A song to read by: “Never Meant,” by American Football

What I’m reading: “The Origins of Totalitarianism,” by Hannah Arendt

Published this week

— Twitch Quietly Ends Partnerships With Rolling Stone, Complex, Vice

— Why The New York Post Is Investing In—and Separating Itself From—Page Six

— 4 Takeaways From OpenAI’s Response to The New York Times’ Lawsuit

— BuzzFeed Inc. Is Nearing a Financial Cliff—Here’s How It Could Respond

Scarcity gets a rebrand

The dawn of the internet was heralded as the beginning of the end for scarcity. With an infinite capacity for sharing, storing and publishing information, the web eliminated the physical constraints that had once helped shape the media ecosystem.

Nearly three decades later, though, a variety of factors are reintroducing scarcity to the media ecosystem, in ways that I think will improve the health of the industry.

Consider the factors. First, dwindling referral traffic from social platforms, and the increasing use of GenAI in search products, has gradually shrunk the size of most publishers’ audiences over the last few years.

In fact, many of the most effective tools publishers have embraced in recent years—newsletters, podcasts, events—are all ways of having deeper relationships with a smaller number of people. None are really geared toward or built for scale, at least not intrinsically.

Second, the glut of content available for consumption on the internet has grown considerably in recent years, and the advent of GenAI will only exacerbate that. Along with the upcoming presidential election and its attendant torrent of depressing coverage, the deluge will only make people more prone to tuning out, limiting their media coverage even further.

At the same time, the deprecation of third-party cookies, which will come into full effect in the second half of this year, will devalue most publishers on the open internet. Without a robust database of first-party data, which requires publishers to have some legitimate, ongoing relationship with their readers, websites will struggle to serve relevant ads to readers. 

Further, legislative efforts spurred by laws passed in Canada and Australia will become mainstream subjects of discussion, and possible implementation, here in the U.S. A bill currently on the docket in California would have Facebook and Google split a percentage of the revenue they generate from hosting publishers’ new content. In Canada, rather than comply with the new law, Facebook has simply opted to remove news from its platform.

Whether Google and Facebook strike deals with publishers in the U.S. or choose to remove news from their platforms, the end result will be a constricting of news content, which will lead to further scarcity.

These factors, and others, will mean individual people on the internet are harder to reach, both for publishers and advertisers. This will spell trouble for small, independent publishers, and it will force many to shutter and others to consolidate. 

But more broadly, I think this will precipitate a rebranding of scarcity, as the concept goes from a negative, i.e. a lack of scale, to a positive, i.e. exclusivity. 

In part this will happen because it has to. There is no real future in which publishers legitimately compete against platforms for scale, so they have to reframe their value. But, on the other hand, if the addressable internet contracts as a result of the factors I listed above, then the publishers that remain will have a strong case that their readership is more valuable.

Already publishers and digital advertisers are focusing more on concepts like “attention-based” advertising, share of voice and — as always — engagement, in the form of repeat readership, time-spent, streaks, etc. These are all ways for publishers to say to advertisers, “Yes we are getting less traffic, but the readers we have are human and focusing intently on the content they are consuming.”

The transition will mark a sea change from the prevailing race for scale that dominated the last decade of digital media. As volume and content become commodities, quality and depth must become the points of distinction.

Sometimes, I wonder if this was all inevitable. Advertising, at its core, relies on a degree of scarcity to function properly. The internet blew up this model, introducing the concept of the long-tail and turning a limited resource — channels and surfaces on which advertising could be carried — into an infinite one.

But in creating so much potential inventory, the web fractured attention, meaning there are now far fewer tentpole moments of consumption. Instead of 5 million people watching one program, there are 5 million people consuming 5 million programs.

This dynamic, as it turns out, cannot hold for either side. Content creators cannot subsist on the meager ad revenue generated by the modicum of audience they generate, and advertisers cannot efficiently reach and measure 5 million campaigns at a time. 

The current winnowing of the publishing landscape is a direct result of this dynamic; as they would say in ecology, the ecosystem lacks the resources to sustain the herd. So its numbers will dwindle, the volume of inventory will shrink and, as scarcity returns to the equation, publishers will once again be able to charge competitive rates for offering advertisers access to the limited resource of attention.

In tandem with this cycle, publishers will return to spaces where scarcity never left — live events, newsletters, print products, direct readership, etc. And perhaps, as GenAI firms scrape the internet to turn its data into their answers, publishers will eventually just leave the web altogether.

The week that was

A short, yet still very long week. It is snowy, dark and very cold in New York, so I did little of note, outside of working and tuning into the new season of “True Detective.” 

Next week, things pick up in a serious way — Adweek is hosting an event on Tuesday, and I will be moderating a few sessions. I also have a few fun publisher events on the horizon, including stopovers with Nat Geo, Bloomberg and The Guardian.

I also have a big story that has been a long time coming due to publish soon, so keep your fingers crossed for that.

One good rumor

I hear G/O Media has hung a for-sale sign across much of its portfolio. Anyone care to add some color?

Some good readin’

— When I heard Pitchfork was being folded into GQ, this was the first thing I thought of. To me, what the restaurant map did to the restaurant review, streaming services have done to album reviews. (Kneeling Bus)

— An insightful horizontal look at the failure of billionaire business tycoons to figure out the media industry. Once I might have gloated — now I mostly worry! (The New York Times)

— I love Steve Ells and I am not afraid to say that I love how Chipotle, from a mission-standpoint, has transformed the restaurant industry. But I worry about all these robots. (Grub Street)

— I love reading about T.S. Eliot. He was very melodramatic! Maybe even camp? I never know if I am using that word correctly. (Harper’s Magazine)

— This is just one of my favorite Texas Monthly stories ever written, and I re-read it recently. You should too! (Texas Monthly)

“Ochre and red,” by Mark Rothko