Why Media Companies Are Going Broke (And What We Can Learn from It)

Brad Smith

Newspapers B&W (4)

Want to find out how to improve your website?

Step #1. Go to any major news or media website.

Step #2. Look at what they’re doing.

Step #3. Immediately do the opposite.

Because most media companies purposefully create a bad user experience — even though the goal of a media company’s website is to provide a nice user experience so we consume more content and stay on their site longer.

Here’s why, and what we can learn from their stupidity.


Will the REAL Customer Please Stand Up?

Unfortunately for you and I, consumers are NOT a media company’s primary customer.

The real customer for media companies are the advertisers. We’re just the users.

So media companies do what’s best for their customers first, and the users have to deal with it (whether they like it or not).

Sidebar: Guess what – this applies to any product or service that is primarily “free” and makes a bulk of it’s money off advertising. Think: Facebook.

For example, here are some stupid ideas we (the users) have to deal with to keep the customers (advertisers) happy…

Stupid Idea #1. Pagination: You know when you try to read an article and they slice it up on 10 different pages? That’s called pagination. And it’s done because it’s an easy way to quickly add pageviews (the main metric advertisers care about) – while annoying every single reader on the face of the planet.

Stupid Idea #2. Auto-Play Videos: Display ads suck. Therefore most people ignore them. This is a common trend referred to as “banner blindness” because on usability studies, people commonly ignore anything that looks like an ad in certain places of the page. So knowing that we ignore them, they just automatically play the videos now — thinking that the disruption will cause us to somehow watch it (while continuing to add impressions to keep advertisers happy).

Stupid Idea #3. “Squeeze” Ad Pages Before Content: When you click on an article, they show you a squeeze page with an ad instead. You have to wait for it to load or watch it before proceeding to the article you want to see. And the video either commonly has problems loading quickly, or is impossible on mobile devices.


How to Learn from Their Mistake

Media companies are going broke. Their legacy business (print advertising) is still subsidizing their new business (digital content distribution) — and it’s decreasing substantially year-over-year.

In response, they’re making easy decisions (like the stupid ideas above) instead of the hard ones.

And in the process, they’re willingly sacrificing the end-user experience to prop up their under-performing business.

It’s a race to the bottom.

And it won’t work forever. In fact, it’s only exacerbating the problem.

Because media companies are like marketplaces. You need to keep BOTH sides happy (users + advertisers) to have a profitable business. If we – the users – stop showing up and reading the content, then they will have no audience to run ads against for their customers (advertisers).

This is a business model problem. NOT a marketing problem. No amount of advertising, PR, design work, or other gamesmanship can overcome this. We — the users — aren’t stupid. We see what’s going on. There’s no room to hide in the Age of Excellence.

Media companies aren’t going broke because of competition or technological disruption. They’re going broke because they’re making (1) stupid decisions, or worse, (2) no decision at all. They need to stop desperately clinging to the past at the expense of their future.

The hard decision is to alter your business model, introduce new products and subscription services, lower cost structure, and reorganize the business for a completely new ballgame.

The easy decisions include adding more stupid website tricks that *temporarily* work. They’re using band-aids to cover a broken arm.

And here’s a final tip…

Start by aligning incentives with intended consequences. Because whenever you try to make one party happy at the expense of another, your business is ALWAYS doomed to fail. It’s just a matter of time.