AUSTIN, Texas – This has been a bad week.
Not because of SXSW, which staged many fascinating panels and restored the proper brisket-beer-taco metabolic balance to thousands.
And not because I endured the indignity of my first ever senior’s discount, at a Denny’s on I-35. The young server was very kind and took care to speak loudly and distinctly. Plus, while I don’t necessarily blend in with the acres of bearded 28-year-olds dressed in gingham shirts and jeans with turned-up hems, the bouncers here card everybody, which is a mitzvah, bless their hearts.
It wasn’t even a bad week because my panel -- premised on the dire state of media, legacy and otherwise -- went poorly.
On the contrary, it did not go poorly, because media -- especially news media -- are indeed in dire straits. All the king’s horses and all the king’s revenue streams -- advertising, events, customer research, subscriptions, freemium models, affiliate marketing -- are in the vast percentage of cases insufficient to keep the these organizations viable. They are kept alive, as I have so often observed, by venture capitalists and other investors whose stakes are burned at the stake; by retained earnings of legacy media companies; by patient billionaires; by amateur volunteers and by exploited refugees from the Good Old Days.
And that’s why it was a bad week. Because one of the best news organizations of the digital age, long a fixture at SXSW, was not present to record my cranky musings or anything else that took place here. Because Gigaom, the tech news site -- in grim fulfillment of my apocalyptic prophesies -- last week closed its doors. Here was the note on its site that broke its last bit of news to the world:
Gigaom recently became unable to pay its creditors in full at this time. As a result, the company is working with its creditors that have rights to all of the company’s assets as their collateral. All operations have ceased. We do not know at this time what the lenders intend to do with the assets or if there will be any future operations using those assets. The company does not currently intend to file bankruptcy. We would like to take a moment and thank our readers and our community for supporting us all along.
Ugh. To outsiders, the brainchild of tech blogger Om Malik seemed like an exemplar of Internet publishing. Through vigorous, accurate, straightforward reporting, it grew in audience and reputation, even as the business grew in scale. Backed by True Ventures, Alloy Ventures, Shea Ventures, Reed Elsevier and others, it grew organically and by acquisition. And the investments, eventually totaling $25 million, underwrote quality -- i.e, expensive -- journalism. The ad revenues, the conference business, the bespoke research arm, they seemed to make it all a going concern.
Versus a growing concern. Who knew what was behind the curtain? And, really, who wanted to know? Not me.
Although since the publication a decade ago of my essay “The Chaos Scenario,” I have been a professional pessimist on the subject of restoring media profitability, I am equally an advocate for solutions. I teach a University of Pennsylvania seminar dedicated to exploring the landscape of revenue possibilities, I’m organizing a summit of media bosses to swap ideas, and of course, I headed southwest to probe the experiences of The New York Times and Guardian US.
In other words, there is what I fear, and there is what I wish for. Gigaom represented hope -- a counter narrative to chaos. Then came the sad death notice. The only other new content was to be found in the reader comments -- which, with various degrees of irony, speak tragic volumes.
Tom Foremski Monday, March 9, 2015 The new media is facing the same disruptive forces as the old media…I’m sorry to hear this about GigaOm but clearly, there is as yet, no business model for media, especially media that cares about details and accuracy.
Jhesr Monday, March 9, 2015 This is just more confirmation that media companies still haven’t figured out how to prosper online. I think even the aggregators like Huffington Post, and Business Insider will eventually fold. As far as I can tell the movement from web browsers to mobile apps will be even harder on the digital magazines and papers. Oh well. I enjoyed reading Gigaom while it lasted.
Spadoll Tuesday, March 10, 2015 hope you can get an investor to save the company.
Adrian Melrose Tuesday, March 10, 2015 This is indeed sad news. Given you have many loyal readers (see comments to this post alone) – is it worth considering crowd funding your way out of this?