VCs find value where traditional media can’t won’t

money2smThe venture capital research firm CB Insights reported this week that VCs are “Bullish on News: Funding to Media/Fat Content Startups Jumps 145% YoY.” Although it appears on the surface to have nothing to do with traditional media, that’s illusionary. VCs are always looking for problems to solve, and the problem here is where, how and through whom people everywhere get their news. And it’s really not so much about content as it is money, for the Net isn’t disrupting content, it’s taking money from local communities. That includes the pockets of traditional media.

According to CB Insights data, “digital news and media companies raised $813M in 2014. In 2013, startups in the space raised $331M.”

Investors appear bullish that the new wave of media startups relying on digital technologies can create sustainable (and hopefully lucrative) business models. One such investor, Chris Dixon, a partner at Andreessen Horowitz, wrote after a $50M investment into Buzzfeed:

I believe the future of BuzzFeed – and the media industry more generally – will only get brighter as the number of people with internet-connected smartphones grows, and the internet solidifies its place as the central communication medium of our time.

That’s $813 million that traditional media companies didn’t wouldn’t spend on development, because, in part, they’re convinced their brands will always give them a seat at the marketplace table. Meanwhile, what’s really happening is that, unrestrained by competition, pureplay websites continue to siphon off millions of dollars from the neighborhoods of legacy media. This has been the constant caution of Borrell Associates research data for the past 15 years. Newspapers are dying, and local television is being artificially propped up by cable retransmission fees, while their corporate owners are unable to respond with anything other that defensive comments.

I believe this will continue unabated, until something like private local ownership of media is resurrected and stems the tide. I just don’t see it happening any other way.

 

I Love It When A Plan Comes Together

Ateamsm“I pity the fool” is my favorite saying from the A-Team, the 80’s NBC drama/comedy featuring a team of actors with terrific chemistry. That line is from Mr. T, but the title line comes from the leader of the A-Team, actor George Peppard. It’s tongue-in-cheek, or sorts, because it was always used after something went terribly wrong, but the group ended up winning after all. I’m referencing it here today, because I want to share a couple of recent illustrations about my own prophecies from years past.

We’re at the dawn of the postmodern era, the age of participation (See my October 2003 essay, Participatory Journalism). While my industry, local TV, found my words fascinating, none of it made sense to them. I kept studying, analyzing and writing, but wherever I went to speak, people I was desperate to reach simply couldn’t grasp the concepts. Today, however, I can see things I predicted coming to pass, which both encourages me and makes me sad. “If only” is a phrase with much sorrow for someone who cares.

I live in Huntsville, Alabama, and while I once was the news director at WAAY-TV, my favorite TV news source is WHNT/News19. We got 8 inches of snow Wednesday and Wednesday night, so Thursday, the entire community was shut down. It was a very special snow day for families across the Tennessee Valley, and WHNT-TV led their evening news with clips and photos sent to them by average people (and some REALLY talented). In truth, the programs were filled with such stuff, so the reality was that everyday people produced the news that was on the TV station. This is what I’ve meant by the “Age of Participation.” Everybody is a media company today. Every. Body. And Jay Rosen’s “Great Horizontal” is pumping out content every hour of every day. What was “the news” yesterday here in Huntsville? Grown-ups and kids playing in the snow. The sun came out. It got up to 42 degrees. Roads cleared quickly. And through it all, everybody (well, nearly everybody) had the day off.

the dress

Then, there’s the story being featured nearly everywhere of “the dress” that’s gone viral. What color is it anyway? Is it blue and black or is it white and gold? It began as a question posed by the everyday owner of the dress on Tumblr and spread like wildfire after a Scottish entertainer passed it along. Even major celebrities got in on the act, people like Taylor Swift and, of course, Kim Kardashian. The mystery was solved by another everyday guy who simply tilted the screen of his laptop back and forth. Science then got in on the act, with Wired calling it an optical illusion.

The point is that “the news” is increasingly created and reported by you and me. Meanwhile, the debate over “real” journalism marches on, something I would suggest is a pretty serious waste of time. I mean, what IS “real journalism” anyway? The professionalization of the press is less than a hundred years old, and it has led to the cultural mess we have today, because “the pros” covet celebrity (I mean, CBS led the friggin’ Evening News with Bob Simon’s death – led the news with it! Really!).

We’ve lost our way, folks, but I trust the people to eventually find a way to keep each other informed about what’s important. The only issue is access, but that, too, has become a part of the Age of Participation.

The people formerly known as “the audience” are a whole lot smarter than we ever thought.