A recessionary economy, lower ad spending, and too many viewing options hurting the entire industry. In the good ole days, the choices for ad spending were limited - print, radio, TV. And inside each of these buckets were limited choices; for TV a handful of broadcast channels, for print, a handful of newspapers and magazines, and for radio, AM or FM stations. Today, technology has lowered the barriers to entry in each of these arenas as well as enable new sources of content distribution to emerge. In TV, there are many cable, VOD, and now internet streaming choices; In radio, the rise of satellite with SiriusXM and internet radio. And in print, the internet has hurt the printed product. But the ad dollars may not have grown as quickly as the players and getting your "fair share" of the media buy is harder and harder. In addition, by lowering the barrier to entry, technology has dealt a heavy blow to the subscription model. Where companies have enjoyed two streams of revenue, the adage why buy the cow if the milk is free comes to mind; why buy a subscription if it is free to view, read, or hear somewhere else.
This proliferation of content has created what many call the "long tail", scratching away at the mainstays and developing niches and even "sub" niches of categories. And while there is literally something for everyone to read, hear, or watch, these content specialty stores may be too limited in the long run to survive. "BitGravity CEO Perry Wu said time was already up for many of the smaller online video development and distribution studios: 'We work with hundreds of content companies and to be honest, many of them won’t survive.'" The classic product/industry life cycle theory says that eventually it will move from fragmented back to fewer, meaningful, larger segments over time. And if advertising isn't paying the bills, these smaller content creators will either merge or die.
Another popular maxim is that the big fish will eat the little fish and perhaps that is what the industry expects to happen. Already broadcast companies like CBS, NBC, ABC, and Fox have acquired cable networks and websites. Cablevision and Fox own newspapers; Magazine publishers are building web portals. It seems their is more consolidation to come. But is it aggregating fast enough and are these big box companies using their advertising arms to sell across platforms or are they not synergized and find themselves believing that each arm should sell advertising independently of its other pieces.
So is it already too fragmented? Yes. Cable Operators have watched the many become the few and independent cable networks are purchased by the bigger companies. Magazines are closing and newspapers are replacing print with online editions. How much more growth is in new entrants to the internet stream or will innovation start coming from inside the existing big fish. Hey, Hulu came from NBC and Fox to challenge You Tube. I can assure you this, it's going to be an interesting ride.