Aggregation theory, inverted
Why it's time for a new fundamental theorem for technology & media
It’s safe to say that Ben Thompson’s seminal Aggregation Theory got us through the past decade of technology. But its reign seems to be coming to an end. The basic notion is that large platforms (“aggregators”) take advantage of zero distribution costs to reach everyone on the globe, quickly & efficiently. The result, then, is that anyone who supplies the market in question is commoditized — they have no option but to sell their products & services through the platform, at the price the aggregator sets.
But then a funny thing happened. After a decade of this, and countless numbers of suppliers evolving to build and market their wares specifically to sell through these aggregators, many got quite good at it. Some – we’ll call them the Super Suppliers – got really good. So good, in fact, that they began to have leverage over the aggregators.
Nowhere is this more pronounced than in media. This phenomenon is, in essence, what the term “creator economy” means. It’s the inverse of aggregation theory: after a decade of building their audiences, a class of Super Creators have emerged that have leverage over their aggregators. They simply built such large, engaged audiences that those audiences would follow them anywhere.
In other words, content just might be king again. At worst, it’s certainly no longer a second class citizen. And when I say content, I’m referring to the cream of the crop. The typical digital news article you see from hundreds of publications is still pure commodity in the eyes of Facebook, Google, et al.
These Super Creators can take several forms:
Individual personalities: Joe Rogan, with his exclusive Spotify deal, comes to mind here.
Brands: You’d be hard-pressed to find a distribution channel that thinks that they can go it without Disney(+) in streaming.
Executive creative talent: J.J. Abrams, who had to make the “tough” decision of choosing between $250M and $500M exclusivity deals.
There’s one common theme: Distribution channels are all in a race to ensure that these Super Creators participate on their platform – hopefully exclusively. The top creators on Clubhouse sure seem to have a lot more leverage over the top creators on any other prior Social Media platform.
And a predictable outcome: Super Creators will have the ultimate say on which distribution channels succeed, and which don’t, merely by their participation. These distributions channels will allocate ungodly sums of money in attempt to lure the Super Creators to exclusivity on their platform – but, ultimately, it won’t work – the Super Creators will be too valuable to be bought. See the numerous people pointing out that Joe Rogan took a bad deal by accepting (only) $100M from Spotify to go exclusive (my favorite one here).
Never in history will we see individual Super Creators accrue as much wealth as they will over the next 10 years. These gains will be winner-take-all/most – but this time, it won’t be just faceless corporations, it’ll be the individuals we follow around the internet.