I have always loved the publishing business. It started in my teenage years in Denver, getting up at 4am, snow or shine, to deliver newspapers to 250 doorsteps. Once the job was complete, the cycle started anew. The next day edition was already in process; content being created, edited, packaged, printed, stacked and dropped on my driveway for me to distribute every 24 hours. Amazing.
My passion developed further during my 20’s and 30’s when I worked on Wall Street as an equity research analyst, covering the public companies in the publishing industry. I was fascinated to learn about the families and media titans that had come to control the business, and came to more deeply understand the economic juggernaut of limited competition in each market.
These two defining characteristics—a 24 hour manufacturing business and geographic market ownership—have given way to the tidal wave of digital in the last fifteen years. Amidst the off-line ashes from these wrenching changes, the phoenix that is rising is a merging of social signals with online news. What is so fascinating to me is that what is often chalked up to yesterday’s industry, may actually have its greatest growth in the years ahead as people increasingly take on a curation role, and social networks and content discovery are becoming more inexorably intertwined.
Marc Andreesen’s blog post from last summer is a great starting place for this discussion. In it he notes, “Market size equals destiny. The big opportunity for the news industry in the next five to 10 years is to increase its market size 100x AND drop prices 10X. Become larger and much more important in the process.”
I think he is right. On the demand side, people inherently care about what is going on in their communities and want to make sense of their world. This is basic to the human condition. Abraham Maslow called them cognitive needs. This demand is growing more global and 24 x 7 as communication and mapping technology make the world a smaller place and as digitization and search technology can surface information instantly.
Supply factors matter too. The amount of news being produced and the velocity with which it is being distributed is skyrocketing. Distribution has become open and the barriers to write and publish are disappearing. And smart phones (computers in every pocket) have massively increased accessibility.
The economic barrier in the old world publishing model of bundling content to command higher pricing, is the dam being washing away in this digital deluge. In its place is an atomized content world—just as albums have given way to a la carte song purchases, and television content can be bought by the episode on Amazon rather than in a pricy cable package, so too, are articles available dis-intermediated from the publisher.
Also contributing to the breaking of the bundle is the fact that the primary remote control to access digital content was through a Google search. Those very loyal to a certain publisher might go to their URL directly, but a quick query in a search box instantly delivers good results, decoupled from the rest of the publisher’s content.
When digital content is accessed in this way, however, they lose the curation that serves as a quality screen to the reader. People now have content at their fingertips, but they have to wade through long streams of search results, RSS Feeds, timelines and tweets to get informed about their world, which creates anxiety.
In its absence, social signals and commentary from people we know and trust are beginning to take its place to deal with content overload. In the simplest form, these take the form of “likes”, or retweets, but they can also include a line or two of editorial introduction from a friend with a forwarded link to selected content.
As a result, we are seeing a significant trend toward content discovery in social networks. This article shows that close to 35% of all news is discovered via social networks. Pew Research shows similar trends in addition to how social media is changing consumption habits.
Search is still an important way in which content is discovered, but especially in mobile, where search use is less intensive, social networks are becoming much more important sources of traffic referral.
There is a chicken or the egg question here. Are people discovering news from their social networks because that’s where they are hanging out all day, or are they going to their social networks in part to see what their friends and followers are saying about news content? I think the answer is both, perhaps related to demographics.
I go to Paper much more frequently than I go to Facebook, specifically to see what content my friends are forwarding and commenting on, and I inevitably discover interesting content that I missed from my other channels. Others—like my kids—may just be sitting in their social streams for other reasons, and happen to see interesting content tidbits float by that piques their interest.
The Competitive Flywheel
Competitive reactions to these forces—an expanding market for content in which social signals are increasingly replacing or supplementing the role of the publisher—are striking. Social networks are getting into content, content companies are becoming more social networking savvy, and content aggregators are pulling in social streams and signals for curation.
For example, in addition to Facebook’s stand alone Paper app, we see LinkedIn’s purchase of Pulse and the development of its influencer network and publishing platform to encourage original content generation. Twitter’s recent attempts to better curate its endless timeline fire hose (“while you were away” and “what’s trending in your network”) are other examples of a move toward curation.
Even Snapchat is getting into the game. Their approach is more as an aggregator of professional content—applying hip, pithy titles and presented in short video snippet formats—than via social signals. But its success will depend on its large and growing young social network for traffic.
Symbiotically, new and old content companies that understand best how to use social media channels to make sure we see their stories are emerging. Brands like the Huffington Post and BuzzFeed, which are less than 10 years old, now attract significantly more monthly online users (115 and 75 million respectively) than the digital versions of The New York Times and The Wall Street Journal. Emerging brands like The Verge and Upworthy are also gaining steam, fully taking advantage of mobile platforms and the social traffic streams of Facebook and Twitter.
Content aggregators—like Flipboard, SmartNews, and Reddit—which present content created by others, also understand the role of social cues. Some or all of their content draws from social streams and they rely on social signals to highlight and promote trending or popular content. These brands and many others have sprouted up like mushrooms after the rain taking advantage of the merger between news and social media. There are at least two dozen products that have emerged in the last year in this aggregation category.
Not only is news being distributed by social commentary, but social commentary is becoming the news. In this video, Sheryl Sandberg and Megyn Kelly discuss how social networks change the network news game by requiring analysis and context. Similarly, CNBC just ran a segment on Kat Gonso’s letter to Netflix to release House of Cards early because it was buzzing all over social media.
Looking forward, I believe this ecosystem will continue to evolve and that social signals will become increasingly embedded into content consumption and discovery. Even though the market has evolved, many people still feel under-informed and overwhelmed by this atomization.
A few concluding observations as these dynamics unfold:
· High quality content: The market for high quality content to be produced and shared will continue to grow; those who deeply understand and take advantage of social traffic flows and curation and marry that with quality news generation will be the largest. And users will highly demand trusted curators to feel more informed and less overwhelmed.
· Social networks will increase their role further in directing traffic to content, significantly surpassing search on mobile form factors and their algorithms to separate wheat from chaff will become more sophisticated.
· M&A: The idea that others have suggested of Google buying Twitter makes some sense viewed through this lens. Search was/is the remote control of the web world and Twitter is increasingly playing this role on mobile devices. In fact, I wouldn’t be surprised to see a social network acquire a major next generation content company to more finely tune editorial content to its mass audiences (like Costco offering its owned quality Kirkland brand on its shelves while also merchandising other brands).
· Independent content aggregators and original creators will need to embed social features and high quality curation much more deeply in order to attract users on a daily repeat basis and to compete effectively with social networks for content discovery. Some may find success with game-like features that make usage more habitual. Others will likely be sold or shuttered if they don’t attract habitual use.
· Next generation content platforms may emerge that take social engagement around interest areas farther than they do today, creating new social graphs around common topic areas. There are ad hoc “social networks” of interested people in the invisible network map of how news stories are spread across Twitter that next generation content companies may proactively highlight and utilize—or develop on their own. And there are invisible social networks within news stories—connected people and affinities—that can be harnessed as a form of curation around key interest areas.
In time, I can imagine a world in which news will travel and be curated online across both defined social networks—as it does today—but also impromptu ones that form around a story, a news cycle, or a common interest. These may change and re-form from day-to-day and hour-to-hour. For consumers, getting the right trusted curators removes friction from the experience of endless streams. Back to the future, this may represent the next step in what Economist was talking about in terms of how news once traveled through coffeehouses and social groups before mass distribution. Buckle your seat belts, this area promises to be dynamic and interesting in the years ahead.
Also published on re/code