Content consumption is obsolete
Wither the Consumer, Part I: The problem is a matter of supply and demand
At this point, we’ve analyzed all the trials and tribulations for both legacy media and Media 2.0. Most of the ink spilled about the modern media landscape focuses on those producers and platforms. Therefore, I wanted to invert the dialogue and devote some time to consumers for a change.
This is the first chapter in my three-part series, Wither the Consumer (sic), which analyzes not only the content consumer’s predicament amidst the modern media boom, but also his/her solutions therein…
Blogging and social media have spearheaded a revolution in the way we produce digital content, but the way we consume it remains the same, old, primitive experience it’s always been — still awaiting a Renaissance of its own.
Since apps for content production have proliferated, they’ve made it easy for anyone to produce media (e.g. user generated content). So, naturally, we’ve all become producers, triggering exponential growth in content creation.
Meanwhile, there hasn’t been a proportional advance on the consumption side of the balance, which has really been devoid of those revolutionary types of innovations to help facilitate our reading, watching, and listening experiences.
Our antiquated means of content consumption cannot keep-up with turbo-charged production. Empirically, we’ve reached a breaking-point here and now: content creation is still increasing exponentially (+500% by 2020e), yet our capacity for consumption recently topped-out (an average of 15.5 hours/day in 2015).
The macroeconomics of content
Technological innovation caused an outward shift in content’s supply curve known as a “positive supply shock.” In accordance with classic economic theory, this favorable supply shock has increased the quantity of content output and lowered its price per unit.
This should be a qualitative benefit for consumers, since they can get more content for the same total spend. This also should have no net economic impact on producers, whose lower per unit prices are offset by higher volume.
However, what should theoretically happen isn’t what has actually happened, because of the elasticity factor. Here, elasticity means that, the shape of the demand curve for content is kinked. In reality, this demand is relatively elastic up to a point, whereafter it becomes perfectly inelastic — beyond a particular quantity of content output, no drop in price can increase demand. In layman’s terms, our demand for content is finite, due to logistical realities. For instance, the day is only 24-hours long, so we can only consume so much content. (And, to the extent that an organic being were to consume more than his/her biological maximum per diem — a la second-screen syndrome — the experience should be met with negative, diminishing returns for all stakeholders… but more on that below!)
The content market’s kinked demand curve — particularly the limit imposed by the portion of inelastic demand — disrupts the “rebound effect” from something known as Jevons Paradox: While technological innovation has increased the efficiency of producing media, thereby lowering the cost of production, we’d expect a rebound effect from consumers, whom classical economics would expect to increase demand — spending their unit savings to purchase more utility — and therefore offset producers’ losses from the drop in unit prices. Without this offset, the media market is missing its transmission mechanism for rearing a higher aggregate quality of life as a consequence of its disruptive innovation.
The supply-side of the content market is currently beyond this outer-bound. Producers are making too much media, and consumers don’t have the time to consume that excess — even after publishers have effectively reduced prices to zero.
The inefficient waste from this supply glut is called deadweight loss, and there are only two realistic, sustainable outcomes to such a structural disequilibrium…
- Supply reversion:
The supply curve may shift back inward, meeting demand at a new equilibrium right at the fulcrum where the kinked demand curve turns from elastic to inelastic.
This can happen for a lot of reasons. For example, producers could get washed-out or consolidated, having been unable to make the unit economics work at such high production levels. Alternatively, producers could cut output, shifting emphasis to quality over quantity.
- Positive demand shock:
The demand curve may have its own outward shift (akin to the one the supply side’s already experienced), meeting supply at its new, natural equilibrium.
Conceivably, this can only happen as a result of technological innovation that enhances content consumption either directly (e.g. biotech implant augments speed-reading) or indirectly (e.g. self-driving cars give us 2 extra hours of free time per diem).
What’s going to happen? Nobody genuinely knows, because, while #1 seems inevitable, #2 is a moonshot. The required innovation is probably already bubbling in some entrepreneur’s cauldron as we speak, but it’s so remote as to go unnoticed.
“What follows digitization is deception, a period during which exponential growth goes mostly unnoticed. This happens because the doubling of small numbers produces results so minuscule they are often mistaken for the plodder’s progress of linear growth.”
— Peter Diamandis (Bold: How to Go Big, Create Wealth and Impact the World)
In the meantime, the ripple effects from this disequilibrium are appearing everywhere, and it’s fascinating to see not only where these externalities are manifest, but also how consumers are adapting. While “the consumer’s burden” sounds trivial, the magnitude of both the economic and intrinsic waste is shocking: the time-suck; the manhours; the opportunity costs forgone in our personal and professional lives.
To wit, here are some data to quantify these effects. I’ve organized everything under four major categories, each representing a fundamental, foundational, base-layer, primitive interaction in the digital content consumer’s experience: Discovery, Consumption, Retention, and Collaboration…
I. The DISCOVERY problem
Since there’s so much content out there, we waste a lot of time trying to find the right media to consume at the right time. For example…
- Professionals spend 26% of their workday just searching for content at work, and that time-commitment is increasing +29% per annum as more content gets created.
