Malik sees the unbundling of traditional media as analogous to the unbundling of telecom brought about the 1996 Telecom Act. The unbundling of access to the telecom facilities owned by the local companies gave competitors access to the so called “last-mile” that led to a customer’s house. The result was rampant competition from traditional telephone and Internet based services.
Now, per Malik, we’re seeing the unbundling of traditional media as the Internet opens distribution platforms.
Many of us confuse the media companies as creators of media and content. In reality, their barrier to entry was ownership of distribution platforms. Just as telecoms of the past maintained their near monopoly by controlling the last mile of the network, the media companies maintained their money machine by controlling the distribution network: trucks, radio waves and television frequencies. The arrival of cable loosened their grip, but not as much.
Then came the Internet, which meant the distribution network was no longer under control of a select few. This saw the rise of new media entities such as CNET (now owned by CBS, an old media company.) And just as the distribution network was accessible to all, new open-source tools such as WordPress (see disclosure) came to market, making it easy for anyone to become a publisher of their own newspaper. With that began the great unbundling of the media business: something which continues today.
Rather than news, sports, entertainment, business, travel, food, and real estate generating advertising dollars for newspapers, advertising dollars are flowing to Zillow, Redfin, SBNation, DeadSpin, TechCrunch, GigaOm, and Yelp.
As Malik wrote last fall:
Because these new media are attuned to the needs of a new kind of information consumer, it’s hardly a surprise that media’s single largest source of revenues — advertising dollars — are getting sliced and diced in pursuit of this elusive, always transforming, info-savvy media consumer. Unfortunately, the media is used to selling page views, impressions and massive audiences: metrics as archaic as drinking on the job and smoking in a doctor’s office.
The impact on traditional media has been staggering.
In 2005, the newspaper industry had revenue of around $47 billion. Today, it is half that amount. The radio and television industry have gone through the same compression. TV advertising declined 21.2 percent from $52 billion in 2008 to $41 billion in 2009, and fell a further 12 percent in 2010 according to the Yankee Group.
Traditional legal media appears on the face of it to remain largely intact. But how long can that continue?
Aren’t we seeing an unbundling of legal publishing with the growth of law blogs? The content being produced by leading lawyers is arguably better, more timely, and more widely discussed than legal articles and law reviews. That’s not lost on the consumers of legal services and in-house counsel whose eyeballs are needed by traditional legal publishers looking to sell advertising and subscriptions.
Rather than distribution of primary and secondary U.S. law being limited to Thomson and LexisNexis, we’ve got innovative and profitable upstarts like Fastcase and Justia making the law more freely accessible.
That traditional legal research as well as law blogs, which are already serving as secondary legal authority, are being openly distributed on mobile devices, including viaTwitter.
It’s hard to imagine legal publishing being immune to the impact that the unbundling of media is having on newspapers, book publishers and the like.
Martindale-Hubbell’s been at best marginalized, and at worst destroyed, by people’s access to information on lawyers and law firms via the Internet. It’s also not enough to look up lawyers in a directory or a website. Consumers like the 360 degree view they can get on a lawyer via social media and social networking.
The LexBlog Network has grown to over 5,000 lawyers publishing on law blogs. And I’m still seeing firms reticent to blog because of ethical and image concerns. As those concerns continue to erode through education, we’re going to see the floodgates open on legal blogging.
LexBlog and companies like us will be able to curate and highlight the best legal content and leverage new forms of social media to distribute content and connect lawyers with colleagues and potential clients. With ALM, LexisNexis, and Thomson no longer controlling the means of distribution, we can inexpensively deliver information and content in new ways — ways in which people are becoming accustomed to receiving information.
ALM, LexisNexis, Thomson, and other traditional media companies are run by smart people and employ some talented folks. But to many people those companies look like they are trying to keep up and adapt, not lead the charge in new media. Those companies also have traditional business models generating revenue, business models (with heavy expenses) that are being challenged with new publishing and media business models.
We haven’t seen the unbundling of the legal media to the extent we’ve seen it elsewhere. But it’s only a matter of time. It’ll be interesting to see how it will all shake out.