Business & Finance article: The end of the media industry – Extruded Content

We live at a hinge in history, between the assumptions of the industrial era on the one hand and the digital era on the other. The industrial revolution created a world of centralization and organized hierarchy. Its defining pattern was a single, central dot to which all strands led. But the emerging digital age is different. The pattern of political, commercial and cultural life in the emerging digital age is the absence of the central dot. In its place a mesh of many points is evolving, each linked by webs and networks. This idea, that we are witnessing the death of the centre and the rise of a new centrifugal trend that disperses power to individuals, is both empowering audiences and disrupting the media industry, and is the central theme of my new book A history of the Internet and the digital future.

(I wrote this piece for Business & Finance Magazine, published 11/2010 under the title “Digital media: Death of the centre of media industry”.)

I and a co-author recently wrote in BusinessWeek that the Internet offered salvation to the music industry, but only if it was willing to undergo a total change and merge with elements of the computer game industry. This article presents a related but separate argument: that an entirely new relationship between media producers and audiences is emerging.

Over the last decade premium Internet connection speeds have risen by 50% annually. This has created the conditions for a new media boom on the one hand, but a contraction of the mainstream on the other. Established media will continue to be disrupted by the spread of digital distribution, but at the same time new opportunities for niche content are emerging.

The rise in the speed and the number of Internet connections allows for a new pattern of distribution in which viewers ‘pull’ content by choice rather than passively receive content according to the broadcast schedule of their local TV or radio station. In the old broadcast, or ‘push’, model the media distributor sought to generate the most advertising revenue across the entire market by focusing on a mainstream on generally inoffensive common denominator programming. The move toward pull download means that this mainstream is contracted.

But there is another story here. The rise of a new generation of assertive audiences and the fragmentation of the mainstream is creating the conditions for a new model of media consumption that goes beyond the ‘push’ and ‘pull’ models. The move to pull broadcasting is creating the conditions for a new ‘extruded’ model that will violently disrupt established businesses, and which will allow new niche players to enter the market.

Digital distribution is creating a new generation of digital audiences drawn together by common taste rather than geographic proximity. If one’s local broadcaster, cinema, or record store does not deliver the kind of content one wishes, one can pull the desired content from alternative sources online. This new global market for content means that consumers of common taste, no matter how niche, can now cluster around a preferred product. Choice therefore fragments the audience and contracts the mainstream. At the same time it allows producers of niche content to find viable markets on the margins. This has several implications that should caution established players

The more niche a type of content is the more specialized its audience. Niche audiences are likely by virtue of their pronounced tastes to be sophisticated viewers. A TV viewer with a taste for black white cowboy TV series from the mid-1950s, for example, presumably has a deeper knowledge of this particular kind of content, the actors, directors, and scriptwriters, than the average viewer has of mainstream content.

Battlestar Galactica's controversial (for viewers at least) change of gender for a major character

Increasingly specialised and discriminating niche audiences are also likely to be extremely assertive. Science fiction audiences have used the Internet to voice their objections and concerns about ongoing productions for many years. What is new is that content producers are beginning to take heed because the economics of digital distribution force them to. Examples include the action horror Snakes on a Plane (2006) and the TV series Battlestar Galactica (2004-2010), both of which were influenced by an ongoing dialogue between audience and producer. This is a sign of things to come.

The farther from the mainstream one ventures the more precarious the financial situation of the creator. As the mainstream contracts, the fragmented audience will not only be sophisticated and demanding, but it will increasingly hold the content producer’s purse strings. This will allow audiences to exert such force on some media that it becomes malleable to the extent that assertive audiences will not only ‘pull’ content according to their own schedules, they will shape it according to their own creative desires.

This is in keeping with the broad centrifugal trend of the digital future, and the death of the centre. The future of media will not be push, or pull, but extruded – with sophisticated niche audiences increasingly shaping the content they view and listen to. The media industry must adapt early.

Johnny Ryan is a Senior Researcher at the Institute of International & European Affairs, Dublin; an O’Reilly Foundation Scholar at Magdalene College, Cambridge, and author of A history of the Internet and the digital future.

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