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- [00:07]
A
Media isn't running out of audiences to reach, but it's grappling with its use of old ways to reach them. This is Noorna Sear for Ad Tech Unfiltered. In this episode, I'm joined by Sarah Fisher. She's a well known and regarded media correspondent at Axios and media contributor and analyst at cnn. We'll explore the biggest forces reshaping the industry, from AI and audience behavior to consolidation and digital publishing. Sarah also shares the trends she's tracking and why the biggest opportunities belong to companies willing to rethink what a modern media business looks like. Let's get into this episode with Sarah now.
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B
Well, Sarah, thanks for joining. I have not had a reporter ever join and it's exciting to talk to somebody who's specifically reporting in the media space. So appreciate the time.
- [00:50]
C
Yeah, of course.
- [00:51]
B
So I wanted to start off with some softer questions and just get a little bit of a sense of what does the day in the life of a media correspondent look like. Give me a 30 second look at what your day looks like. So you're staying on top of the latest and greatest.
- [01:05]
C
Yeah. So no day looks the same. I am also a contributor to cnn. And so the news cycle means that you one day might be in studio at five in the morning getting your makeup done. Another day you're there till, you know, 11:30 at night. And some days I'm doing work or CNN in New York or another city. Other days I'm in D.C. which is where I am based on. And at Axios we do a ton of events. So I'm constantly on the road as well amid all of that. And so it's just every single day is a new day of managing logistics and travel and in order to be prepared for all of the media appearances that you'll make within that time. You know, I probably do at least like one or two stages. It's just you have to constantly be reading and staying up to date on all things in the news and really not just the media and advertising beats that I cover. But you also have to really understand what's happening geopolitically with technology in local communities because all of those things impact our coverage of media and advertising.
- [02:06]
B
I'm going to ask you a tough question. Maybe it's an easy question. You tell me, if you had to describe the state of the media industry in a headline today, what would that headline be?
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C
It'd be very distributed. There used to be only a select number of platforms where people could get news and information, and now they can get news and information in what feels like an infinite number of places. And there's a lot of challenges that come with that. And there's also a lot of opportunities that come with that. And I think the traditional media industry, which is, you know, publishing companies on the entertainment side, sort of film and television firms, radio, local broadcast, they are trying to navigate what their role is in a distributed landscape where they have to share ad revenue with a lot more companies and they have to share user attention with a lot more companies and user subscription budgets. But overall, I think that that forces the industry to be more competitive than it's ever been in terms of the quality of the product and the offering. So it could be, you know, a really great opportunity to make our industry better than ever before.
- [03:09]
B
You've covered media through the streaming boom, subscription boom, the creator boom, and now the state of the AI boom that we're in today. Which of those shifts do you think will ultimately prove to be the most consequential?
- [03:22]
C
Well, in terms of user adoption of technologies, the user adoption of generative AI technologies has far outpaced any technology in the Internet era, including the adoption of smartphones, the adoption of desktops. So it's definitely generative AI, but, you know, we're still in the early innings of that. And so it's hard for me to quantify, like, how big that impact's going to be. We just know, based off of early adoption data, that it's fundamentally changing the way people are engaging with the world and the economy. You know, if we had the agricultural revolution and then the industrial revolution, you know, and then the Internet revolution, this seems like the fourth major revolution, you know, sort of like the quantum computing revolution. And it's going to be significant. When we look back historically, yeah, the
- [04:07]
B
speed of adoption really can't be compete with. When you talk to media executives today, what concern comes up the most? Often behind closed doors that they may be reluctant to talk about or that they're not reluctant to talk about?
- [04:19]
C
I think volatility in the ad market as it relates to what's happening in Iran with the Strait of Hormuz being closed is in the near term, a very serious concern because that's impacting the flow of goods and supply chains in a way that will impact how much marketers can spend to market their goods. And a lot of those dollars tend to flow down to media entertainment companies. So that's one. I think in the long term, there's concerns around on the news side, press freedom and what that means for the state of American democracy in the long term. On the business side, there's concerns around consolidation and how we are regulating consolidation. You know, we've seen historically when you overregulate, especially in media, there can be some unintended negative consequences. The best example being, you know, we used to have, and we still kind of do, plurality laws that don't allow you to own too much share of voice in a particular market of the local broadcast or local newspapers. And if you did, if you did try to merge, you know, you could be sued for antitrust. And we've seen in the past when that happens. Charleston, West Virginia is a very classic case study of this. You might inadvertently actually knock those outlets out of business. And so we're in this state right now where I think everybody recognizes that the pace of globalization and technology and disruption is forcing consolidation amongst legacy industries. But nobody's quite on the same page around to what extent we should be deregulating them to compete, enforcing historical regulations, creating new ones. Like all of that is very much up in the air. And that's a pretty big concern, because when you don't have a solid sort of legal system to go off of, it creates uncertainty in the market. We're also seeing that same level of uncertainty around copyrights and AI sort of legal fair use. There's so much ambiguity right now around what AI companies can scrape that belongs to media companies and creators and news companies. And until some of that gets resolved, I think the entire industry is going to be a little paralyzed and it's not going to be able to innovate as quickly.
