The Time Has Come to Abandon Shovelware Strategy. What to Do Instead.
In today’s newsletter, I’m going to post to all its free subscribers the entire contents of what I’d normally provide only to my paying subscribers. In fact, this is the first time that I’ve ever freely imparted teaching and he paid quintessence of what I’ve learned during my past 33 years full-time advising the Mass Media industries how to adapt to the introduction of personal computer-mediated technologies into the media environment.
Why do I give away information that I can sell? For two reasons that together make 2026 a momentous year for the future of those industries.
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My first and foremost reason is ‘The Emperor’s New Clothes’. A profanely naked fact is that the Mass Media industries are in grave, existential crises. Billions of consumers have ceased using printed periodicals and terrestrial, cable, or satellite broadcasts and switch to using online media. Although the industries were originally skeptical that consumers would ever do so, during the mid-1990s the industries launched an adaptation strategy (which I’ll describe below) whose goal was to compensate for that possibility and lucratively sustain the industries in the 21st Century.
Their adaptation strategy is a blatant catastrophe. The billions of consumer who switched their media consumption habits to online didn’t use the Mass Media industries’ websites anywhere as frequently and thoroughly as they had used the industries printed products and broadcast services. Instead, most consumers routinely use the online services of new enterprises that weren’t initially founded to be media companies but from whom those billions discovered that they could receive individuated feeds of news, entertainment, and other information, that better satisfied each individual’s unique mix of informational needs, interests, and tastes than any Mass Media company’s website (or practical combination thereof) could do. The overall result of using that faulty strategy for 30 years are that the Mass Media industries have lost 60 to 75 percent percent of their consumers, their advertisers, and their annual gross revenues.
Those huge failures flummoxed the Mass Media industries. My March 19th newsletter mentioned that Nielsen data proved ten years after this strategy was launched that it had failed. Yet the Mass Media industries’ executives have obtusely continued it for a further 20 years, despite now decades of empirical evidence (as well as red ink) reinforcing the proof if its failure. Like an orchestra of zombies mindlessly playing ‘Nearer, My God, to Thee’ while their titanically misguided industries sink, these media executives ‘manage decline’ as if it is normality and that they have no other choice or ideas what else to do. The situation raises grave questions about their acumen and intelligence. Intelligent businesspeople in other industries would have declared the strategy’s naked failures long ago and switched to better. Not the zombies hidebound in Mass Media corporate suites.
My second reason is that this year the technologies, costs, and ease-of-use of what I know to be the correct and true strategy have become available, affordable, and readily usable. Will the venerable but sclerotic Mass Media Industries grasp these and their capabilities as life rafts that carry them back to sustainability? Or will they overlook these and ultimately be sunk? Let it be the former, because I’m shifting the focus of my consulting from the identifying problems to implementing the solution.
So, let me solve the problem for you all. I will need to:
- explain the Mass Media industries failed strategy;
- articulate why three commonly proposed alternative strategies are illusory;
- state four tenets that any true solution must be based upon;
- what content creators, consumers, and advertisers require from the true strategy;
- encapsulate the true solution;
- describe how any media company can now afford to implement and operate this strategy (I’ll use the example of a small daily newspaper);
- outline editor’s new role;
- explain what media academicians must do to catch up to the epochal changes underway; and,
- explain why the search engines and social media companies that nowadays dominate audiences and advertising spending online will likely do so only another 6 to 12 years.
All that said, there is no practical way I can fit into this single newsletter edition all of what’s necessary to understand the new adaptation strategy and why it is logically so. Thus, what you’re now reading will contain #1, 2, and 3. On Monday, I’ll send a second newsletter containing #4 and 5. One week from today, I’ll send #6. And a week from this coming Monday, a newsletter with #7, 8, and 9. I’ve already written all four..
Let’s now move toward the solution…
The Mass Media Industries’ Myopically Misguide Online Strategy
I’ve unequivocally stated in previous newsletters that nearly 20 years of empirical data and declining financial statements unambiguously prove that the myopically misguided strategy which during the mid-1990s the Mass Media industries implemented in their attempt to adapt to the introduction of personal computer-mediated technologies into the media environment has been disastrous.
