Facebooktwittergoogle_plusredditpinterestlinkedinmail

It’s little secret that the popularity of major media outlets has taken a hit in recent years as more TV viewers than ever cut the cord and seek out niche media outlets. Add to that the struggle print media has faced with the prevalence of the free 24-hour-news-cycle ushered in by the digital age. The environment for traditional media outlets has in fact become so grim that profit margins have declined by as much as $30 billion in the United States alone in less than a decade.

“In 2005, U.S. newspapers earned $47.4 billion in print revenue and $2 billion in digital revenue,” notes tech writer Adam Rowe. “In 2014, they earned just $16.4 billion in print revenue and had only pulled their digital revenue up to $3.5 billion.”

 

As Rowe points out, there is some positive news, which is the $1.5 billion in earnings gained through the digital sector. However, it is hardly comparable to the almost $50 billion these companies were bringing in 2005.

 

While traditional media outlets and platforms have struggled to remain relevant and lucrative in changing markets, new media providers have been extremely successful to leverage their uniquely tailored style into niche advertising and marketing dollars.

 

Media-streaming giant Netflix, for example, reported earning $2.2 billion in revenue for the third quarter alone this years, thanks largely to the more than 86 million subscribers the company has around the globe. The success experienced by Netflix and other new media platforms is indicative of the new tech savvy consumer who wants an interactive media relationship.

 

“We’re now living in a direct-to-consumer environment, and media operators are trying to figure out what that means,” notes the most recent CB Insights data. “This push for easy access has led a lot of brands — including Verizon, NBC, Time Warner, Comcast and several others — to put money into startups.”

 

Despite the new wave of media startup investments being touted as new hope for the media sector, many analysts believe it is more a mutually beneficial arrangement as venture capital for startups is getting harder to secure.

 

According to Lexie Lu, a graphic design freelancer and entrepreneur, startups can learn a lot from the media sector like: “How to use the voices on your team, how to tailor your social media use to your values, how to connect directly with what their customers need, how to develop a company culture, and how to rely on a clear leadership structure.”

 

Well-known Canadian venture capitalist and executive G Scott Paterson also agrees that the media business model has many valuable lessons that the saturated startup sector can benefit from. However, Scott Paterson also believes it will be a synergetic relationship that leverages the innovations offered by emerging startups to boost media sector revenue, audience engagement, content generation and delivery options.

 

Supporting the ‘Content is king’ notion that Scott Paterson and others have highlighted in the past, as demand continues to grow for niche media, the market for unique content is also expected to grow, which is helping to give way to a new media renaissance of sorts, where digital content is immediate, personal and interactive.

Last year, more than $3 billion was spent around the globe on media startup investment. If 2017 is anything like 2016, then we can expect that number to grow through the investment of major news outlets and VC funds.

Facebooktwittergoogle_pluslinkedinrssyoutube