- [06:22]
B
We could go in so many different directions based on just the points that you've brought up, but I want to lean just broadly into consolidation. I know it's something you've written about extensively, and, you know, we're just talking about it. Is consolidation at a higher level? Is it still the answer, if we want to call it that, with air quotes? Or are we reaching the point where bigger no longer automatically means better for media organizations?
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C
It's never meant better. I mean, if you take a look at the doomed acquisition or the doomed merger between AOL and Time Warner, you know, bigger is not necessarily better. And historically, it does not always play out to be. If you look at Disney acquiring the entertainment assets from Fox and now, you know, with the exception of some of the studio assets, it's. They're trying to look at ways that they can not lose so much money on, like, all the cable channels that they bought. Right? So bigger is not always better. And I think people are recognizing that it can become a liability if you do it wrong. I think that's why Netflix bailed out of the Warner Paramount deal. You know, it got to a place where it was no longer prudent to spend so much money on something that you can't assure shareholders is going to be accretive long term. I do think one of the reasons, though, you're seeing a lot of consolidation, especially on the traditional media side, is because either these players combine to compete or they get taken over by, like, private equity to be able to compete. And I think that there's a question of what's the most strategic path forward. But everyone, I think, recognizes that you're not going to be able to stand alone to compete. A good example of that was probably Paramount before it was acquired by Skydance. You know, Sherry Redstone was fielding so many different offers. There's a lot of different private equity firms and, you know, foreign money and all this stuff that was interested. And I think for her, combining the Swiss Skydance Media, which is a movie studio, felt like it would preserve the culture and the mission of her traditional media company better than if, you know, she sold the thing to private equity. So I think that's another factor to think about when it comes to consolidation. Right now.
- [08:12]
B
You've cited some good examples for where bigger isn't better, but are there instances in which you've specifically observed bigger actually meaning better, and those media entities really doing the necessary thinking to enable that?
- [08:25]
C
Well, I mean, the classic example has in some ways been Gannett, because it was a publicly traded U.S. newspaper company. They were basically going to get eaten alive by private equity. And so they got taken over by Gatehouse, which was also private equity. But, you know, that kind of helped them stave off a takeover from this other hedge fund that's considered sort of like a bogeyman for news. So, you know, one may argue that the Gannett Gatehouse merger saves Gannett in some ways. Others would say it forced a lot of layoffs and synergies. Other examples where it has made sense recently, this company called People Inc. It used to be called dot dash Meredith, used to be called just dot.
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B
Dash.
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C
It was owned by IC. They acquired Meredith, I think, a $2.7 billion deal in 2021. And that has definitely proven to pay off. They've been able to help those Meredith magazine brands like Better Homes and Gardens and Southern Living modernize. And it's absolutely become a digital behemoth for ioc. So much so that IOC rebranded To People Inc. So that's been a pretty successful deal. Let's see who else has had some good deals. You know, on the local broadcast side, I think they would argue that they need to consolidate in order just to survive. And so we've seen a lot more energy around that. Al, the jury's still out in terms of whether or not some of these deals are going to be able to go through. On the studio side, we have seen a lot of consolidation. You know, Amazon Prime Video acquiring mgm, Disney, as I mentioned, their studios were combined with Fox's 20th Century Fox Studios when they bought Fox. And we've seen that that hasn't fundamentally really reduced competition. Like there's still six members of the, or maybe it's seven now, the Motion Picture Association. There's still enough buyers in Hollywood. There's a lot of people who are concerned that if the Warner Brothers and Paramount deal goes through that that deal will be problematic for consumers and for competition and it will decrease the number of buyers. And I don't know, we'll see how that plays out. But for now, I think that one is likely to go through one other that I think was kind of a failed one, honestly was Warner Brothers Discovery coming together. I mean, there was so much debt that was brought on on that. And that's why they essentially said that they were going to have to split the companies up if they didn't sell the company. That was kind of an example of a failed merger in a way.
