The "Grand Canyon" Facing the New Media Industry

While I was gazing at the Grand Canyon from its south rim last week, it occurred to me that the yawning gap in the earth in front of me was the perfect metaphor for how much the media business has changed over the course of my career.

There simply is nothing much left of the world as we knew it in the early seventies, when I relocated across the country to San Francisco to help launch a new magazine.

Then, we used a combination of three main revenue sources — advertising, subscription, and newsstand sales — to offset the cost of printing and distributing our product. One of our main business concerns was the pending elimination by the Nixon administration of an inexpensive U.S. postal rate for publications, motivated (we assumed) by the desire to drive the growing list of alternative magazines and newspapers out of business.

It worked.

Almost forty years later, I talk to the people starting up new media companies every week, and none of them are concerned with postal rates, printing expenses, or distribution costs, because none of those line items matter anymore.

Instead, they are focused on growing their online audience share, lowering their cost of content, providing premium upgrade options, and monetizing their growing content databases with SEO, UGC, and networks of blogs, which have suddenly acquired an indispensable status inside many media companies, old and new.

It’s as if, viewed from the south side of the Grand Canyon, the experimental business models fueling media startups have moved across to the north rim. You can see it, sort of, but there is not any real way to get there from here.