Nearly 20 years ago when I began teaching New Media Management in graduate school (which coincidentally was also the year when Nielsen//Netratings data began showing the strategy was misguided), I began calling this strategy what it clearly was: the ‘Shovelware Strategy.’ It simplistically assumes that:
- websites and webpages are online equivalents of printed editions and printed pages, or the online equivalent of radio or television broadcast channels;
- consumers and advertisers will use these websites the same ways (i.e., as often and thoroughly) as they had with print or broadcast;
- the past century’s business models for print or broadcast would operate the same on these websites as those models had in print and broadcast;
- and the Mass Media industries would thus earn the same revenues from online as they had from print and broadcast. In fact, most or all consumers shifted to online, then the Mass Media publishers could eliminate their expenses of purchasing, printing, and paper products and Mass Media broadcasters could avoid the regulator hassles and expenses of operating transmitters on public airways. This could make online media even more profitable that printed or broadcast media had been.
So, the industries simply shoveled their Mass Media theories, doctrines, business models, products, services, and practices of the waning Industrial Era into the personal computer-mediated technologies of the dawning Informational Era, and hoped everything would work.
It is a catastrophe. Examine the experience of the U.S. newspaper industry, the Mass Media industrial sector that has longest used to the Shovelware Strategy. During the past 20 years, as most Americans shifted their media consumption to online, this industry lost three-quarters of its readership, advertising clientele, and annual revenues. In 2006, its gross annual revenues were $55.70 billion, but will be $20.3 billion this year. And if you adjust those figures for 20 years of inflation, the real annual revenue loss plunged from $85 billion to $20.3 billion (-76%). Within that $20.3 billion are what revenues use of the Shovelware Strategy did generate: $8 .6 billion annually (of which more than $1 billion is by The New York Times alone) after 20 year of its use. Will the Shovelware Strategy’s revenue grow ever save the U.S. newspaper industry? Unfortunately, no. It might ultimately save The New York Times, but the Shovelware Strategy’s annualized growth rate these past 20 years has been a mere 0.3% for the U.S. newspaper industry which have been declining at an annualized rate -1.3% during the same period.
Any media executive who claims that the Mass Media industries long-term usage of the Shovelware Strategy is succeeding has his head stuck in the sand and needs to have his delusional ass kicked out of the industries. Continued use of this calamitous strategy calls into question their intelligence and acumen. Savvy businesspeople would long ago have admitted its glaring failure, found a better alternative, and be leading the Mass Media industries into sustainability and lucrative success. Instead, apparently braindead zombies who stagger about plush corporate suites are mindlessly undertaking these industries’ grave decline.
Why are their awareness and thinking so dead? My more than 30 years f experiences dealing Mass Media executives has led me to believe the reason they persist using this blatantly failed strategy is cognitive blinkering. They not only ‘can’t see the forest for the trees’, but most of them latently assume (despite huge evidence to the contrary) that the Industrial Era’s theories, doctrines, and practices of media—all of which they’ve shoveled into online—are the ultimate evolution of media, the ne plus ultra, and that there is no better path, so if the Shovelware Strategy has failed, there is nothing they can do, no alternative. So, they manage the decline.
So then, what do I propose they do instead ?
First, Avoid 3 Frequently Proposed Strategies That Are Mirages
Three alternative strategies are frequently proposed (mainly by journalism pundits or professors who lack first-hand experience or academic credentials in Media Management). Unfortunately, all three are equally simplistic spinoffs of the Shovelware Strategy; avoid the fundamental reasons why that strategy has failed; and thus can quickly be quashed and discarded:
The Philanthropic Reliance Strategy. Some people have proposed that billionaires, centimillionaires, or not-for-profit organizations should purchase and underwrite dying Mass Media companies. This strategy isn’t a cure; it’s a crutch. It is akin to connecting dying patients to Life Support systems. There are more than 900 daily and 4,300 weekly newspapers, 10,000 radio stations, 1,300 television stations, and scores of television networks in the U.S. (nonetheless the numbers worldwide). Are there enough willing philanthropists to underwrite all? Consider the exhaustion of those who have. Amazon founder Jeff Bezos, who was once a newsboy for The Washington Post, is now one of the five richest people in the world, and who in 2013 purchased that newspaper company, recently cut a third of its staff because he has grown tired of underwriting its accrued losses which now total more than double the quarter-billion dollars he paid for the newspapers. Likewise, Patrick Soon-Shiong, the bio-tech billionaire owner of the Los Angeles Times since 2018, is attempting to raise outside funding to keep it operating. Philanthropy only comes from a few and only goes so far.
