Big media is using big tech to distract from their own strategic blunders

News companies are in a mess of their own making, according to Henry Innis. Facebook and Google aren't to blame for publishers' unsuccessful attempt to replicate their success online.

In the 90s, we lived in the heyday of ‘media empires’. Big conglomerates like News Corp, EMAP, IPC, Hearst all battled it out for circulation, distribution and ad dollars. Flash forward to today and the media landscape is very, very different.

There were four components to a successful publication in the 90s (and I am generalising): cover price, distribution, content, and advertising.

Each of these components worked together to generate an attractive product that was read by people and commercially viable. Ultimately, they created the operating rhythms for media to exist, deliver returns to shareholders and to keep quality staff well paid.

But in the 2000s, something changed. That something was the internet.

Everybody knows that the internet fundamentally changed publishing. But not many people talk about the ‘why’ of that, other than blaming big tech for stealing all the money.

The reality is somewhat different. Publishers in the 2000s were complacent about digital. Whilst they knew it was important, not many gave consideration as to how to do much more than display their content online.

What followed was a strange imitation of ‘digital transformation’:

  • Cover price: most publishers put their content online for free
  • Distribution: most publishers relied on platforms to distribute and ignored subscription bases or lists online
  • Content: most publishers copied content from print magazines onto the internet
  • Advertising: most publishers used display inventory, vastly inferior to glossy print pages, to monetise their space

The result was an inferior product with less revenue and less direct lines to motivating consumers to come back. These weren’t choices made by Facebook and Google — they were conscious strategic failures of publishers to innovate and adapt the skills that made them successful offline to the online environment.

In short, publishers, in their rush for digital audiences, forgot what made them successful in the first place.

It seems easy now to blame big tech for all their woes. Reality shows, though, that publishers who charge for content are beginning to build sustainable businesses. People used to pay for content offline. They will do so again.

Don’t believe me?

Here are some examples: The New York Times generated $285m subscription revenue in a recent quarter. News Corp currently boasts over 600,000 digital subscribers. The Economist (admittedly still a heavy print reliance) gets well over 50% of its business from subscriptions.

In short, businesses that charge for content are working (no surprise — they charged pre-internet). Businesses that give away content for free to chase audiences are bleeding money and position to big tech.

And they’ve failed to innovate in key areas that they dominated in pre-internet: Subscription products to the customer directly, new revenue streams (e-commerce, affiliates), and new advertising products (that aren’t display).

Some are catching on and doing things differently. They’re late to the party, but you’d hope they do well.

And the debate regarding Google and Facebook will continue to rage. But don’t let publishers get away with telling you big tech created all of these problems. Mostly, publishers are in a mess of their own making. 

Henry Innis is co-founder of, and partner at, Mutiny


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