If we learned nothing else about the media industry in 2016, we know change will continue to roil our business with the introduction of new players, new technology and innovative methods of creating sustainable growth.
In the last year, AT&T announced its intention to acquire Time Warner, fake news became a persistent thorn in the side of platforms like Facebook, Tribune Publishing became Tronc, and politicians rewrote the rules of engaging the media during a presidential campaign.
The next 12 months promise to bring just as much change. Here are predictions for the industry and what we can expect to see unfold in 2017.
1. Google and/or Facebook acquire a major media studio/company
Google and Facebook now get 85 cents of every new online advertising dollar, creating a duopoly that's altering the landscape of nearly every industry the two companies touch. Increasingly, the line between platform and publisher is blurring, and the landscape is littered with media companies that tried to build on the backs of the platforms.
The natural progression for these behemoths is to move beyond collecting advertising revenue and acquire the content via a media studio/company that will further fuel their growth. They have the cash, the scale, and the cache to easily make this happen.
2. M&A will accelerate as marketing tech and ad tech converges
We’ve been anticipating the consolidation in the marketing tech and ad tech ecosystems for some time now, and 2017 is the year we’ll see this trend accelerate. There are too many players who cannot make it on their own, too many fragmented solutions and, for the sake of transparency and simplification, a desire among clients to work with fewer partners.
3. Horizontal and vertical publishers thrive while the middle ground dies
General-interest publishers are starving for air, due to the vacuum created by the Facebook and Google duopoly. Unless you are one of the biggest names in the industry (ex. Verizon/AOL/Yahoo or AT&T/Time Warner), highly specialized verticals and niche publishers with a laser-like focus on their audiences have the best chance of survival. (ex. Vox, IDG) Going forward, survival is dependent on being hyper-horizontal or hyper-vertical. The middle ground will ultimately die out.
4. The new structural reality for media
Breaking down silos and fostering a work environment that enables speed, agility, collaboration and innovation is essential to media’s future success. Companies like Bloomberg, Conde Nast, Hearst, Meredith, and Time are all implementing similar strategies of centralizing back-office operations, standardizing technology platforms, and resetting their commercial engine to sell audiences rather than brands.
2017 will show how this business model addresses our current market reality and if this structure works best for readers, advertisers, and employees.
5. Transparency or DoomIt is no secret trust in the media is at the lowest it’s ever been. The 2016 election highlighted many trends the industry has long been side-stepping – chiefly the rise of fake news and misinformation. This epidemic compromises all publishers and will continue to do so.
Add a clear lack of transparency between the advertiser, agency and the media ad-buying ecosystem, and the years of trust will dissolve instantaneously. If the media industry is going to emerge from these tumultuous times with integrity, transparency must be the first challenge we address.