The ‘What Works’ Strategy. Some people have proposed the solution to be finding and emulating the few Mass Media companies that have had some success using the Shovelware Strategy. This superficially might appear to be logical. However, its proponents apparently aren’t aware of Survivorship Bias. The laws of statistics predict that there likely will be identifiable examples of ‘what works’ even in the case of a failed strategy, but that those outliers aren’t applicably relevant. (Mathematician Abraham Wald’s counter-intuitive analysis of where to armor combat aircraft during World War II is a stunning example of why avoiding the Survivorship Bias is vital to finding the real solution.) A true solution will work for most, if not all, cases rather than just the outliers that survive. The outliers in this case are the developed nations’ national newspapers and some entrepreneurial websites run by small teams who work in unusually prosperous town or suburbs, etc. What these outliers have done has already not worked during the past 20 years in more than 95 percent of American communities. So, why then would someone think that their business models will now work? Don’t be seduced by Survivorship Bias.
The Entrepreneurship Strategy. Some people have proposed that journalists and other media workers who become unemployed, as well as people who want to enter the media industries, shouldn’t rely upon employment by media companies but instead learn entrepreneurship and work for themselves or even start their own media companies. As a postgraduate business professor since 2007, I have nothing against entrepreneurship. Ever since Johannes Gutenberg, most Mass Media companies were founded by entrepreneurs (including the daily newspaper my great-great grandfather founded in 1877). However, anyone who teaches entrepreneurship without first clearly knowing the ultimate reasons why teams of individuals (such as journalists or other media workers) are becoming unemployed, is engaged in malpractice. (In fact, I’ve found it notable that many media entrepreneurship courses are being taught by instructors who have never run a media business nor ever long been viably self-employed it.
Four Towering Tenets Anyone Formulating The Strategy Must Accept
When I stated that most Mass Media executives ‘can’t see the forest for the trees’ and seem cognitively blinkered, I didn’t mean only about the results of their Shovelware Strategy. They also need to perceive and acknowledge four landmarks clearly visible in the panorama of changes underway in the media environment. Only then can they be able to lead their industries towards sustainability and success online.
- A Truly Epochal Change. The single greatest problem that I’ve found during my 30 years of consulting to Mass Media executives is that most myopically misperceive now as merely a more ‘digital’ version of the decade in the past when they started their careers (hence their belief that the mid-1990s ‘Shovelware Strategy’ might still work). Perhaps that is human nature. Change, when it occurred at all, happened slowly during in the past 10,000 years. Not anymore. Most educated people now know about the technological observation known as Moore’s Law. Coined in 1964, it has shown that for more than 125 years the power of computational technologies have doubled and their costs halved ever two years. Although the initial jumps of that exponential acceleration weren’t that much (2 to 4-times as powerful, then to 8-times, etc.), the jumps now underway decades later (536,870,912 to 1,073,741,824-times, then to 2,147,483,648, etc.) are astronomical. Quantum physics, the Internet, and the device on which your reading these words are results of that. Totally automated factories, self-driving cars, Artificial Intelligence, humanoid robotics, etc., are slightly more recent and advanced examples of it, too. Children born this year will see more change during their lifetimes than have all previous human generations combined! An epochal change from the Industrial to the Informational eras began some 60 years ago. Like the change from the Agricultural to the Industrial eras, it might be turbulent. Old jobs will be lost; entirely new categories of jobs created. Almost all industries, institutions, professions, and trades will be disrupted. Some demolished. Anyone searching for a successful media business model in the 21st Century media needs to perceive and accept the sheer scope of the changes underway. Stop trying to manipulate the new technologies emulate the old. Instead, objectively assess the technologies for their new and unprecedented capabilities (i.e., not just whether those can ‘digitally’ imitate printed paper or broadcast antennae) and let these be your guides to media business career success.
- Scarcity to Surplus. Historians frequently cite Gutenberg’s invention of the moveable-type printing press as the most influential event of the second millennium. By magnitudes, it expanded the reach of knowledge in Europe and correspondingly reduced the cost of that knowledge, ending that continent’s ‘Dark Ages’. It sparked the Renaissance, the Scientific Revolution, and the Age of Enlightenment. However, only the aristocracy and rich could afford access to the printed products of Gutenberg’s invention. By comparison, the explosive rise of personal computer-mediated technologies during the past 35 years has given nearly instant access to virtually all the world’s information to more than six billion people (74% of humanity), the number of people who have Internet access via personal computers or smartphones. That is the greatest change in the history of media. What was once a relative scarcity of news, entertainment, and other information, has switched to a surplus, even overload. We live in a new era of persistent content surplus. And economists or sociologists will tell you, any shift in supply from scarcity to surplus greatly changes the economic values and the power dynamics in the marketplace. What consumers are nowadays willing to pay (i.e., the values they now place on various types of contents) has been reduced by the magnitudes of their increase in supply. Power in the informational marketplace has likewise greatly shifted from the content creators toward the consumers. Most of the traditional Mass Media ‘gatekeepers’ and many other intermediaries have been eliminated. If you don’t understand and accept these factual realities, you’ll be unable to function and thrive in 21st Century media.
