To say that the Internet has changed the media business is so obvious it barely bears writing; the media business, though, is massive in scope, ranging from this site to The Walt Disney Company, with a multitude of formats, categories, and business models in between.
And, it turns out that the impact of the Internet — and the outlook for the future — differs considerably depending on what part of the media industry you look at.
The Old Media ModelNearly all media in the pre-Internet era functioned under the same general model:
Note that there are two parts in this model when it comes to making money — distribution and then integration — and the order matters.
Distribution required massive up-front investment, whether that be printing presses, radio airplay and physical media, or broadcast licenses and cable wires; the payoff was that those that owned distribution could create money-making integrations:
Print: Newspapers and magazines primarily made money by integrating editorial and advertisements into a single publication:
Music:Record labels primarily made money by integrating back catalogs with new acts (which over time became part of the back catalog in their own right):
TV: Broadcast TV functioned similarly to print; control of distribution (via broadcast licenses) made it possible to integrate programming and advertising:
Source: The Great Unbundling