What can we learn from media changes in the 20 years since I became a headhunter?
2016 marks twenty years since I became a headhunter. While that makes me feel incredibly old, it has been a fascinating time to be an observer of the media landscape across the UK and beyond.
When I first started, the internet existed, but was a hard-to-use and limited resource with dial-up access. Email also existed, but not in my office (we relied on faxes). Things were changing, yes; but no-one had really grasped the magnitude of what was about to happen.
If you really want to know how much the media world has changed in the intervening years, imagine saying this back in 1996:
“I am writing this blog on my tablet in a WiFi hotspot. Research has been done over 4G on my smartphone, using Google and Wikipedia. I am typing it with a Bluetooth keyboard, and storing it in the Cloud.”
Or imagine explaining to my 1996 self, before newspapers even had websites, how I haven’t had to buy a physical newspaper for years; that in 2016 I would subscribe to three daily papers and read them on my iPad; that I play games on this device, and on my phone; and that both devices enable me to watch live television, download films, store my music, and listen to podcasts.
Blogs, tablets, cloud and podcasts: just some of the terms and concepts unimagined in 1996.
The real purpose of this blog is to demonstrate how much the media landscape has shifted in the last 20 years. If nothing else, it should serve as a warning that the future could look very different to the one we expect.
Back in 1996, print ruled the day. British national newspapers have since seen a 50% decline in circulation, with magazines facing a similar fate. The digital revolution has brought some comfort in terms of audience figures, but not profitability in most cases. In the B2B sector, many magazine and newspaper print publishers have moved to an online subscription model. Reed Business Information, for example, published over 100 magazines back in 1996, and 90% of its revenues came from advertising. Now, it publishes six magazines, and 90% of revenues come from subscriptions to information services.
In the same time, the UK broadcast space has spawned innumerable channels – moving from around 20 on terrestrial and BskyB to over 1,000 now. While the total number of viewing hours has increased, fragmentation has massively impacted viewing figures, with the top ten programmes shedding 35m viewers between them as a result – and that’s despite innovations such as multi-platform and on-demand viewing. The introduction of DAB has led to a similar proliferation of (legal) radio stations.
As a result of all this newly available air-time, production companies have proliferated too: in 1996, there were 1,745 in the UK; by 2014 there were 10,755.
In 1996, it was estimated there were 70m Internet users. Last year, it was estimated there were 3.2bn. It was also reported that the number of registered websites has passed 1bn in 2015; in 1996, there were around 250,000.
But it isn’t just the number of sites and users that’s grown. The amount of data now published is equally mindboggling: 300 hours of YouTube video, 350,000 Tweets, and over 4m posts on Facebook each minute. Over two million blogs are published every day. And every two days, we now produce as much content and data as existed in the entire world when I became a headhunter (see my Note for statistics geeks at the end of the post).
And mobile has taken over. More people now access the services I just mentioned from their smartphones than from any other single device: in 1996, a mobile phone was a relative rarity, and was only capable of making and receiving calls. Even WAP was three years away.
In 1996, the UK media landscape was dominated by News Corp, Emap, IPC, DMGT, the BBC and ITV. News Corp and Emap have since both split into many parts, with various bits spun off; IPC is subsumed into Time Inc; and DMGT has now sold off many of its traditional assets, while, like the rest, acquiring non-traditional channels. Only the BBC – now with nine national TV channels and innumerable radio stations, and one of the most successful digital presences in the world – and ITV have managed to remain dominant in the face of challenges from satellite and other terrestrial broadcasters.
Terrifyingly, when I started in this job, Google, Facebook, YouTube and Twitter had yet to be founded; Amazon, eBay and Yahoo were each one year old.
Google’s market cap is now around $500bn; Facebook’s $275bn; and Twitter, the tiddler, is around $14bn. Amazon is worth $300bn and eBay and Yahoo around $30bn each.
It’s interesting to compare these valuations of new businesses to the current value of the ‘old media’ giants: Thomson Reuters, $39bn; the constituent parts of News Corp, $20bn, ITV £10bn. In fact, according to Statista.com, the 20 largest traditional US media stocks – including Disney, Comcast, Liberty and the rest – could not together summon a valuation to match that of just Google and Amazon together.
Tim Armstrong, CEO of AOL, said something extremely telling in his interview with the Media Guardian this week: “If there’s one law,” he said, “it is that no-one owns the future.”
And he should know: AOL offers us a perfect example of how quickly things can turn around. In the late 1990s almost half the Internet users in the world (34m) were using AOL’s hourly-paid dial-up service, and the company was valued at $160bn. It sold in 2015 to Verizon for $4.4bn – about 1/36th of its peak value.
The lesson from the last twenty years is simple: media businesses cannot ever rest on their laurels. Complacency and pig-headedness are keywords in the epitaphs of many dead and dying old media businesses.
A sad PS
The clash of old media attitudes vs new media vision was neatly encapsulated in a 1999 David Bowie interview with Jeremy Paxman which was reshown this week on Newsnight as part of a tribute to the departed genius. While Paxman dismissed the WWW as ‘just another delivery mechanism’, Bowie saw its potential to change everything:
“We’re on the cusp of something exhilarating and terrifying,” he said. “The actual context and the state of content is going to be so different to anything we can envisage at the moment – the interplay between the user and the provider will be so in simpatico it’s going to crush our ideas of what mediums are all about.”
Note for statistics geeks
Earlier, I said we now produce as much content and data every two days as existed in the entire world when I became a headhunter.
In 2010 Eric Schmidt caused waves by saying that we produced as much content every two days as had been produced in the entire history of civilisation up to 2003. While this was widely challenged at the time, it does seem likely that you could apply that statistic to the period 1996-2016. A 1997 study suggests there was a total of 12,000 petabytes of information in the world at that stage; in 2014, it was estimated that 5,000 petabytes (five exabytes) of data and content are produced every day on the Internet. Given the exponential increase in content production over the last few years, it seems reasonable to assume that this would be around six exabytes per day this year.