- The Unbundling. In his best-selling 1977 book Webonomics, business journalist Evan Schwartz was the first to note that the traditional packages of Mass Media contents (the editions of newspapers and magazines, the programs scheduled in broadcasts, the songs on a compact disc, etc.) deconstruct and unbundle once placed online. “They lose their unity. They break up and decompose into their constituent elements. No longer is the editorial package tightly controlled by a team of editors… The editors must relinquish some of that control to the readers, who play a big part in reinventing and reinterpreting how that information is seen.” That unbundling nowadays should be obvious. It’s a characteristic of computer-mediated technologies; a permanent change that further advances of technologies won’t reverse. During the relative scarcity of information during Industrial Era, how the Mass Media industries traditionally packaged news, entertainment, and other information, had holistic value: that bundled package was worth more than the aggregated totals of the elements it contained. However, the unbundling and the shift from scarcity to pervasive surplus of the Informational Era has created the opposite dynamic—anti-holistic value. The total value of the packaged elements is worth more when sold apart than when packaged. (For a good primer about this, read the 2006 book, The Long Tail: Why the Future of Business Is Selling Less of More, by former editor-in-chief of Wired magazine Chris Anderson.) That makes the Mass Media industries continued attempts to market and charge subscription prices for their traditional packages of contents an increasingly dysfunctional and obsolete endeavor. Indeed, to comprehend this extraordinary change, consider the examples in the next bullet point.
- The Phenomenal Popular and Financial Success of Individuation. If anyone wants to examine what works online, what truly has been successful, behold the spectacular popular and commercial successes of Search Engine and Social Media sites (plus audio or video services such as Spotify, YouTube, Pandora, etc.). Dwell on the examples of Google and Facebook, which are among the fastest growing companies of any type in world history and are now the biggest media companies in the world, with 4 billion and 3 billion respective users. In aggregate, thosee two companies now dominate 50% of the world’s online advertising, which is now the world’s largest form of advertising. Neither of these companies were originally founded to be media companies. So, how did these two companies, plus similar ones, come to dominate the world’s media? Because billions of consumers discovered that by using these companies’ personal computer-mediated services, each individual consumer could receive an individuated feeds of news, entertainment, and other information, that better matches that individual’s own unique mix of needs, interests, and tastes, than they can receive from the products or services of any Mass Media company (or practical combination thereof). For instance, compare Facebook service to that of the world’s largest traditional Mass Media company, China Central TeleVision (CCTV), which says it has 900 million viewers. If all of those viewers simultaneously tune-in to CCTV’s Channel One, they all see an identical program. Yet if Facebook’s 3 billion users all logon simultaneously , each sees an entirely unique mix of items compared to every other user. The term I’ve used in my classroom when describing this is Individuated Media rather than Mass Media. Although the companies of the Mass Media industries have mass production and mass reach (i.e., which is how they became colloquially known as the ‘Mass Media’), these companies of the Individuated Media industries have mass production, mass reach, plus simultaneously mass customization. This is why I consider them to be an entirely new genus of media. Mass Media executives who don’t acknowledge the obvious fact that billions of consumers have abandoned routine usage of their products and services (no matter if in print, broadcast, or online), and likewise acknowledge that those consumers have shifted to routinely using the services of Individuated Media companies, are delusional. Those billions of consumers have done so because Individuated Media allows them to receive a mix of news, entertainment, and other information, that is more relevant to each of those individual’s own unique needs, interests, and tastes, than any product or service from a Mass Media company (or practical combinations thereof) can provide. And as Moore’s Law and its corollaries continues to advance exponentially the power of computer-mediated technologies (particularly the rise of Artificial Intelligence or perhaps Quantum Computing), this competitive advantage of Individuated Media will not only become ever more articulate and powerful, but so will the huge gap in success between them and any Mass Media industries that use the ‘Shovelware Strategy’. The Mass Media industries need to stop that from becoming their epitaph.
These four tenets are observable, proven facts in the new media environment. Any attempt to formulate an online strategy counter to these will fail.