- [10:25]
B
I'll ask you like maybe more specifically in relation to digital media publishers. You just have mentioned so many of the different companies that you've reported on. Who would you say seems to have the clearest vision for what a modern media company should actually be?
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C
It's a good question. There's, there has been a lot of consolidation in digital. It's just so small scale compared to some of the big mergers I just talked to you about. You know, I think what Vox Media has done with the Vox Media podcast network and creating like a talent company is very important because I think talent led franchises are the future of digital media. There have been a few others that have really caught on to this. Red Ventures, which is a sort of podcast and talent management company that was acquired by Fox. They represent people like, you know, Megyn Kelly and Tucker Carlson. They're a great example of someone that they think is getting it right on sort of the traditional news and journalism side. You know, I think all of these startups that are very B2B and focus on professional audiences have done pretty well. So that would be like your semaphores and your pucks and your axioses and your punchable newses. All of those companies have done a fairly good job.
- [11:25]
B
I know you mentioned a bunch of different like creators or actual organizations, but if you could just elaborate a little bit on what it is that they've done. Right.
- [11:33]
C
Well, I think being talent led is important because in the era of distributed content, I think people are flocking to familiar faces for content that they trust. So having journalists become brands onto themselves is important in getting audiences to come and stay. And I also think when it comes to digital product, there was a time, you know, in the aughts where news companies basically took their print newspapers and put them on the Internet. Like literally the layout of the front page of the New York Times and the Washington Post looked like the layout of the front page of their newspaper. And I think that there has to be a product evolution where people recognize that the way that people are consuming content needs to look a lot different and it needs to feel a lot different. Tens of thousands of words for a little article. When most people are reading digital articles on small phones, it doesn't make sense. I think Axios has done a very smart job of bringing forth and pioneering a format that works very well for a modern digital mobile consumer. Some other news organizations have done a good job of bringing that forth with like short form digital video, making podcasts into short form digital video. Like I mentioned, I think Fox Media has done a very good job with that. I also think being niche is like it's not a new thing. There's always been trade publications. Figuring out what it means to be niche in the digital era is really, really powerful. You know, Politico kind of pioneered this idea of email alerts for the political professional class, but there wasn't much innovation beyond that. Now I look at sort of Punchbowl, which is the very authoritative outlet that covers Congress. Like what they do with their seven minute podcast in the morning is perfect for people in D.C. with short little commutes on scooters and E bikes. I think about on the event side, some of what Semaphore has been able to do in bringing experiential to life for professionals in a way that makes it worthy of their time has been really valuable in a digital era. So I think what they're doing right is there actually making digital products that work for digital consumption. Like that was not always the case with the publishing industry. For the first 20 years of the
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B
Internet, when you Take a close look at some of these, I'll call them traditional digital media publishers or the established ones that a lot of people the consuming facing public consume against regularly. Do you ever look at anyone and say like, oh, you're moving on this too slow. You're not leaning towards some of these powerful ships or these new strategies as effectively as they could be. Is that ever a read that you're, you're taking when you're looking at some of these digital publishers?
- [13:51]
C
All the time. All the time. And you know, one of the reasons being like what kind of cash flow do you have to reinvest in new product development? You know, this is the issue, I think I can't speak on behalf of them, but I do feel very passionately about the brand. You know, with cnn, given all the ownership changes, one of the challenges that they face is that it becomes hard when your parent company has a lot of debt that needs to get paid down to reinvest sometimes in your own properties. Now Warner Brothers Discovery, they really valued CNN and they did say to CNN like, we want to give you like 10% of your profits to reinvest in digital. But a lot of companies don't have that luxury and especially traditional media companies that still do have like hefty cash flows. That is where I think a lot of them are going wrong. They just don't, they don't have the money to invest. And so how do you stand up a podcast division or new experiential division or short form video divisions or rearrange talent contracts like when you don't have quite frankly, like the resources to do it?
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B
I wonder about getting scrappy and how scrappy some of these organizations attempt to be before moving down some of the pathways that you're describing. But that's a bigger conversation for another day. I do want to spend a couple of our final minutes together asking a little bit about AI. Sarah, when you talk to publishing executives about AI, do they sound more worried about losing traffic, losing revenue or losing relevance?
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C
The biggest one is we do not know how courts are going to come down on the issue of fair use with AI, which means that it's very hard to broker fair deals right now because you don't have to understand of like what's fair value. And so that's like the big existential crisis. But we should know, we should start to understand a little bit more once some of these cases get litigated. The New York Times Suing OpenAI and Microsoft is considered kind of like a bellwether for what we should expect, how courts will handle that. I do think that they think it's a threat to all of these things, to revenue, to relevance, to everything. But it doesn't have to be like, if you can harness it correctly, actually it'll boost all of those things, you know, revenue and relevancy and audience and engagement. But again, harnessing it correctly right now is very difficult when we don't have legal framework in place to understand what leverage you have when negotiating with platforms for their tech. I think if we had some of that clarified, it would empower publishers to move much more quickly in terms of how they're thinking about partnering with AI companies or honestly suing them for money that they can use to reinvest in technology. We just, we're not quite there yet.
- [16:18]
B
You often report on negotiations happening between publishers and AI companies and kind of talking about that now. What's the biggest misconception people have about the relationships that publishers and AI companies have today?
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C
Well, I think that people think that a lot of these deals are only about the input. Can an AI company use your data, your stories, your content to train its algorithms? But so much of the debate has really shifted to the outputs. Who owns and who has rights to and who should be able to monetize content that's created from AI LLMs that leverages the IP from these companies. That is very much not well litigated and understood right now. And then I also think nobody who's a serious news executive thinks that it's wise or responsible to have AI replace journalists or writers. Everyone recognizes that AI should be supporting them, empowering them to do even more by supplementing menial tasks like sorting through data and things like that. The challenge right now is a lot of media companies are under such financial distress, and it's not, it's not as clear to them how they can use the tech to empower journalists instead of replacing them. That's causing a lot of union issues. It's causing a lot of internal and external morale issues. So I think those are the two big topics where there's just a lot of misunderstanding right now.
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B
We've already talked about the impact of consolidation, especially when it's happening in a clunky way, or the impact of not moving at the pace of audience expectation. What's one thing that traditional media companies still misunderstand about about audience loyalty?
- [17:56]
C
I mean, a lot of it is just how easy do you make their lives? Like most churn for media companies is credit cards expiring and people just being annoyed about having to go and put their information again. You know, the media companies integrating with Apple pay like that resolves that challenge. I think with newspapers, the amount of people who just hang on to subscriptions until they die because like, you know, the technological capabilities for canceling is also typically not been there too. And that's been like consumer frustration for a lot of people. I just think that you can't underestimate the power of having good product. And news companies just traditionally have not been innovators. The New York Times has been, but they're the exception and not the rule.
- [18:35]
B
Final question, because I know we're short on time here. What's the signal you're seeing right now that feels small today but could become a major story in three years?
- [18:43]
C
I think that a lot of the regulatory agencies that are responsible for regulating the media industry are becoming less and less independent and are becoming more under the the helm of the executive branch. And that's problematic. You know, we traditionally saw the FCC as being independent. So whether or not they approve a big merger had nothing to do with whether or not Trump liked you or whether or not your late night host said something. It was whether or not there was like a competition problem and the FCC could independently evaluate that. We're not really in that place anymore. I think the Supreme Court appears poised to hold a lower court ruling that would basically empower the president to fire FTC Democratic commissioners that he doesn't like. So it's that sort of thing.
- [19:20]
B
Well, I know it's 1:30 on the dot Eastern time, so I want to let you go and also appreciate the time talking about so many things that are happening in the media space today.
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C
Thank you. Talk to you soon.
- [19:31]
A
The media industry has needed to reinvent itself before and as Sarah points out, it's working to do it again. Whether the conversation is AI consolidation, digital publishing, or audience behavior, the companies that succeed won't simply react to change. They'll need to build for it. A big thank you to Sarah Fisher of Axios for joining us and sharing the perspective she's gained from covering the media industry's biggest stories. If you enjoyed this episode of AdTech Unfiltered subscribe wherever you get your podcasts, leave us a review and share this episode with someone who wants to better understand where media and advertising are headed next. I'm Enor Nasir. Thanks for listening and a lot of new episodes out real soon.