overall growth of newspapers.
Yet again, the medium had evolved while the newspaper remained the same - and while they might not have come out on top, newspapers remained a staple of American life. In the time between the advent of the television and the inauguration of Ronald Reagan, CBS’s Evening News with Walter Cronkite and America’s period of single-channel TV watching had come and gone, and in its place, CNN and the 24 hour news network had risen. Throughout the 1980s, America’s voraciousness for news media seemed like it had no limit. Newspapers were still growing, although their trajectory was clearly flattened somewhat by the ever-unfolding television revolution. Nonetheless, the media as a whole was thriving. Media companies had a license to print money, and the creatives that powered them benefited greatly from it all.
But then, something happened. It didn’t happen all at once, but quickly enough that if you weren’t paying attention you just might have missed it. What changed? Big media adopted the Wall Street mentality - if you can’t beat em... buy em!
While consolidation had been occurring in the media market for some time by the 1980s, this is widely considered the inflection point at which the market became fixated on two words alone: mergers and acquisitions. Ready for the numbers? According to Business Insider, in 1983, 90% of American media was owned by 50 companies... by 2011, that same 90% was owned by only 6 companies (AT&T, CBS, Comcast, Disney, Newscorp and Viacom). What did this mean for the people who worked at these newly-acquired media companies?
Well it’s actually pretty simple... they got squeezed. You see, when only a few powerful companies control a market, it ceases to be in their best interest to truly compete with one another, since labor market competition tends to lead to pesky things like yearly pay raises and competition for top talent. Instead, the top companies naturally begin to optimize around cooperation - in other words - you don’t step on my toes, and I won’t step on yours. In economics, this is called an oligopoly - a “state of limited competition, in which a market is shared by a small number of producers or sellers” (Oxford Dictionary, 2023).
Now, there are a lot of drawbacks to oligopolistic markets that we don’t have time to get into today (this article’s already too long as is and we haven’t even made it to the internet, let alone AI). But a few key issues include the fact that oligopolies effectively operate as cartels seeking monopoly power, blocking new companies from entering the market and competing, colluding to drive up prices in step with one another, and hamstringing innovation.
But what happens when traditional, local newspapers and TV outlets become part of these media giants? The once vibrant voices of local communities become streamlined, standardized and removed from their traditionally local focus, reduced to echoing the narratives of larger, multinational corporations. This has led to a decrease in unique perspectives, and a shift in content from investigative journalism to click-driven media. Its also allowed the large and powerful owners of these media corporations to introduce a singular, top-down bias to their channels in favor of their own views - political and otherwise, to pretty insane effect:
(Update: thankfully, that merger between Sinclair and Tribune did not go through)
The knock on effects of this replacement are as troubling as they are widespread. From bringing about mass unemployment in an industry that was previously crucial for allowing creatives to make a living, to depriving vast swathes of the United States from any type of local news reporting at all, consolidation has been the major driving force of disfunction in the media industry over the course of the past 40 years. As Penny Abernathy writes in her 2020 report, News Deserts and Ghost Newspapers: Will Local News Survive:
“We can measure the loss of local news in recent years in two ways: the loss of newspapers and the loss of journalists. In the 15 years leading up to 2020, more than one-fourth of the country’s newspapers disappeared, leaving residents in thousands of communities – inner-city neighborhoods, suburban towns and rural villages – living in vast news deserts. Simultaneously, half of all local journalists disappeared, as round after round of layoffs have left many surviving papers – the gutsy dailies and weeklies that had won accolades and Pulitzer Prizes for their reporting – mere “ghosts,” or shells of their former selves. Compounding the problem, there has been a lack of capital and funding available to support a variety of for-profit, nonprofit and publicly funded news organizations attempting to thwart the rise of news deserts.” - Penny Abernathy
To be clear, very little of this was actually caused by the wide scale introduction of the internet in the mid-90s. The internet introduced new distractions with whom newspapers needed to compete for eyeballs, and the introduction of social media served to essentially dismantle the entire economic model that newspapers relied on, but the catastrophic damage the industry has suffered since 2000 is primarily caused by two main issues: 1. newspapers are a medium considered antiquated by new consumers due to successive previous generations of new innovations (radio, television, the computer, the smartphone), and 2. the new, hyper-concentrated media companies of the 2000s had a strangle hold on the industry, ensuring that what remained of the small time players in the market were pushed to the financial brink by the chaotic financial markets of the early aughts, and sent completely over the edge by the 2008 financial collapse.
Oh, and there’s one other drawback to oligopolies that’s worth mentioning now... oligopolistic markets are not just innovation-less by nature, they’re also more prone to outside disruption than healthy, competitive markets. All of these factors stacked upon each other like a house of cards as the millennium approached meant that unlike the rest of us, Y2K was very real for those occupying newsrooms.
