Old media lost its ad money along with its audience.
With ad space abundant everywhere, even ambitious publishers cannot gather enough dollars to pay for a newsroom.
BIG IDEAS BY NEW ECONOMIES · Why Startup Valuations No Longer Make Sense | Eric HippeauThe old news business was really an advertising business. A magazine or a TV network gathered a large audience in one place, and advertisers paid to reach it. The bigger you were, the more ads you could sell.
That math broke when advertising went digital and programmatic, which means ads bought automatically by software across millions of websites and apps. Instead of buying space in one publication, an advertiser can now reach people almost anywhere. Ad space became abundant and scattered, and two giant platforms captured most of the money.
Eric Hippeau, a venture capitalist and former chief executive of the Huffington Post, says pulling together enough advertising to sustain a publisher has become very hard because the big platforms, Google and Meta, take the great majority of the dollars. The more a publisher spends on reporting and production, the more ad supported it typically needs to be, and that support is no longer there for the taking.
At the same time, the audience scattered too. Magazines still exist, Hippeau says, "but you never publish a new magazine today." Broadcast television survives mainly for live sports and an older audience, while young people never watch it. Streaming is mostly entertainment.
Distribution now has to be rebuilt piece by piece on YouTube, Instagram, and TikTok. That favors small and personal operations. A single newsletter writer, a podcaster, or a small group like All-In, four tech investors who run a podcast, can build a profitable following without a newsroom. The traditional media company, built to gather a mass audience and sell it to advertisers, no longer has a fuel supply.
Questions people ask
What does programmatic advertising actually mean?
Programmatic advertising means ads are bought and sold by automated software, often in milliseconds, rather than by people calling publishers. An advertiser sets a target audience and budget, and the system places the ad wherever that person happens to be. That made ad space almost infinite, which pushed prices down for most publishers.
Why do Google and Meta get so much of the money?
They own the places where billions of people spend time and where advertisers can target by age, location, interests, and behavior. Google captures searches made when someone is ready to buy, and Meta captures detailed attention on Facebook and Instagram. Together they account for roughly half or more of global digital ad spending in recent years.
Can't publishers just charge subscriptions instead?
Some do, especially newsletters and niche publications, but it is hard to scale. Most readers will not pay, and competing for subscriptions against free social video and podcasts is brutal. That is why Hippeau argues a small, profitable newsletter can work, while a large, general newsroom struggles.