I think we all have a clear view of who built the most amazing and enduring media empires over the last several decades. But even after watching the unfolding of the Upfronts and the NewFronts this spring, I was struck that we don’t yet have an earthly clue as to whose creation will become the next one. Twenty years into digital media, not one new media company has come even close to establishing a content brand worthy of Disney, Murdoch, Hearst or Newhouse.
And with digital media’s comparatively fragmented audiences and tiny margins, it’s almost hard to imagine achieving such epic proportions today. Which makes me all the more curious: When (and if) the next great media empire finally arrives, what will it look like?
The battle to define the next generation is on, and to date we’ve seen three forms of contestants: the platforms (Facebook, Twitter), the portals (AOL, Yahoo) and the independents (Vox, Say Media). Where would you place your bets for the next 20 years?
1. Biggest Winner to Date: The Platforms
While the last decade has brought challenges (to say the least) to traditional media companies, it has been a golden age for the technology platforms that reach audiences online. Facebook, Twitter, Netflix, Hulu, iTunes, YouTube and Amazon have won the lion’s share of our content-surfing attention, and they’ve been rewarded with an influx of ad dollars and subscription revenues to match.
Of course, none of these platforms is a media company — at least not in the sense that one of them built a business on its own original content. The definitive stance of Twitter’s CEO Dick Costolo — “I don’t need or want to be in the content business” – has been echoed repeatedly by the leadership at Facebook and Google. Hulu, Netflix, iTunes and Amazon may claim more of a kinship with media, but at the end of the day they are still (with occasional exceptions) merely conduits for someone else’s content.
True media brands win over the hearts and minds of audiences with a unique point of view. Platforms, on the other hand, are mostly dumb but useful pipes. They get people the content they want, and they’ve won hundreds of millions of users that way. But they sure aren’t content brands. Technology can aggregate an audience, but it takes personality, a point of view and original content to build an empire.
2. The Original Digital Promise: The Portals
Back in the v1, the portals were platforms. They combined three must-haves: a dial-up connection, an email account and a start page. They drew a massive audience with these killer apps, and along the way they built content and advertising revenue streams and considered themselves in the media business.
But despite their enviable combined reach of 460 million users monthly, the portals today have an audience problem: They are no longer genuinely earning their audience. It’s what Alex Berg calls “the Mazda syndrome”: You don’t choose a Mazda; you end up with a Mazda. (Thanks for the 2001 626, mom, I promise to drive it until I can afford something else!)
By and large, users aren’t coming to portals for the content; they are coming to log into the legacy email account that is more cost than benefit to change. While they’re there, they click on a story. According to comScore data, almost 70 percent of the visitors to Yahoo’s media properties came from Yahoo Mail.
The portals have both content and audience, but most of their audience isn’t there for the content. And since portal email use has declined 30 percent in the past four years, that missing link is becoming more and more of a problem. You can’t build an empire on an unstable foundation.
3. Honorable Mention for Brand Purity: The Independents
Portals, platforms and legacy media companies maintain their extensive reach — their single greatest advantage with advertisers — by providing mass content to mass audiences. But this broad-not-deep approach left an important gap for new entrants to fill: Independent publishers like Buzzfeed, Mashable and Vox’s The Verge saw the opportunity and brought tailormade content to niche audiences on the Internet. In turn, they were rewarded with fierce brand loyalty, viral sharing and exploding visitor growth.
While the top independents have been huge successes with their audiences, they now occupy a tweener role in digital media: big enough to be meaningful, but small enough to be of “questionable scale,” as the technology folks would say. Relative to the portals and the platforms that see hundreds of millions of visitors monthly, the independents are tiny fish in a huge sea of entertainment options.
In fact, it’s impossible to build empire-caliber scale on a single media property. What a media brand needs is a portfolio of properties — it’s the only way to earn premium pricing from advertisers and to leverage your brand into new revenue streams.
The independents are off to a good (albeit small) start with strong brands and loyal audiences. After all, before there was the Disney empire, there was a mouse on a sketchpad. We all start from somewhere.
4. Combine Ingredients, Mix Well
Chances are that the ultimate next-generation media company won’t be one of the independents we know today. But it won’t be a portal, either, nor will it be a platform. The next media empire will almost certainly have attributes of all three.
Advice for aspiring emperors: Take a cue from the platforms and become masters of distribution. From the portals, learn to build massive audiences in order to serve advertisers and build a true network effect. Like the independents, value and exemplify brand purity — the kind of purity and spunk that also, ironically, built the greatest media empires of yesteryear.
Ultimately, a media company’s strength lies in the brands that it builds. Those great, big, beautiful brands that draw their own audiences at scale are the prize of the industry. But the road to get there? It will take amazing content with great distribution and killer technology. Now that’s a foundation for a new empire.
This story first appeared on Ben Elowitz's Digital Quarters blog.