If you’re looking for news, there is a fifty-fifty chance you’re finding it at one of ten online publishers. If you are looking for entertainment, there’s a one in 3 chance you’re getting it from Netflix.
Over the past two decades, there were a lot of predictions about the Internet. One was that it would disintermediate the heck out of everything, including news and entertainment. Two, that fragmentation of sources would lead to a lowering of the quality of the content we read and watch.
Like many things, fragmentation was fleeting, but consolidation is forever.
Take the recent report by research group SimilarWeb that found ten publishers accounted for nearly half of all online traffic to new sites in 2015. The biggest? MSN, owner of MSN.com, with 27 billion page views, followed by Disney, with 25.9 billion.
Consider that at any given moment, one out of every three Internet users is on Netflix. According to the company, 37 percent of Internet traffic in North America goes to its platform – and that number spikes during prime viewing hours at night.
So what are we to make of all this? Is it good or bad?
It’s neither, it’s just inevitable, and there are lessons for the current slate of disruptors who are reshaping the way we shop, travel and work.
Three decades ago, establishment media ruled (read: New York Times and CBS News). Now, there’s a new establishment, and it includes the Drudge Report, Buzzfeed and the Bleacher Report. Whether that’s better or worse probably depends on what your feelings were about the Times and CBS News.
As a former investigative reporter, I will report one lament: the changing nature of news has led to much less investment in investigative journalism and long-term projects, which has reduced scrutiny of government actions. I personally think you can point to the lead-up of the Iraq War as an example where great investigative journalism would have done the country (and yes, George Bush) some good.
But that’s just the news, what about entertainment? The Internet was supposed to be the death of quality programming. Yet, the last 15 years have been the Third Golden Era of Television – the Sopranos, Mad Men, Breaking Bad, and The Wire and countless other shows will go down in history as among the best ever. So it’s hard to argue that the fragmentation (from broadcast to cable to online) has done anything but spark a generation of writers to tell stories that they couldn’t get on TV before.
What does this all mean? We’re likely to see this play out in the rest of the economy and society. Whether it’s Amazon, Uber, AirBNB or Tinder, we’ll get lots of options as this shakes out. But ultimately, as humans are want to do, we’ll settle into our habits and our choices will narrow – in part by the consolidation that is business but also because ultimately people want choice, but a myriad of choices is confusing.
It’s what happens in business. If you go back to the 1920s, there were literally hundreds of companies offering electricity. Ultimately, General Electric stood out. Same with the dawn of the automobile with dozens of companies with the word “Motors” in their name. Over time, a quality few rose above the rest.
Smart companies not only embrace the tides of disruption, but also the inevitable post-disruption patterns that solidify the real winners and losers.