Why Most Media Companies Will Die Eventually
I am making a prediction. It is a bold prediction. And if the prediction goes wrong, it is my reputation at stake that I have built over more than a decade. And that prediction is: Media companies will die a slow, painful death.
News organizations that produce content for a living will not survive in the long term. Long back, when we had TV, Radio, Newspapers, and Magazines, there was no internet and there was no content marketing.
They existed because running a content channel was a complex business in itself. They had the reach. They had the audience. So businesses who wanted to reach customers paid the media companies to reach their potential customers – often with very high inefficiency. The ads were not well-targeted, not useful, not relevant and it was an interruption for the content consumer.
But gone are the days where you can attract attention to your brand only through paid advertising on media channels. You can now create and distribute your own content. That means you can become your own media company within 5 minutes. All it takes is some effort in creating content for your customers and publishing it on a blog.
The media companies until now have been the middlemen between brands and consumers. And as we all know, in the Internet age, the middle man is being cut out because both the parties in the ecosystem can connect with each other directly on a platform.
A digital platform becomes the middleman.
In the case of content, Google is the middleman who connects end customers and businesses with content and information. Airbnb is the middleman who connects people who have living spaces and people who are looking for living spaces. Uber is the middleman who connects passengers with cab drivers.
Before the age of Google, the media companies were able to reach customers not through a search engine but through a content channel. The content channel attracted end customers and the media companies interrupted them by showing ads of the businesses that funded their content creation in the first place. But here the content creation is funded by other companies’ ads which the end customers do not like because it is interrupting their content consumption.
If a business does content marketing then it is delivering content that is useful for its end customers and doesn’t need to monetize the content with paid ads because the content is monetized by building their brand and selling their own products and services that is extremely relevant to the content and the audience. When a business does content marketing and then does a soft-pitch for the product or service that they are selling, it sells easily and the friction is much lower.
Media companies do not have a product. Their product is content which is given for free, or almost for free. And then they charge advertisers. A media company’s content channel is a platform that subsidizes one side of the equation (readers) and charges the other side (advertisers). But brands and companies (aka advertisers) no longer need that platform because they can now create their own content platform and reach their customers via content. (Like I am reaching you right now).
The oldest example of a brand using content marketing is John Deere’s furrow magazine. Instead of trying to advertise their products for farmers (such as plows) in other media channels he created his own media channel (the furrow magazine) and reached farmers who were his potential customers.
Farmers found his content useful and started taking a huge interest in it. After more than 100 years, the magazine is still in circulation and is the No.1 content channel for farmers around the world with millions of magazines getting distributed on a regular basis.
Adobe created CMO.com – a content channel made to attract marketers and brand managers. They publish content about productivity, data, design, IT and so on that will attract their potential customers to their brand. Instead of advertising Adobe on another media channel, they have created their own media channel and they are spending money on content creation which pulls in people. This is inbound marketing at it’s best.
If you couple content marketing with paid advertising (esp SEM) where you are advertising your content instead of your products, then your advertising will build trust with your audience and your content marketing strategy will be on steroids. I do the same. Instead of advertising my Digital Marketing Courses and Internship programs, I do content marketing to attract people. I attract people to my blog, my YouTube videos, my email newsletter, and social media channels.
Then I use this attention to build trust. And once the trust is built the transaction can happen which helps me make a profit. (Content, Attention, Trust, and Transaction).
I do run paid advertising (I am not against ads completely), but instead of advertising my products and services, I advertise my content. I am attracting people to my content first through all the available channels (including organic and paid channels). And I am not selling ads. I am selling something of my own.
You see the difference here?
Media companies will die because media companies do not have a product that they can sell and profit. Instead of converting the people who media companies have attracted to their content into customers, they are forced to sell their soul to other advertisers who will pay for their content creation by sponsoring their content. (As in paying for advertising).
That’s why Google is a genius because Google just helps people find content but doesn’t create the content by itself.
Publications who monetize their content creation with ads will die because now brands can become publishers and monetize their content creation with the sales of their own products and services. And when you sell a product that has high margins, you can invest all the profits in content creation instead of ads and you will put in place a compounding effect.
This effect can be multiplied if you put the content in a sequence and let the content deliver by itself to the right customer at the right time. Marketing automation and drip marketing is a topic for another day.
Digital Education is a highly profitable business with very high margins. That’s why most of the online education companies do not advertise their premium content on other channels. They do their own content marketing. Free blogs, free courses, free e-books, and so on become their best way to convert prospects into customers. Free content drives paid content sales. It’s the Freemium model similar to SaaS.
SaaS products and digital products that help businesses are also high-profit margin business because there is no cost of replication (almost). Most of the SaaS companies out there struggle to invest in paid advertising and content marketing in the initial days because they do not have enough revenue to invest in content marketing. A percentage of profits or revenue has to be taken from the sales of the software products and they have to be invested in content creation and production.
I have a feeling that the largest publication in the world will be the largest education company in the world and the largest software company in the world will be the largest education company in the world.
By the time people discover amazing content and then buy the education products, the investment in the creation of the content will be paid back with the sales of the education products. And now you have a huge list of customers who are ready to buy from you again. If you sell software to them, you are selling with zero CAC (cost per customer acquisition).
They say that the business that can spend the most to acquire the customer wins. I would beg to differ. I would say that the business that can get customers for free, forever, will win. Software companies, instead of trying to develop software and then advertise that software, should try content marketing and reach customers through their content. And if they can pay for their content creation by selling premium content to the same audience, then they will not have to pay anything to acquire customers for their product.
An SEO company selling SEO software can do good content marketing in terms of blogging and video creation related to SEO topics to attract customers. However, they would be limited by the amount of investment they can do in content marketing because the money comes from the sales of the SEO software.
Instead, an SEO company should first create content related to SEO, then sell an SEO course, break-even with the cost of content creation, paid advertising for boosting the content, delivering the SEO course, and then sell SEO software. This would be the perfect funnel for a software company because this funnel would literally get customers for free. And yeah, add a freemium model within the software as well which would boost things even more.
Free content fuels the audience into paid content. Paid content fuels more audience into free content. All the audience is fueled into a free version of the software, which fuels the free content and the paid content even more. And eventually, everything is fuelled into the paid version of the software. This is the ultimate funnel.