Wow... this series just keeps ballooning out and honestly I’m loving it. In our next installment, I’ll be wrapping up our historical analysis of newspapers with a few different perspectives on their fall, as well as diving deep into the next disruptive force coming for the media: AI. If you’re enjoying this series, please let me know down in the comments! If not, well... let me know down in the comments! I always appreciate critical feedback so don’t hold back. Thank you, and I can’t wait to finish this series with you next week!
3 unique AI tools worth checking out
🏃 Motion
The product - managing hundreds of projects and tasks? Enter Motion, the project management superhero for Product Teams. With automation and AI, Motion prioritizes and re-prioritizes everything for you, increasing productivity by a magical 137%. Features include intelligent planning, auto-assigning tasks, real-time monitoring, automatic re-prioritizing, workflow automations, and simplified scheduling, all designed to maximize team output and minimize headaches.
The use case - ideal for project managers, team leaders, or anyone juggling numerous tasks and assignments. Motion is your virtual assistant, keeping everything on track without the constant need for check-ins and micromanagement. With its ability to adapt to emergencies and unforeseen delays, it’s more than a tool - it's peace of mind in a chaotic world.
🧩 Framer AI
The product - Framer AI lets you turn your raw idea into a real webpage in seconds, thanks to AI-generated and human-curated designs. Each section offers a unique blend of layout, copy, and styling, with endless variations and customization. Tweak, delete, mix, match, shuffle, and improve your website copy all with a click, creating a site as unique as your vision.
The use case - perfect for designers, entrepreneurs, or anyone in between looking to launch a professional web page without the hassle. Framer AI empowers you to explore your creativity and see your ideas come to life with ease and efficiency. It’s also connected to an LLM which helps you move fast to create surprisingly good web copy in a fraction of the time.
🧙 Merlin
The product - turbocharge ChatGPT on your browser for tasks like speedy Gmail replies, lightning-fast blog summaries, and YouTube summaries on the go, plus it could be used to really up your social media game. Features include: Unlimited GPT-4 Access, an AI Chatbot on any website, ChatGPT for various platforms, and the ability to translate into multiple languages.
The use case - if you’re in the business of quick communication or content creation, then Merlin could be worth a shot. From professional email communication to social media engagement, it looks like a super efficient solution for those who need to express more in less time.
Chronicles of the circuit circus
Snapchat users freak out over AI bot that had a mind of its own - by Samantha Murphy Kelly for CNN Business. The big pull quote:
“The Snapchat My AI feature — which is powered by the viral AI chatbot tool ChatGPT — typically offers recommendations, answers questions and converses with users. But posting a live Story (a short video of what appeared to be a wall) for all Snapchat users to see was a new one: It’s a capability typically reserved for only its human users.
The app’s fans were quick to share their concerns on social media. “Why does My AI have a video of the wall and ceiling in their house as their story?” wrote one user. “This is very weird and honestly unsettling.” Another user wrote after the tool ignored his messages: “Even a robot ain’t got time for me.”
Turns out, this wasn’t Snapchat working to make its My AI tool even more realistic. The company told CNN on Wednesday it was a glitch. “My AI experienced a temporary outage that’s now resolved,” a spokesperson said.”
A Stroke Stole Her Ability to Speak at 30. A.I. Is Helping to Restore It Years Later - by Pam Belluck for the New York Times. The big pull quote:
“...Mrs. Johnson — then a 30-year-old teacher, volleyball coach and mother of an infant — had a cataclysmic stroke that paralyzed her and left her unable to talk.
On Wednesday, scientists reported a remarkable advance toward helping her, and other patients, speak again. In a milestone of neuroscience and artificial intelligence, implanted electrodes decoded Mrs. Johnson’s brain signals as she silently tried to say sentences. Technology converted her brain signals into written and vocalized language, and enabled an avatar on a computer screen to speak the words and display smiles, pursed lips and other expressions.”
Google and YouTube are trying to have it both ways with AI and copyright- by Nilay Patel for The Verge. The big pull quote:
“This, broadly, is the position that Google is taking after announcing a deal with Universal Music Group yesterday “to develop an AI framework to help us work toward our common goals.” Google is signaling that it will pay off the music industry with special deals that create brand-new — and potentially devastating! — private intellectual property rights, while basically telling the rest of the web that the price of being indexed in Search is complete capitulation to allowing Google to scrape data for AI training.”
Signoff
Thank you so much for joining me on another Future of Product! I hope you’re enjoying this series, and if you were frustrated with the decidedly not-AI focus of this installment, I have good news - next week’s going to be all about AI, how it’s likely to shape the media industry over the next 10 years, and much more.
Oh, and in case you missed it, you can catch up with last week’s guest, Pankaj Kedia, Founder & Managing Partner @ 2468 Ventures, in our episode AI will be even bigger than the Internet on Substack, Spotify, or Apple Podcasts.
Until next time, stay frickin cool.