The State of the Media Industry, how monetization works for media companies and the opportunities Web3 offers for the industry

10 min readFeb 24, 2024

The Present State of the Media Industry:

The media industry, once characterized by traditional print, television, and radio, has undergone a radical shift in the digital age. Digital technologies, changing consumer behaviors, and the rise of online platforms have reshaped the landscape, challenging established norms and creating both opportunities and challenges for media companies.

Traditional print media, once the cornerstone of journalism, has faced a decline in readership and revenue. Newspapers and magazines struggle to adapt to the digital era, with many facing financial challenges and turning to online platforms for survival. The New York Times, for example, has undergone a digital transformation, emphasizing online subscriptions to offset declining print sales.

The rise of streaming services has revolutionized the entertainment sector. Companies like Netflix with 233 million paying customers according to investopedia, Hulu with its segmented audience preferences, and Amazon Prime Video with its local membership model offering 7 days free trial have disrupted traditional television models, offering on-demand content and original productions. Netflix, with its data-driven content recommendations and binge-watching culture, has become a global streaming giant, challenging traditional cable and broadcast networks.

Digital advertising has become the lifeblood of many media companies, with tech giants like Google leading with 39% and Facebook 18% controlling a significant share of the market. Google’s advertising platform, AdWords, and Facebook’s targeted advertising have revolutionized how businesses reach their audiences. The shift to online advertising has posed challenges for traditional ad-based revenue models, impacting industries such as print and television.

The rise of user-generated content on platforms like YouTube, Instagram, and TikTok has given rise to citizen journalism. Individuals with smartphones can now capture and share news in real-time, bypassing traditional news outlets.

The Arab Spring protests in 2011 showcased the power of citizen journalism, where social media played a pivotal role in sharing firsthand accounts and organizing movements.

While digital platforms have democratized information, they have also amplified challenges related to misinformation and fake news. The spread of false information through social media has raised concerns about the integrity of news sources. The Cambridge Analytica scandal involving Facebook highlighted the risks associated with data privacy and the potential misuse of user information for political purposes.

The resurgence of podcasting has provided a new avenue for content creators to reach audiences. Platforms like Spotify and Apple Podcasts have become hubs for a diverse range of content, from investigative journalism to entertainment. The success of podcasts like “Serial” and “The Joe Rogan Experience” demonstrates the growing popularity of long-form tailored for specific audiences interested in audio content in the digital age.

The media industry is increasingly addressing issues of diversity and inclusion, with a growing emphasis on representation in content creation and storytelling. The success of films like “Black Panther” and the rise of diverse voices in journalism reflect a changing industry that recognizes the importance of reflecting the diversity of its audience.

The media industry stands at a critical juncture, navigating the challenges and opportunities presented by the digital age. Traditional models are being disrupted, giving rise to innovative approaches and a redefinition of what constitutes news and entertainment. As media companies grapple with the changing landscape, the ability to adapt to digital trends, engage audiences through diverse platforms, and address evolving consumer expectations will determine their success.

Monetization

Monetization is at the heart of the media industry, influencing content creation, distribution, and overall sustainability. As the digital era reshapes consumption patterns, media companies are adopting diverse strategies to generate revenue.

How monetization works: I will be discussing the intricacies of monetization, exploring advertising models, subscription services, and other innovative approaches.

Advertising Models:

Display Advertising

Display advertising involves placing visual ads on a website or app, typically banner ads. Media companies earn revenue based on the number of impressions or clicks. Google’s AdSense is a prominent example, allowing publishers to display targeted ads on their platforms. The revenue generated is shared between the content creator and the advertising platform.

Video Advertising:

Video advertising has gained prominence with the rise of online video content. Platforms like YouTube employ pre-roll, mid-roll, and post-roll ads, with creators earning a share of the revenue.

YouTube’s Partner Program enables content creators to monetize their videos through ads, offering a revenue stream based on factors like ad impressions and viewer engagement. As for X, there are now over 350,000 communities on the platform, with around 650,000 community posts churned out daily.

X has paid over 80,000 content creators thus far through its ads revenue sharing program. This has led to 80% of user sessions, which now include video consumption and over 100 million people consuming full-screen vertical video in the app every day.

