Chronotope’s avatarChronotope’s Twitter Archive—№ 74,447

                                        1. So, I took a deeper read of WWD's excellent article on Fusion. Two non-obvious things that were pretty important wwd.com/business-news/media/fusion-faces-new-reality-10736936/ ...
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                                        1. The strong indicator that biz side believes journalist salaries have a ceiling and that ceiling is below what Fusion was paying.
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                                      Followed by a strong indication, right or wrong, journalists tend to eat their own when strong signs of income inequality are obvious.
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                                    The question of how much should journalists be paid is likely the number one issue dealing with the merge of Fusion and Gizmodo...
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                                  In that the labor protections of unionized journalists are almost certainly the reason why Fusion's employees were hit hard.
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                                What this leads to is unclear. Journalists will likely see increasing salary pressure at an asymmetric rate. Good argument to unionize.
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                              2. That, putting aside the programmatic market, the direct sales market is shrinking. I've not seen numbers on this but...
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                            ... the statements here, the centralization of the sales team, the events at Medium, all seem to indicate that...
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                          ... companies under a decade old are unable to make significant strides in entering direct sales as a strategy. This is troubling...
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                        Because almost every news startup pitch focuses on branded content and direct sales as a differentiator.
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                      If that market is not just shrinking, but actively resisting entry, and resisting programatic has become a news startup trend...
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                    How are the young cool media companies on the block making money?
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                  I'm sure there are some shortcuts a smart company could take. But these types of moves are resisted as too uncool for these media startups:
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                Engage fully in promoting and making PR heroes out of good sales people in the same way they do journalists
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              Or Competitively hire good direct sales people who have full rolodexes away from large old media companies.
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            But media is ideologically opposed to giving sales the level of respect required to do either of these things. A bias carried to newbies
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          Conclusions: 1. asymmetric digital media labor unionization will lead to bad times for the un-unionized and increase stability for unionized
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        It is also likely to shrink the market but the market was bubbled so it's going to suck but be better for the industry long term :(
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      (Not a criticism of unionization of labor I support it. What this indicates is that digital media workers are near criminally underpaid)
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    (As I've noted before, the aspect startups tend to optimize their profits around is exploitation of labor, free & underpaid...
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      ... Because startups are built around essentially abusing labor, taking that away from them will cause them to collapse. Arguably a net good
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        but because these startups have no real business plan other than cutting worker costs, employment will be less available.)
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          2. New digital pubs (say Vox) pushing direct sales, at least those with the same content profile as Fusion, are likely in serious trouble.
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            Whatever they are saying about sponsored content, etc... if the direct sales market is shrinking and/or resistant to new entries?
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              There is unlikely to be a sudden inflection point where these properties suddenly have enough traffic to make a difference.
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                And if they are (for good reason) resistant to programatic, then their choices become betraying their intent or collapse. Likely:
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                  What we'll see soon is new media startups first betraying their intent, then dropping quality and finally collapse, one after another.
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                    Obviously a lot of guessing here based on company statements, but these seem to be issues increasingly worth speculating on.
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                      So props to kbsmoke for writing a great article with lots of red meat to sink our teeth into. wwd.com/business-news/media/fusion-faces-new-reality-10736936/


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