Interestingly enough, Wolff does not mention Newser in his new book that takes on new media and declares it a loser to old. As the title suggests, “Television is the New Television: The Unexpected Triumph of Old Media in the Digital Age” posits that the digital revolution is over – and TV won.
That thesis probably has nothing to do with the fact that Wolff’s own dive into new media – aggregate the reporting work of others and flip it in a traffic play based on SEO and clickbait headlines – has been a failure.
In fact, that experience supports his argument that digital media has become a race to the bottom, with CPMs (the rate of advertising, or “cost per thousand”) in continual decline, forcing digital media organizations to chase ever-increasing traffic numbers. The lower CPMs spell death for sites that don’t have either direct advertising buys by major brands or hundreds of millions of monthly page views, and preferably both.
Hence, TV – with its relatively more robust advertising rates – won.
But that’s not the whole story, which is usually the problem with what Wolff has to say.
The fact that digital mass media is facing downward pressure from advertising is true. But the idea that TV has therefore won is an absurdity. The subtitle of Wolff’s book suggests a definitive outcome in media, which is still in the throes of the digital reconfiguration. It was not long ago when MySpace was still an important content platform. Snapchat barely existed two years ago, and is now deeply in the content space. Unbundling is a reality as network audiences shrink year to year.
And the very definition of what constitutes television seems to change every day, as Netflix, Amazon and others jump in to create high-quality programming for their digital distribution platforms.
So where are we on media? Wolff points out that it has been years since a major digital media sale has come down the pike, such as when The Huffington Post was sold to AOL for $315 million in 2011. Instead, the hot sites achieving mass reach are Buzzfeed, with its fancy algorithms and traffic-driving cat videos, and Vice, with its contradictory traffic numbers and high-yield branded content production side.
“Digital media has created, perhaps inexorably, an ever-larger, ever-more-low-value audience,” he writes.
But not all digital media are the same, as my own experience at TheWrap bears out. Niche media companies like this one don’t base their business models on scale. Instead, they appeal to advertisers that want to be visible to influential and passionate readers drawn to their subject matter. Advertisers will pay a premium to reach those readers, and our rates haven’t gone down. (Though they will if we reach the kind of scale that Buzzfeed achieves. An aspirational problem….)
In a recent dismissal of Re/code’s sale to Vox, Wolff claimed that the site run by Kara Swisher and Walt Mossberg Recode is “generously” making less than $50,000 a month off its 1.5 million visits a month, against a payroll of closer to $300,000 a month. But he leaves out the most important part of Re/code’s business – its must-attend, sold-out conferences, with ticket prices in the thousands of dollars and sponsors out the door. Wolff parenthetically notes, “(Re/code has, too, a conference business, of unclear profitability.)” In fact, Re/code’s conference business makes millions of dollars per year.
A niche digital media company such as Re/code or TheWrap does not rely on scale for a profitable business model. It does rely on a core category of endemic sponsors and advertisers.
So what about old media? Television, Wolff suggests, isn’t sexy, but it’s far more reliable as a mass distribution platform, and makes tons of money.
Like most of Wolff’s arguments, this one is partially true. As a media observer, he is in the frustrating habit of taking a valid point of view and pushing it to an extreme that is simplistic, easy to reduce in a headline and ultimately wrong. (Ryan Chittum in CJR does a good job of pointing out how often Wolff is sloppy or contradicts himself in his on-air and in print pronouncements on media. Ouch.)
It is folly to say that television is anything other than fundamentally challenged. Networks reach ever-diminishing numbers of viewers who cut out the ads by delayed DVR watching. Cable channels are facing the ongoing unbundling of their world.
But, sure: advertising rates in television are stickier than digital. And retransmission fees have offered broadcast networks a significant new revenue stream.
The upshot for me is that the digital revolution is far from over. Media is complicated, challenged and damn difficult. The business model that will ultimately hold sway is not yet in focus.
Where we seem to be headed is a multiplicity of platforms, a need for diverse and creative revenue streams and a willingness to cross-pollinate the success stories from one medium to another. Wolff should hope there are business models to go around for all.
And since I brought it up, here’s the video of that aforementioned pissing match: