Here’s the bottom line to the crisis in media right now. The vast majority of us are average, and average doesn’t sell.
People in the media business are scared. It seems as if the world is coming unglued. Some brands are dying while others are laying off a lot of people.
I’ve heard lots of different explanations for what’s going on, and while there’s some truth in many of these explanations, I’m going to toss my own into the mix.
There are simply too many people providing content, and this is what happens when the market is flooded with new entries.
Reflecting on the Pareto Principle can help explain this.
The Pareto principle says that 20 percent of causes bring about 80 percent of effects. For example, 20 percent of your customers account for 80 percent of your revenue; 20 percent of your employees do 80 percent of the work; and 20 percent of authors sell 80 percent of the books.
It’s a spooky thing, in at least two ways. First, it continues to apply as you dig down, so that if you take that top 20 percent of authors who sell 80 percent of the books, 20 percent of those authors sell 80 percent of those books — and on and on, until you get one or two people who sell a whole lot of books. The second spooky thing is that this principle even applies to planets and ecosystems and hurricanes and such, so it’s not just a quirk of human behavior. It seems to be a fact about statistics.
What happens to the Pareto Principle when you expand the base?
For example, the internet has made it trivially easy to become a content creator. Bob Hoffman jokes that he finally met somebody who doesn’t have a podcast.
There are plenty of platforms that make content creation simple. In addition to that, we all have a movie studio in our pocket. Anybody can post stuff anywhere.
This results in an absolute tsunami of content, and AI is making it even worse. I just attended a session the other day where a friend explained how you can create a book with designrr.io in about ten minutes.
Supply is basically unlimited, but while demand for internet content is way bigger than I ever expected it to be – people spend a huge amount of time on their phones – it’s still limited. There are only so many hours in a day for people to consume content.
It stands to reason that the content space is going to have some casualties as newcomers eat more of the available time.
Spotify listeners spent 14.9 million total hours listening to The Joe Rogan Experience in the first month that show was available on Spotify. Those 14.9 million hours were not spent on other media, like newspapers or magazines.
My take on all this is that if you’re a media company, the answer won’t be found in revenue or business model innovation. Those are good things, but they’re not going to address the fundamental problem, which is that the top 20 percent are going to continue to take the lion’s share, and with the constant addition of new creators, that top 20 percent is going to get better and better and better.
Media companies are competing against an ocean of content. New people are coming on board all the time, and while most of them are average, and are no particular threat, some of them are talented, and a small portion of them are super talented.
My friend Jimmy Finkelstein recently tried to start a new media business on the premise that people want news from a moderate point of view. My first (cynical) reaction was “No, people actually want to hear lunatics screaming about the end of the world.”
But my second reaction was that’s really not the issue. The issue is talent. I don’t mean to speak against anyone at The Messenger. I’m sure there were some talented people there. But in every profession you have some people who are so much better than everyone else that it defies understanding. Think of Patrick Mahomes, or Steven King. Those guys are on the edges of the distribution curve.
So my recommendation to media companies is to find extraordinary talent. Things like paywalls and first-party data and all that stuff will pale in significance to the effect of having very talented people on your team.
