The Year(s) Ahead in Media — Fragmentation

Falling Barriers, a Shifting Definition of Quality and the Splintering of Attention

Starting April 2025, all full posts, including archived posts, will be available on my Substack, The Mediator.

DALL-E 3, prompt: “a pane of glass shattering in a million pieces”

Note: This is the first post of a four-part series. Here are parts 2, 3 and 4.

Around this time of year, a lot of people publish their top predictions for the media industry for the coming year. As a bit of counter-programming, in this series I lay out a framework for value formation in the media industry over the next five-10 years.

The media business is noisy, but here I try to focus on what is enduring. I explore four trends: fragmentation (the splintering of attention); disintermediation (the declining bargaining power of traditional intermediaries); concentration (the role of networks in concentrating both power and attention); and virtualization (the blurring distinction between the physical and the virtual).

In 2024, the media industry will fixate on many topics: potential consolidation or change of ownership among Paramount, WarnerBros. Discovery and NBCU; the health of the overall ad market and continued divergence between traditional and digital; whether there’s another shoe to drop after the Microsoft-Activision deal; the resolution (or lack thereof) of succession planning and activist pressure at Disney; whether early buyers will still be using their Apple Vision Pros three months later; the rate of pay TV subscriber and linear ratings declines; the weakness of U.S. box office and whether it will ever show hope of reapproaching pre-pandemic levels; streaming video churn and profitability; whether growth will re-accelerate in the gaming market; regulatory and legal pressure on Alphabet, Apple and Meta; whatever Taylor does; Netflix’s continued forays into sports and gaming; the outcome of the NBA rights renewal and fate of local sports rights; the implications of Amazon entering the CTV ad market; the outcome of UMG/TikTok negotiations; what show/movie/album/game will be a surprise hit or flop; the fate of local news; industry-wide layoffs; and the blistering pace of advancements in GenAI, among many, many others.

All of these examples are manifestations of these four structural trends. They are tectonic in the most faithful sense of the metaphor — mostly unnoticeable day-to-day, but powerful, far reaching and (probably) unstoppable. Collectively, they make up the backdrop of operating in the media business today.

Tl:dr:

• Media is mature because time spent with media is so high (in the U.S., more than half of non-sleeping time). Since time isn’t growing, overall value isn’t growing either. The key question is how it will be distributed.
• The goal of this series is to establish a framework (ambitiously, a sort of “theory of everything”) for thinking about how value flows along the media industry value chain over time between creators, traditional intermediaries, new intermediaries and consumers. It comprises four tectonic trends: fragmentation, disintermediation, concentration and virtualization.
• All these trends started with digitization. It was the Big Bang moment for modern media because it created a universal language for information goods and paved the way for universal innovations.
• This post examines the first trend, fragmentation.
• Fragmentation is occurring for two reasons: systematically declining barriers at each step of the content development process (production, marketing, distribution and monetization) have led to a near-infinite amount of content; and the very introduction of that content is changing consumers’ definition of quality.
• An empirical look at fragmentation shows that while there is not much shift in time spent between media formats (video, audio, gaming, etc.), there is significant fragmentation happening within each format.
• GenAI will accelerate this trend by making high production values more accessible even for the most demanding content formats, like premium video and AAA games.
• Value flows to scarce resources. As content becomes infinite, a few things become relatively scarce: attention; hits; first-party data; curation; community and fandom; IP and brands; marketing prowess; and IRL experiences.
• In the next post, we’ll examine the second trend, disintermediation.

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