Featured Article

Crawling from the wreckage

What’s next for digital media?


Image Credits: David Sim (opens in a new window)

Things are tough all over — but especially in the digital media business of 2018.

Probably the most high-profile flame-out this year was at Mic, which laid off most of its staff ahead of an acquisition by Bustle. Mic had raised nearly $60 million in funding, with major media organizations like Time Warner and Bertelsmann writing checks for the company’s vision of delivering news to a millennial audience.

But Mic’s issues were just the capstone to a long year of shutdowns and layoffs. Among the headlines:

It may not be entirely fair to group these stories together — some companies likely failed because of specific management or business issues, while others fell victim to broader shifts and still others may bounce back. But collectively, they paint a picture of an industry under intense pressure.

Peter Csathy, an industry veteran and occasional TechCrunch columnist, has just published a book, “Fearless Media,” about the changes in the media landscape.

In an interview with TechCrunch, Csathy argued that it’s become a best-of-times, worst-of-times world. The worst-of-times side seems obvious — the companies that are struggling due to the “devastation of certain business models,” particularly reliance on big platforms like Facebook, and on an online ad business that’s currently “under tremendous pressure.”

At the same time, he said, “The best of times are the companies like Netflix, the Amazons, the Apples — some of these major new tech-driven media companies.”

Of course, Amazon and Apple make most of their money outside the media business, leaving Netflix as the industry’s big success story. But even there, Csathy predicted that in 2019, “Netflix will be challenged like never before” as it tries to compete with a vast array of new streaming services, many of them created by the same companies that have been selling content to Netflix.

A remote control is seen being held in front of a television running the Netflix application on October 25, 2017. (Photo by Jaap Arriens/NurPhoto via Getty Images)

“Ultimately, the question becomes whether Netflix can prove long-term that it is more than a ‘House of Cards,’” he added via email.

And what about companies that aren’t already big, dominant players — the entrepreneurs who want to build the next Netflix or the next BuzzFeed? It won’t be easy, particularly when it comes to convincing venture capitalists to come on-board. Still, there were some digital media startups that successfully raised funding in 2018, like podcast network Wondery and theSkimm, maker of female-focused newsletters.

And New York-based startup studio Betaworks recently announced an early-stage program focused on “synthetic media,” which partner Matt Hartman explained is an area taking advantage of advances in graphics and artificial intelligence. This could include companies fighting against misleading, manufactured news stories and videos (“The need for deep fake detection is growing”), but also the ones trying to create new kinds of content, like “virtual” characters such as Instagram celebrity Lil Miquela.

More broadly, Hartman suggested that business models in the media world are changing, particularly as publishers experiment with paywalls and also explore bundling their products together.

Lil Miquela

“I think that next year, we’re going to see a lot of experiments — skinny bundles, thick bundles, companies you wouldn’t expect to come together saying, ‘These things work together,’” he said.

And even if many of these experiments fail, Hartman suggested that they’re pushing things in the right direction: “The last 10 years have been about building companies that have turned out to be harvesting our attention. I think what we’re really excited about is companies that treat their users more humanely. How do we align the incentives for the companies that are entertaining us and educating us and informing us, but also being respectful of our time and our attention?”

Csathy made a similar point, saying, “These new companies that are ad-driven have no choice but to reinvent their business models. [Otherwise] they’ll be lost in the shuffle, because the monetization just isn’t there.”

Does that mean that as a reader and a viewer, you’re going to keep hitting paywalls everywhere? It will probably become increasingly common (New York magazine, for one, just introduced a paywall), but Parse.ly CEO Sachin Kamdar suggested that subscriptions won’t solve things on their own.

“The best publishers are probably going to have five or six revenue streams,” Kamdar said. “It’s not just going to be one.”

Subscription hell

As the CEO of an analytics company that sells its products to publishers (as well as marketers), Kamdar has a vested interest in the continued health of the media business. He worried that in the industry’s “echo chamber,” publishers may simply follow the latest trend, but he warned, “Just because everybody else goes that direction doesn’t mean it’s going to work for you.”

The key, he suggested, is “figuring out the existential thing — who you are as a publisher.” So he’s hoping they move on from “a very short-term view” of chasing the latest platforms and sources of traffic: “Now, I think, people are finally coming to the conclusion that sustainability needs to be a priority.”

And despite the current business climate, Kamdar said there’s a straightforward reason for optimism.

“More time is being spent reading things and watching things,” he said. “You take the long-term picture, there’s a big opportunity to figure out what is happening with that, where they’re going, how you can capture those audiences.”

More TechCrunch

Companies are always looking for an edge, and searching for ways to encourage their employees to innovate. One way to do that is by running an internal hackathon around a…

Why companies are turning to internal hackathons

Featured Article

I’m rooting for Melinda French Gates to fix tech’s broken ‘brilliant jerk’ culture

Women in tech still face a shocking level of mistreatment at work. Melinda French Gates is one of the few working to change that.

