Bob Garfield is an editor-at-large at Advertising Age and a co-host of NPR’s On The Media. In his new book, The Chaos Scenario, he describes how the centuries-old traditional media landscape has been reduced to ruins in the digital era. We now live in a world, argues Garfield, where mass marketers, the mass media‚ even once-mighty network television are powerless. Online crowds now rule the day, with devastating, cruel and, occasionally, powerful results.
Q: You outline a number of problems facing the media industry. How much of the trouble is of the industry’s own making? Did it shoot itself in the foot by giving away everything for free online?
A: Yeah, I think so. Mass media companies, particularly newspapers, made a gigantic blunder a dozen years ago when they decided that the business model for the online world would be the same as the one that served it so well for 350 years, namely advertising supported. They decided that the name of the game was audience, and if they built the audience, they’d be able to sell advertising against it. Two problems: advertisers aren’t interested in all the eyeballs. There might be 10,000 New York Times readers in Indonesia, but it’s not going to do Bloomingdale’s any good. The greater issue is the problem of supply and demand. The glut of ad inventory is nearly infinite now because of the 200 million web pages around the world. That has depressed prices for ads.
Q: If papers just put up pay walls, wouldn’t there be enough people willing to pay for high-quality content?
A: People are accustomed to free content. The Times tried it five years ago and it so depressed traffic they decided to back off. But who knows? Maybe.
Q: The problem isn’t just old media, though. Isn’t YouTube doing the exact same thing newspapers did, trying to build an online audience with no way to make money?
A: That’s pretty much it. YouTube has a 43 per cent market share, which is great. But it’s 43 per cent of a market that [generates] very little revenue. They’ve got 43 per cent of next to nothing at enormous cost. The bandwidth cost is larger than the GDP of dozens of countries. It’s a futile enterprise. And this is a service that has changed lives and disrupted the media economy worldwide, and there’s no money in it.
Q: So what are traditional TV networks supposed to do? Do they have a future?
A: Not in broadcast. The brands have a future. They may figure out how to be in the program distribution business. But at a very scaled down level. I expect a couple of them to turn the lights out within the next five to 10 years. Their audience is fragmented to such a great degree that they can’t pay for the programming they previously distributed. They don’t have the money to pay for dramas and sitcoms.
Q: What about a model like HBO. I’m more than happy to pay for that because I like the programming they offer.
A: I think they are the only ones with a business out there. When the cable industry collapses, HBO will be well along the way to distributing, independent of cable, strictly online—selling subscriptions directly.
Q: So, the thing we need to come to terms with, you argue, is the idea of listenomics. Can you explain what that means?
A: In a world without mass media, all institutions—whether Hollywood or journalism or politics or religion—that have historically dictated their genius, world view, product line, etc., to the group formerly known as the audience will discover that that world is gone. You can no longer dictate to the hoi polloi the way things are going to be because they are not listening anymore. And they’re also firing back. The herd will be heard.
Q: You offered a pretty good example of that yourself when you went after Comcast over a horrendous customer service problem, creating an online, anti-Comcast movement called Comcast Must Die.
A: Exactly. The Comcast situation shows how quickly a mob can form that alters how a corporation does business. But that’s the smaller reason you have to embrace listenomics. The crowd can harm you, but there’s also so much value out there. You’re nuts if you don’t try to create two-way communication and get the benefit of this resource.
Q: Are there examples of people who have figured this out already?
A: Obama figured it out. He is as quintessential an example as you can find. He used his website to make money, to organize volunteers, to communicate, and to get people to develop their own social networks.
Q: In the corporate world, doesn’t listenomics just come down to the age-old idea of listening to your customers?
A: It does come down to the ‘customer is always right.’ Henry Ford said you could have any colour of the Model T, as long as it was black. Now the audience is in total control of who, what, when and where. That emasculates many an institution formerly known as ‘the Man.’
Q: Where does this put the old Madison Avenue ad firm?
A: They’re among the doomed-est. They are mass marketers in a world that will be devoid of mass marketing. The agency business model is built around the purchase of large media buys. It’s all about scale. That’s going away. Marketing is not going away. It will flourish. But not mass marketing.
Q: So what’s the future of ads? In your book you mention the Doritos campaign that featured commercials submitted by amateurs as part of a contest.
A: That was more publicity stunt than anything else. They figured that if you put a million monkeys with a million handycams, you’d come up with two or three funny commercials to [air] during the Super Bowl. It generated a lot of publicity. But it doesn’t fundamentally change anything. The idea for the digital world is not civilians with Final Cut Pro to try to imitate the industry that’s dying. The Internet’s promise is not to be a cheap amateur knock-off of the old world order. It’s to use digital connectivity to do things that you could never do before.
Q: So the ads we see on TV now, surely they will still be around for years to come?
A: It’s hard to know what falls away first in such a precipitous collapse. There’s still a network TV business and it’s still a little profitable. Though it does that by putting the Biggest Loser on 24/7. And things are going to start to spiral faster downward. But there will be some vestiges of all of this old media stuff for a number of years to come.
Q: There are some obvious negative impacts to the chaos scenario you describe, like the end of privacy online and an erosion of civilized discussion.
A: The digital revolution will be good for society. But there are two things that are horrible and everlasting. One is the idea that everything that lives on the Internet lives there in perpetuity. Secondly, while the whole world is worried about 1984, we’re getting Lord of the Flies. In a world of anonymity, people revert to their most primal selves. It’s a playground for the id. It’s vicious out there and most of us in one way or another are going to be victimized by defamation, hate speech, rumour, gossip, name-calling. You learn a lot about man’s nature going through the comment boards on any subject…any subject.
Q: And add to the list of negatives fewer forms of good entertainment.
A: Long form, high-production-value entertainment is going to be a very rare commodity for a very long time until someone sorts out a way to create a business model that will finance the cost of production. We’ve been three-and-a-half centuries with this perfect symbiosis of mass media and mass marketing that’s given us high-quality journalism, entertainment, you name it. But it’s not some sort of Newtonian law that’s provided it. It’s not in the Ten Commandments. There is no ‘thou shalt produce new episodes of Lost.’ It was an accident of economic history and it lasted a long time. But it’s over.
Q: So in the meantime, we get used to visiting the library and reading old novels?
A: Well, we’re still going to have lots of re-runs. We’ve got about 60 years worth. We’ll be fine.