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A Fragile Moment for Big Media

The growth of small players in the media industry is something we can’t ignore.

Szasz-Fabian Jozsef/Shutterstock

We’re living in an age where the underdog wins. Startups — and individuals with the mentality of startups — have the agility to shift massive industries. One need only look to Uber as an example of this. Now we’re seeing the same principle apply to the media industry, where small players are causing big changes as a result of the low distribution costs and high ad-revenue potential on social media.

More so than other industries, advancements in media are interdependent with advancements in technology. Technology informs how information is disseminated and shared throughout the public, and the media informs the trends on which technology gets adopted widely.

It’s for this reason that we’re about to see a huge shift in the layout of big media houses — a shift that we’ve already seen inklings of with the rise of freelance writers and YouTube stars. Little by little, major publishers are losing their power in a world that’s allowing individuals to generate a lot more revenue from their own content — with no middleman.

Among millennials and Generation Z, Facebook and Twitter are some of the biggest vehicles for media consumption. Just look to the new report from the Pew Research Center to see how quickly social’s importance in the news space is growing. Before the rise of social, media was consumed directly on content owner’s properties (e.g., in a publisher’s print newspaper or their website). Eventually, social became a huge source of traffic to their content. Now, with technology like Facebook’s Instant Articles, publisher content — and consumers who read and view this content — will remain on the social media platforms themselves, where revenue from advertising will be gathered and split.

Undoubtedly, one of the biggest forces driving this media shift is the changing state of revenue sources in the industry. Let’s take a look at history: For the majority of the 20th century, print reigned, with subscriptions and ads in hard copies making up publishers’ source of revenue. Now, digital ad revenue is the lifeblood sustaining nearly every media entity.

It’s only a matter of time before ad-revenue sharing occurs on more and more platforms, allowing individuals and smaller media entities to profit from the industry’s new revenue model. Many new social platforms have already optimized ad-revenue splits to the point where individual creators can rake in a substantial income. Look at YouTube, where enabling ads on your YouTube videos gives you 55 percent of the ad-revenue share. This split supports a growing number of publishers and creators — and catapults some like PewDiePie, who made $7.4 million last year. Soon, Facebook and other platforms will follow suit, like they’ve already done with ad-revenue splits on Instant Articles and native video.

This new model changes the place of big media houses, and it allows authors to find a direct source of revenue. In the past, there were great barriers for smaller players without as much capital to succeed in the publishing business; print took a larger investment, wasn’t as easy to break into, and wasn’t as simple as writing and clicking “post.” The story reads similarly for TV and radio; getting your own show is neither a quick nor simple process.

For authors and creators, we’re beginning to see a surge in new options to put their work out there and profit from it. Belonging to a large, renowned company won’t be the only way to be seen and make money. The middleman becomes an option, and not a requirement. The growth of small players in the media industry is something we can’t ignore, and they’ll soon be able to make money off of directly posting content to social media platforms where more and more consumers are finding their news.

Big media houses have given writers, artists and content creators the platform they require to be seen at all. But as social networks solve and scale monetization in a way that allows authors to directly publish and make money doing so, individuals and smaller publishers will have more power than ever in their own hands.

When you look at the influence and followership of many journalists today, you’ll see this is already happening. Sarah Lacy has nearly 30 percent more Twitter followers than PandoDaily, the publication she started. Yahoo columnist David Pogue receives double the interactions per tweet that Yahoo News does, with an even bigger difference when comparing his engagement to Yahoo Tech’s. Authors and creators are now able to make a name for themselves that rivals that of big media houses.

This isn’t at all to say that big publications and media houses won’t exist in the future. But the balance of power is tipping. Small publishers and creators are assuming major influence and making major profits on their own. While the prestige of big media companies will always carry weight, it’ll certainly begin to weigh a lot less. In short, “big” media just won’t be so big anymore.

Jan Rezab is the co-founder and CEO of social analytics firm Socialbakers. Reach him @janrezab.

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