“Are we there yet?” – Challenges and opportunities in mass media industries
Mass media industries have been around for centuries. The first emergence of newspapers can be dated all the way back in the 1700s. TVs have been around for 80 years. Never before has the industry been so challenged and at the brink of a meltdown. These industries have always been a one-way street, where content is professionally and centrally prepared, then pushed to readers / viewers who are in front of a newspaper or a TV. The surge of smartphone has created a new need for people to be “socially-connected”, both as means to share information and content faster, and as a new way to “verify” the validity and relevance of these information.
What’s happening to newspapers in the last decade?
Fundamentally, the use of printed matter has a flaw – info has to first be collated, formatted and edited, then takes time to print and distribute. The word “news” – meaning what’s happening NOW – has to be “right now” and current for it to be meaningful. I’d like to briefly analyse the market (from my point of view) on what’s happening and what opportunities exist for media companies to transform themselves to suit the new world.
The current newspaper market is divided into two main categories – the traditional, paid newspaper; and the free-of-charge, condensed ad-supported newspaper which are freely distributed. Clearly, given a choice, people would rather go for free newspaper (afterall, why would you pay for something which you can get for free?). Unsurprisingly, most free newspapers out there are indeed owned by media groups who also printed paid newspaper. Content can be somewhat shared between the two, freeing up labour capital for the free newspaper to hire into sales teams, to sell more ad-slots within the free papers.
Free newspaper is a solution in order to:
1. Business as usual – switching parts / all of the business from paid to free would allow minimum corporate structuring, limit layoffs and to keep corporate image
2. Keep the engine running – Newspaper is a publishing industry which requires a lot of contracted printer capacity and logistics. Switching to free newspaper would be able to use most of these contracts until it runs out, buying valuable time to figure out a more long term solution
3. Retain your clients – Most clients who sign on for advertisement slots are buying into the newspaper’s reader base. Switching business model, but not the medium on which the advertisements appear, would prevent your clients from flocking to another competitor.
So that’s all good, what seems to be the problem? While free newspapers is a new trend which is slowly replacing the drop in paid newspapers, the change in the two numbers are surely not proportional. It’s a temporary solution to an immediate problem.
The more crucial, and perhaps more killer issue here is that, the rise of other online verticals are slaughtering the newspaper sector. News reporting is moving towards social networking, and decentralizing from reporters / editors into everyone’s hands. A quick Facebook status update or a quick Tweet gets news around the world in seconds. By the time newspaper reports gather more information, wrote up the story and got printed on paper the next day, the headline news would have gone around the globe 50 times, making it moot to read about the same story on the papers.
The use of news portal (e.g. reading news on MSN / Yahoo!) is also proving to be a challenge since news is provided to readers for free, although this has never been too much of an issue since some of these content were sourced from news publishing companies so they’re just selling this data B2B.
What can newspaper companies doing now to more permanently address the issue?
Despite newspaper’s fundamental flaw of not able to provide news “on-the-fly” and losing out to convenience of smartphones / tablets, there are a couple of things publishing companies can do.
1. Continue the move into free newspaper – We’ve just talked about it haven’t we? This is a good move. Readers are being spoiled by the internet era. Everything that’s available on the internet, including news, online video, games, email, are all offered to them for free. Offering newspaper for free is one step closer to satisfying their mindset
2. Embrace the smartphone – Certain mass media companies, Bloomberg for example, have done an exceptionally good job in developing an app. Bloomberg app would even pop a one-line headline on your notification centre for important news, then follow-up with a full story write up.
3. Branch out into other news – General public news, while informative (and potentially life-saving), is not interesting enough. When their major source of revenue (paid / subscription) is quickly diminishing, mass media companies would have to look at advertising as a bigger contributor of revenue source. To that end, having more specialised content serving advertising clients in the same sector would provide the highest conversion and ROI. I would suggest making a series of smaller and more specialised online blogs. While they don’t have the necessary traffic, their small employee base do provide excellent, accurate and highly in-depth content in their own field. Imagine if the NYTimes provide better content in technology, food and shopping than it currently offers.
4. If you can’t beat them, join them – Develop your own real time news release platform, then entice the general public to publish news headline on your platform as well when they do a status update. Or better still, if a tech company can develop an algorithm which indexes Twitter tweets and automatically figure out which ones are news/headline related if they are being tweeted for a massive number in a short period of time, that would be gold.
Oh wait… what about TV companies? What’s going on with them?
TV companies are facing competition with other online companies but for a very different reason. Back in the day, if you missed an episode of a series on air, your only solution is to wait for a re-run which may or may not happen. Then VHS came around to hopefully sort out that problem if you know upfront you won’t be sitting in front of a TV during that period. (For the sake of the newer generation, that’s TiVo’s ancestor). Then came the DVDs where TV series are sold by season as well, although that’s more of a secondary revenue stream more so than a competitor to air time on TV.
With the rise of smartphones, tablets and perhaps the increased use of laptops as the major in-door screen time, the importance of TV is diminishing. You’d increasingly see the newer generation would just have a laptop and no TV (unless they play console games, in which case they’d have a big full HD screen).
Why is that? Fundamentally, time is precious. People want to do things they minute they want to, and not be physically or clock bounded by a TV. The surge of a similar social element also allowed the massive success of Youtube, where everyone can be a director and film anything they find interesting (compare and contrast the Twitter example newspaper face).
This created a massive on-the-fly online video industry which allows users to view any video content anytime, anywhere and on any platform. Netflix (the streaming business, not the mail-to-rental legacy business) and Hulu are prime examples of companies successfully captured and monetised this new trend.
What can TV companies do now?
1. If you can’t beat them, join them – Similar to the previous approach, certain TV production companies have been making certain of their TV content available on Hulu shortly after it being broadcasted on TV in prime time. This is also part of the reason why Hulu is owned by NBC, Fox and Disney-ABC, which captures the major TV broadcasting players. Through Hulu, they earn online advertising revenue (pre-roll), and Hulu Plus is a great way to gather subscription revenue without significant reinvestment to create new content
2. Sell your content – Other players which are owned by TV broadcasting companies, e.g. Netflix and Roku, are paying good licensing money to buy content and make it available on their platform. Good opportunity to expand into new revenue stream isn’t it?
3. Showcase others’ products – Product placement, meaning the use of branded products on screen as means of implicit advertisement, is not something new.
Where are we going with this?
I’ve laid out what’s happening now. Where are we heading with the mass media? The last generation has been served by the mass media as “We’ll give you the info whenever we’re ready”, moving into the current users wanting their info “anywhere, anytime”. I suspect both newspaper and TV would move to a very common goal. They need to be highly relevant, and provided to users before they know they want it. This needs to massively utilise social networks (what are these users following on Twitter, or pages they are liking on Facebook?), big data (what email subscription they’re receiving? What apps have they installed?), and perhaps with the use of LBS, and personal data as well as their social connection so that news articles and TV programs are highly tailored.
At this point, users still need to manually select which “channels” they wish to subscribe to. One day, all this would be autonomous.
Or, if it’s already arrived, I’d love to start using this service!