6 hours ago
I’m rooting for Melinda French Gates to fix tech’s  broken ‘brilliant jerk’ culture

Blue Origin has successfully completed its NS-25 mission, resuming crewed flights for the first time in nearly two years. The mission brought six tourist crew members to the edge of…

Blue Origin successfully launches its first crewed mission since 2022

Creative Artists Agency (CAA), one of the top entertainment and sports talent agencies, is hoping to be at the forefront of AI protection services for celebrities in Hollywood. With many…

Hollywood agency CAA aims to help stars manage their own AI likenesses

Expedia says Rathi Murthy and Sreenivas Rachamadugu, respectively its CTO and senior vice president of core services product & engineering, are no longer employed at the travel booking company. In…

Expedia says two execs dismissed after ‘violation of company policy’

Welcome back to TechCrunch’s Week in Review. This week had two major events from OpenAI and Google. OpenAI’s spring update event saw the reveal of its new model, GPT-4o, which…

OpenAI and Google lay out their competing AI visions

When Jeffrey Wang posted to X asking if anyone wanted to go in on an order of fancy-but-affordable office nap pods, he didn’t expect the post to go viral.

With AI startups booming, nap pods and Silicon Valley hustle culture are back

OpenAI’s Superalignment team, responsible for developing ways to govern and steer “superintelligent” AI systems, was promised 20% of the company’s compute resources, according to a person from that team. But…

OpenAI created a team to control ‘superintelligent’ AI — then let it wither, source says

A new crop of early-stage startups — along with some recent VC investments — illustrates a niche emerging in the autonomous vehicle technology sector. Unlike the companies bringing robotaxis to…

VCs and the military are fueling self-driving startups that don’t need roads

When the founders of Sagetap, Sahil Khanna and Kevin Hughes, started working at early-stage enterprise software startups, they were surprised to find that the companies they worked at were trying…

Deal Dive: Sagetap looks to bring enterprise software sales into the 21st century

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: OpenAI moves away from safety

After Apple loosened its App Store guidelines to permit game emulators, the retro game emulator Delta — an app 10 years in the making — hit the top of the…

Adobe comes after indie game emulator Delta for copying its logo

Meta is once again taking on its competitors by developing a feature that borrows concepts from others — in this case, BeReal and Snapchat. The company is developing a feature…

Meta’s latest experiment borrows from BeReal’s and Snapchat’s core ideas

Welcome to Startups Weekly! We’ve been drowning in AI news this week, with Google’s I/O setting the pace. And Elon Musk rages against the machine.

Startups Weekly: It’s the dawning of the age of AI — plus,  Musk is raging against the machine

IndieBio’s Bay Area incubator is about to debut its 15th cohort of biotech startups. We took special note of a few, which were making some major, bordering on ludicrous, claims…

IndieBio’s SF incubator lineup is making some wild biotech promises

YouTube TV has announced that its multiview feature for watching four streams at once is now available on Android phones and tablets. The Android launch comes two months after YouTube…

YouTube TV’s ‘multiview’ feature is now available on Android phones and tablets

Featured Article

Two Santa Cruz students uncover security bug that could let millions do their laundry for free

CSC ServiceWorks provides laundry machines to thousands of residential homes and universities, but the company ignored requests to fix a security bug.

2 days ago
Two Santa Cruz students uncover security bug that could let millions do their laundry for free

TechCrunch Disrupt 2024 is just around the corner, and the buzz is palpable. But what if we told you there’s a chance for you to not just attend, but also…

Harness the TechCrunch Effect: Host a Side Event at Disrupt 2024

Decks are all about telling a compelling story and Goodcarbon does a good job on that front. But there’s important information missing too.

Pitch Deck Teardown: Goodcarbon’s $5.5M seed deck

Slack is making it difficult for its customers if they want the company to stop using its data for model training.

Slack under attack over sneaky AI training policy

A Texas-based company that provides health insurance and benefit plans disclosed a data breach affecting almost 2.5 million people, some of whom had their Social Security number stolen. WebTPA said…

Healthcare company WebTPA discloses breach affecting 2.5 million people

Featured Article

Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Microsoft won’t be facing antitrust scrutiny in the U.K. over its recent investment into French AI startup Mistral AI.

2 days ago
Microsoft dodges UK antitrust scrutiny over its Mistral AI stake

Ember has partnered with HSBC in the U.K. so that the bank’s business customers can access Ember’s services from their online accounts.

Embedded finance is still trendy as accounting automation startup Ember partners with HSBC UK

Kudos uses AI to figure out consumer spending habits so it can then provide more personalized financial advice, like maximizing rewards and utilizing credit effectively.

Kudos lands $10M for an AI smart wallet that picks the best credit card for purchases

The EU’s warning comes after Microsoft failed to respond to a legally binding request for information that focused on its generative AI tools.

EU warns Microsoft it could be fined billions over missing GenAI risk info

The prospects for troubled banking-as-a-service startup Synapse have gone from bad to worse this week after a United States Trustee filed an emergency motion on Wednesday.  The trustee is asking…

A US Trustee wants troubled fintech Synapse to be liquidated via Chapter 7 bankruptcy, cites ‘gross mismanagement’

U.K.-based Seraphim Space is spinning up its 13th accelerator program, with nine participating companies working on a range of tech from propulsion to in-space manufacturing and space situational awareness. The…

Seraphim’s latest space accelerator welcomes nine companies

OpenAI has reached a deal with Reddit to use the social news site’s data for training AI models. In a blog post on OpenAI’s press relations site, the company said…

OpenAI inks deal to train AI on Reddit data

X users will now be able to discover posts from new Communities that are trending directly from an Explore tab within the section.

X pushes more users to Communities

For Mark Zuckerberg’s 40th birthday, his wife got him a photoshoot. Zuckerberg gives the camera a sly smile as he sits amid a carefully crafted re-creation of his childhood bedroom.…

Mark Zuckerberg’s makeover: Midlife crisis or carefully crafted rebrand?