The year ahead for the media business with Sara Fischer of Axios
Jan 9, 2024
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Axios senior media reporter, Sara Fischer, discusses the value of identifying patterns in the media business, the challenges of AI to publishing businesses, and how debt will drive consolidation of streaming services in the year ahead.
The media industry is facing an existential threat from AI-generated content, which could jeopardize the relevance and necessity of traditional articles.
The media landscape is undergoing structural changes, with a shift towards subscription models and experiential events to adapt to changing advertising expectations and boost revenue.
Deep dives
Challenges for Publishers in the Era of AI
In the era of generative AI, the question arises: do people still need to read articles? The potential impact of AI on the publishing industry remains uncertain, particularly in terms of licensing and copyright. Publishers could find themselves in a perilous position as AI-generated content becomes more prevalent. The industry is going through a transition, leaving the previous era behind and moving into an uncertain future. AI compounds existing anxieties within the media industry. However, despite the challenges, there are still solid media businesses thriving. Niche spaces are carving out a smaller but sturdier future. The rise of companies like Semaphore, Pug, and Punchbowl reflects this trend.
Main Trends in the Media Industry for 2023
The media industry experienced difficulties in 2023 due to several main trends. Firstly, the era of cheap money came to an end, making it harder for slow-growth media startups to raise venture capital. Secondly, there was a streaming slowdown with the number of streaming services competing for viewership hitting a plateau. This is likely to result in consolidation in 2024. Thirdly, the digital ecosystem is caught between the deprecation of third-party cookies and the rise of generative AI. These trends, though flagged in 2023, are expected to have a larger commercial impact in 2024.
Structural Challenges and Changes in the Media Landscape
The media landscape faced structural challenges in 2023. The advertising slowdown experienced by media companies is actually a return to normal growth rates after the digital shift of the past decade. Many digital-first publishers relied on double-digit growth and cheap programmatic advertising revenue, which is no longer sustainable. Additionally, the consumer expectation for advertising experiences has changed, necessitating a shift away from intrusive advertising methods. Subscription models and events have gained importance. Subscription-based media businesses are focusing on delivering lifestyle services and insights to boost revenue. Events have become key for experiential engagement, though caution regarding saturation remains.
To kick off the year on The Rebooting Show, I spoke to Axios senior media reporter Sara Fischer about the main themes of the year ahead. Among the topics we covered:
The value of identifying patterns from the torrent of news
The unrealistic expectations of the ZIRP/scale era
Cyclical challenges vs structural changes
The wasteland of general interest publications
The existential threat of AI to many publishing businesses
AI’s impact on the non-content aspects of the publishing function
How debt will accelerate the inevitable consolidation of streaming services
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