Digital media companies are caught in the "crap trap," mass-producing trashy clickbait so they can claim huge audiences and often higher valuations.

Here is how they fell into this lethal trap: They got into the content game to produce news or info they might be proud of, believing they could lure us to read it and maybe even pay for it. They quickly realized it's expensive to produce quality content and hard to get a lot of people to click on it, much less pay for it. So they deluded themselves that the better play was to go for the biggest audience possible, using stupid web tricks to draw them in. These include misleading but clicky headlines, feel-good lists, sexy photos and exploding watermelons.

And it appeared to work. Traffic spiked. Costs were contained. But revenue never followed because everyone else was doing the same tricks and getting the same spikes—and the simple law of supply and demand drove down the value of their inventory. This dynamic helps explain why Mashable recently laid off so many journalists, BuzzFeed saw its growth miss the mark and many media companies and investors are freaked out.

Here's the good news: This era is getting flushed away. Some companies feel self-conscious about the trash they are producing. Many others realize it's simply not a good business model. But the savviest ones see a very cool reason to change: A content revolution is picking up speed, promising a profitable future for companies that can lock down loyal audiences, especially those built around higher-quality content.