- Consumers spend more time searching for content (21% of the average day) than actually consuming it (20% of the average day), which is amazing considering how much time long-form video like TV/movies/streaming/etc. contributes to consumption…
- The average American regularly browses 12 sources of content, and Millennials browse a staggering 14 sources on average!
- Content’s signal-to-noise ratio is weak, with only 22% of digital data even considered useful.
- …utilization is even weaker, as we actually use only 5% of the digital data created.
II. The CONSUMPTION problem
Overwhelmed by content and neglected by innovation, consumers have managed the best they can by adapting. For example…
- Consumer preference is shifting toward increasingly shorter-form content, as tolerance for long-form decays.
- Our average attention span has dropped from 12 seconds to 8.25 seconds (2000 vs 2015)…
- Only 9% of articles are read completely through, top-to-bottom.
- Consumers complete only 28% of a webpage on average…
- 81% of us skim the content we consume…
III. The RETENTION problem
Retention has two meanings. The first is mental capacity (i.e. cognition), wherein all of this noise makes it hard for us to mentally remember what’s important. The second is physical storage (e.g. cloud), in which all of our content is increasingly fragmented with no centralized repository for everything to be saved for future reference, making it a prohibitively time-consuming chore to retrieve or recall key artifacts. For example…
- Because our increasing cognitive load is crushing our memory, we only remember 10% of information within 3 days of consuming it
- There are too many different silos in which we find and store our content…
IV. The COLLABORATION problem
Peak content has changed our sentiment toward shared content. The mantra used to be “sharing is caring,” but now, given how inundated we feel, that altruism is overwhelmed by anxiety. Mobile notifications were once a facilitator, but they’ve become as tedious to manage as the siloed content they’ve subsumed. Even worse is that the correlation between social graphs and interest graphs is surprisingly low (i.e. who you know has little to do with what you like), so social media adds to the noise — even if it’s a better means of discovery than manual browsing.
- While we prefer to consume short-form content, we overwhelmingly share long-form…
- …and that exacerbates the inefficiencies of content consumption. Think of what happens when you share long-form with friends: you’ve already invested considerable time and effort to consume it, but now your friends all have to duplicate that sunk cost. In such a way, optimized social collaboration can increase productivity by 20–25%.
The need for real innovation
The earliest digital content imitated traditional, physical media. In fact, for a long time, destinations like newspaper homepages looked and acted just like their physical predecessors. That made sense too: We were all familiar with the metaphors, which muscle memory helped flatten the learning curve for early adopters.
A lot has changed over the last decade though. As we’re now all online all the time, content producers have to meet consumers where they live, so “digital native” and “mobile first” have slowly become priorities (for most outfits). The new frontier has started to give digital media its own style that’s less dependent on skeuomorphic metaphor and more imaginative, more creative, more original. Such UI/UX improvements are welcomed reactions to evolved consumer habits. Nevertheless, more needs to be done proactively.
Yesteryear’s generally accepted business practices were wrought in an age of scarcity, but we now live in an age of abundance. We once had access to a limited selection of news and entertainment sources, who could only offer so many pages and so much programming. Content that was once finite is now infinite, which presents a whole other set of problems that need to be solved for consumers.
Some benefits of a free, open web are that anyone who wants to access information can, and anyone who wants to share something can. But, giving everyone a voice has created a lot of noise that’s drowning-out that which is most significant to each individual and each community.
The killer products and services were once those that procured scarce content for us; the killer apps now are those that filter abundant content for us. The challenge of the future is personalization that not only separates good content from bad (Discovery), but also facilitates the way we interact with it — from how we extract what’s important within each piece (Consumption), to how we learn from it (Retention), and how we implement it (Collaboration).
The consequences of content oversupply resonate beyond the producers themselves. “Peak content” on the supply-side and “peak consumption” on the demand weigh-on the consumer’s ability to find, enjoy, retain, and share knowledge. In the broader macro, this deadweight loss is a massive inefficiency — a misallocation of resources that drags-down productivity, widening the macroeconomic output gap.
As demonstrated herein, some kind of denouement is inevitable, but the devil is in the details. Along with solutions, that outcome is what I’ll be discussing in Part II of this series, so stay tuned…
“When it comes to the future, the tricky part is less the ‘what’ than it is the ‘how.’”
— Ben Thompson (stratechery)
An example of demand-side innovation
I just didn’t want to waste everything I read, and once I had a way to save the good stuff, I naturally wanted — or in some cases needed — to share it. That was just the beginning. Now you can join the network where one person’s annotation is another person’s summarization, so you and yours can get straight to the point without wasting time or attention. Check out “Annotote”, your antidote to the information overload: