Friday, July 19, 2013

Media in Canada - It's Momentum - And Achilles Heel


There's a saying that if you drop a frog into hot water, it'll jump out, but if you put a frog in cool water and heat it up slowly, the frog doesn't notice that it's boiling to death.  This reminds me of media in Canada.  The public tends to notice the quick changes - like a newspaper suddenly throwing up a paywall - but they don't notice the slower changes like the buyouts and mergers that lead to media content creators being swallowed up by the media distributors.

Creating media is an expensive proposition.  You have to pay for journalists, researchers, cameramen, sound engineers, photographers, editors, actresses, make-up departments, studio rentals, printing presses, and the list goes on.  Distributing media on the other hand is not quite so expensive.  It doesn't really cost that much more for Rogers or Bell to as an ISP keep the Internet line open to your home when you're there, versus when you're not.  However, when you hand over your cable or tv subscription money to them, they're handing over a big portion to the content creators.

The content in Toronto is created by the news channels, the movie and music channels, the sports teams that play games, the weather channels, and so forth.  So, for the content distributors to cut their costs whilst still obtaining the content creation, the option they chose was to purchase the content creators.

With very few exceptions, what we're seeing is that if people want to watch something on TV, or read something on the web, the distributors eventually feel compelled to buy it.

This is setting up a situation because whilst we're seeing a consolidation of services (why would Rogers have two content creators creating competing content?), the distributors are now relying increasingly heavier on advertising revenue to pay for the content creation (previously, it largely came from your subscriptions which was passed on - but now they can keep that money and double-dip).  

This situation is getting rather dangerous as it leaves a massive back door open in their plans, which is also wide open to abuse.

Example:
Imagine I create a Canadian media aggregator that leaches off everyone elses content.  Let's say it's news headlines.
People would then come to my site and see my advertising, read through all the headlines from the TV news sites, newspaper sites, local blogs, etc.  I'm now hauling in all that advertising revenue.  A person can scan all the headlines, and click through to the content at CP24, or a newspaper, and only then would the distributor see any revenues that would contribute to the content creation costs.

That would not be sustainable for very long.  What happens when that kicks in?  Well, judging by Washington Post, or NBC in the USA, first they sacrifice staff - then they sacrifice content creation quantity - then they sacrifice quality.  

That's really not in anyone's interests either.

Conclusion:
The scene is being set, but the public don't seem to have noticed it (see frog analogy at the top).  There's multiple back-doors that are gaping wide-open (I've only pointed out one, which is "leach and aggregate" for free) to undermining the whole house of cards.  I wonder how long it'll take for someone to walk through one of those doors?  I know that if I don't do it, someone else eventually will…. but I just have more productive things to do with my time right now.