Amit Rathore is the founder and CEO of Quintype, a modern media technology platform and premium monetization service.
If you’re old enough, think back to the early days of the internet. It was a tapestry of low-res images, comic sans, scrolling banners, and painfully slow dial-up connections. Back then, it was hard to imagine what a ubiquitous and important thing it would become. In fact, an infamous dating back to 1995 was titled The Internet? Bah!
Harder to imagine still was the impact it would have on industry and media publications in particular.
Today, the traditional media industry is in crisis. Since the internet began to provide open and free access to news and media content, leading publications have struggled to find viable monetization models. According to , non-digital advertising revenue fell by 10% in 2015 alone, and in 2014, the latest year for which data was available, newsroom employment also declined by 10%.
A handful of forward-thinking legacy publications the New York Times and the Washington Post, for example have begun to find their feet in the tough new digital landscape. Others like Buzzfeed are to bolster revenues. Within the next five years we are likely to see half of todays legacy media businesses go bust if they cannot start making profits.
While the new ecosystem will kill off many players, it will leave a less crowded playing-field for those that can adapt quickly to the new conditions and find means of monetizing in the digital world.
The impact the internet has had on the media from the early 1990s to the tech bubble was massive. But how did we reach this stage?
What was the early impact of the internet?
The first half of the nineties saw a small number of news-sites pop up, with Bloomberg, Wired and MTV all launching in 1993. They were shortly followed by the Economist, Telegraph.co.uk, Velonews, and Jerrys Guide which would become Yahoo! in 1994, before CNN Digital went live in 1995.
However, early users were most excited about the recreational uses of the internet. The prospect of sharing ideas and opinions with people on the other side of the world resonated far more than the idea of consuming content and reading the news.
Early research into internet saturation in the U.S. in 1995 revealed that 14 percent of the country was already online. But the slow and expensive process of logging on through dial-up modems held back the newfound past-time as a novel hobby rather a day to day activity for the majority.
Of course, this made the internet’s global success hard to predict, and its eventual impact on traditional media was entirely unforeseen.
How did legacy media companies interact with the early internet?
In the mid 1990s, the web was a mess. There was no Google, and it was very challenging to navigate through pages that were often unedited. As a result, people in the media saw the early World Wide Web as a curiosity and nothing more.
Very few newspapers could afford or had the expertise to create online outlets, nor was there much desire to. The investments required to build out websites were steep, with Time Warners celebrated Pathfinder site reputedly costing $120 million to build. The audience was, at that time, very limited.
But then something remarkable happened. Online banner advertising began in the early 1990s as page owners sought additional revenue streams to support their content. It was an unexpected success.
The first clickable web ad was sold by Global Network Navigator in 1993, and the first AT&T ad on HotWired had a 44% click-through rate (CTR), a number unheard of today. As the famous statistic goes, youre and an average CTR on a Facebook advertisement today would .
By the late 1990s, due in part to higher user numbers and impressive CTRs, hundreds of U.S. newspapers began publishing online versions.
The electronic newspaper is part of a strategy to extend the readership of the Times and to create opportunities for the company in the electronic media industry, said Martin Nisenholtz, president of The New York Times, in 1996 when the newspaper introduced its website.
How did media publications feel about the internet at the end of 1990s?
By 1999, the estimated number of worldwide internet users had reached 150 million, with more than half of them based in the United States. The dot-com boom was well underway, and investors and consumers alike were going crazy for anything internet.
While internet saturation had increased dramatically, and traditional media outlets were starting to take more notice of the potential of web, at this point the internet still did not pose a threat to the media industry.
Somewhat counterintuitively, a 1997 found that computer use was in fact linked to an increase in the consumption of print. This was most likely down to higher-socioeconomic groups cultural favoritism for print media. However, in the midst of the dot-com boom, experts had begun to predict an impending shift.
The late nineties saw media moguls like Rupert Murdoch a self professed internet skeptic take a step into the digital unknown. In April 1999, with $300 million to invest in the internet, interactive television and wireless communication. At this point, News Corps stance was to use websites as a commercial tool to extend the brands of existing media outlets.
By then, most leading news outlets had extended their services online. However, even at the peak of the dot com boom, online news was viewed as a profitable extension of regular print news media, rather than a direct competitor.
Nevertheless, advancements in internet technology would open the door to a much richer multimedia experience, bringing video to users screens as well as an enhanced sense of community and interaction. This would begin to make online news more appealing to the average news reader than the paper dailies on which they had relied for so many years.
The challenges the media are facing today stem from that early, chaotic digital frontier. With a massive growth in users and the global and scalable nature of the web, however, there were clear indications that the internet would be a game changer.
Today, we are seeing similar beginnings, with the rise of artificial intelligence, the internet of things, and virtual and augmented reality. Whether these affect the media industry in a positive or negative way really depends on how we leverage and prepare for them. Its time to learn from the lessons of the past: The one thing we shouldnt do is underestimate just how reactive we need to be to new technology and media in the future.