Native Advertising

Native advertising seamlessly integrates promotional content into the user experience. Sponsored articles on news websites or promoted posts on social media exemplify native advertising. Buzzfeed’s sponsored content, known for its blend with regular editorial content, is a successful example. Media companies strike a balance between monetization and maintaining editorial integrity in native advertising.

Subscription Models:

Paywalls and Metered Access

Media companies employ paywalls to restrict access to premium content, requiring users to subscribe for full access. The New Yorker, for example, has implemented a metered paywall for its online articles, balancing the need for revenue with the demand for free access to information and broad readership.

Subscription Services

Subscription services, popularized by streaming platforms, have become a staple in the media industry. Netflix, for instance, operates on a subscription-only model, offering a vast library of content for a monthly fee. This direct-to-consumer approach provides a reliable revenue stream, reducing reliance on advertising.

Source: screenshot from my phone on a publication(Names withheld).

The Washington Post, under the ownership of Jeff Bezos, has embraced a subscription-driven model with a focus on digital innovation. The incorporation of artificial intelligence for content personalization and user engagement showcases the industry’s commitment to staying relevant in a rapidly evolving landscape.

Consumers, overwhelmed with subscription services for streaming, news, and other content, are becoming more selective.

Membership and Donations

Some media outlets leverage a membership or donation model, appealing to their audience’s loyalty and sense of community. The Guardian, a UK-based newspaper, relies on reader contributions for financial support. This model emphasizes a symbiotic relationship between the media outlet and its audience, fostering a sense of shared responsibility.

Innovative Approaches to Monetization:

Affiliate Marketing

Affiliate marketing involves promoting third-party products or services in exchange for a commission. Media companies incorporate affiliate links in their content, earning revenue when users make purchases through those links.

The Wirecutter, a product review site owned by The New York Times, effectively utilizes affiliate marketing to supplement its income.

Events and Merchandising

Media companies increasingly diversify revenue streams by organizing events and selling merchandise. The live events market, exemplified by conferences, concerts, and workshops, has proven lucrative. NPR, through its NPR Shop, sells branded merchandise, creating additional revenue channels while fostering a sense of community around its brand.

While these approaches boasts substantial reach, it presents several drawbacks:

Eroding user trust: Intrusive advertising and data collection practices often fuel user frustration and privacy concerns.
Declining attention spans: Consumers are bombarded with ads, leading to banner blindness and declining effectiveness.
Uncertain ROI for advertisers: Attribution challenges make it difficult for advertisers to measure campaign effectiveness accurately.

Furthermore, subscription models have gained traction, offering ad-free content and exclusive offerings for paying users.

However, this route comes with its own set of challenges:

B2C subscription fatigue: With numerous subscription options across various industries, user acquisition and retention become increasingly competitive.
B2B challenges: Convincing organizations to invest in multiple content subscriptions can be difficult, requiring strong value propositions and clear differentiation.
Content discovery: Reaching potential subscribers and showcasing the value proposition remains a significant hurdle.

Additionally, both advertising and subscription models struggle to adequately incentivize creators. Many creators receive a small fraction of the overall revenue generated from their work, leading to dissatisfaction and an erosion of talent.

Advertising vs. Subscription:

Media companies often grapple with the decision of whether to rely on advertising revenue or subscription fees. Advertising offers free content to consumers, but it comes with challenges such as ad-blockers, privacy concerns, and the need for a vast audience to generate substantial revenue. On the other hand, subscription models provide a direct stream of revenue but require compelling content to convince users to pay.

Tradeoffs and Challenges: The choice between advertising and subscription models involves tradeoffs. Ad-supported platforms may sacrifice user experience due to intrusive ads, potentially leading to decreased engagement. Subscriptions, while offering a reliable revenue stream, face challenges in customer acquisition and retention.

B2C Subscriptions vs. B2B:

Business-to-Consumer (B2C) subscriptions involve selling directly to individual consumers as seen with Amazon and Meta. Business-to-Business (B2B) subscriptions target other businesses as seen in the recent X partnership with Shopify. B2C models often require a large user base to be profitable, whereas B2B models may require tailored content and services to cater to specific industry needs.

