The Guardian wonders whether “massive media companies have a compelling reason to exist in an era of media fragmentation”:

The argument is simple: as global media conglomerates struggle to hold position against falling sales in publishing, a fractured TV market, music piracy and advertising migration to old fashioned billboards, what are these groups for? The market also seems tired of them. Shares in ‘old’ media firms have fallen 25 per cent in the past two years; Google is now equal in value to Walt Disney, News Corp and Viacom combined.

The larger question, it seems to me, is whether there are any economies of scale left in media. If the costs of content creation, distribution, and viral marketing are near zero, is there a viable growth business model for media companies of any size? Will the fragmentation that’s shattering the media landscape make it impossible for any media company, save brokers like Google, to maintain revenue growth when the value is being scattered to the winds? (Even Google’s growth may hit a brick wall when there are no advertising dollars left to squeeze out of the market.)

For most of the 20th century, the economics of media were based on a mass audience — including within niches, i.e. you could reach the entire audience within any given niche. Now that even niche audiences are fragmenting, does the business of media need a fundamental reorganization? It strikes me that even the Web 2.0 vanguard is still working within the old model of building — and ultimately trying to monetize — an audience in a centralized location, i.e. a website.

Each time I raise these questions, I keep coming back to brands — if a brand like BusinessWeek can create value in a dynamic, medium-agnostic fashion, can it effectively monetize the value that the brand creates?

A lot of questions, but few evident answers. Google figured out a way to monetize media value in a way that nobody had ever thought of before, by leveraging technology to create efficiencies that were beyond the capacity of human intelligence. But what about human intelligence? We need to dream up a new way to monetize the value created by human intelligence in media.