Web3 and Access Protocol: Reshaping the Narrative

Web3 represents the next evolution of the internet, governed by decentralized protocols, blockchain technology, and user empowerment. It aims to shift control from centralized entities to users, fostering a more equitable and transparent digital ecosystem. Web3, characterized by decentralization, ownership, and tokenization, offers the media industry a unique opportunity to address these challenges through Access Protocol.

Therefore, leveraging various Web3 technologies and Access Protocol, the following possibilities emerge:

Creator-centric monetization:

Non-fungible tokens (NFTs): Creators can tokenize their work (articles, music, videos) as NFTs, offering ownership and secondary market royalties. This empowers creators to capture a larger share of the value they generate. Access protocol Sketch is your go to platform for making your dreams come true.
Fan tokens: Communities can purchase tokens representing access to exclusive content, governance rights, or voting power within media platforms. This creates a direct financial connection between fans and creators. Access leaderboard makes this happen.
Crypto-gated content: Creators can utilize platforms that require viewers to hold specific tokens to access content, generating direct revenue. Brave, a privacy-focused browser, integrates a micropayment system using Basic Attention Token (BAT). Users can opt to view privacy-respecting ads and earn BAT, which they can then contribute to their favorite content creators or redeem for premium content.

Enhanced user engagement:

Reward systems: Users can be rewarded with tokens for engaging with content (writing, participating, reading, content), fostering active and passionate creators. With Access protocol, creators are categorized: the Access community, the NFT creators, the Newsletter, the Scribe and publisher. Each category is ranked on a leaderboard for creators rewards.
Decentralized autonomous organizations (DAOs): Media platforms can be governed by DAOs, where token-holding users make decisions on content acquisition, platform development, and revenue distribution. This creates a more equitable and user-driven ecosystem just like the Access community.
Micropayments: Web3 enables seamless micropayments such as Solana Pay, allowing users to pay for individual pieces of content rather than committing to subscriptions, increasing accessibility and flexibility. With Access, creators are rewarded instantly in $ACS on-chain directly into their wallets.

Transparency and trust:

Blockchain-based rights management: Blockchain technology can facilitate transparent tracking of content ownership and usage rights, ensuring fair compensation for creators and addressing piracy concerns.
Data ownership: Web3 empowers users to own and control their data, potentially leading to a more privacy-conscious media environment as creators’ content are stored on-chain and their unique data immutable.

Embracing a Balanced Perspective:

Despite the aforementioned opportunities, it’s crucial to acknowledge the tradeoffs and challenges associated with Web3 and adoption in the media industry.

Technological complexity: Mastering Web3 technologies and integrating them seamlessly into existing workflows can be challenging for traditional media companies.
Regulatory uncertainty: The regulatory landscape surrounding cryptocurrencies and Web3 is still evolving, introducing compliance and legal hurdles.
User adoption: Educating users about Web3 concepts and encouraging them to participate in these new ecosystems requires effort and strategic communication.
Environmental concerns: The energy consumption associated with some blockchains raises sustainability concerns that need to be addressed.

The Bottom Line…

While the full potential of Web3 in the media industry remains to be realized, the early signs are promising. Access protocols is embracing innovation through Sketch, Scribes, and Access V2 (with features such as; transferable subscriptions, forever subscriptions and protocol-native referral system), and, is navigating the challenges responsibly, and prioritizing user experience.

Media companies can leverage Access technologies to create a more equitable, engaging, and sustainable media landscape. This transformation ultimately hinges on collaboration between creators, platforms, and users, working together to build a media ecosystem that benefits everyone involved just like Access protocol.

Furthermore, as the Media industry is undergoing a complex transformation, and technological advancements, the changing consumer habits, and evolving user expectations are worth prioritizing. While challenges exist, there are also exciting opportunities for innovation and disruption.

With mainstream adoption of Web3, Access Protocol, as a platform that is taking the lead for monetizing creators, has announced a $1.2 million seed investment. We are continuing to concentrate on the Web3 content space with our investment in Access Protocol. Galen Law-Kun, founding Partner of Double Peak Group, stated, “We think Access will lay the groundwork for the future of content and become one of the core infrastructure blocks in Web3.”

Staying adaptable, embracing new technologies responsibly, and prioritizing user experience will be key for media companies to navigate this dynamic landscape and thrive presently and Access Protocol is taking the lead in the right direction.

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