An abridged print version of this article was published in Money Media magazine and made available on the PDMS blog
Like the advent of Mr Gutenberg’s first bible, the Net has revolutionized the way we humans develop, process and consume information. If printing represented the beginning of the information revolution, the internet has offered us our second instalment. While liberating, the Net has also eaten away at the domain of the traditional media. This article discusses its future.
Moving back to the island this year, I was resolute to shed unnecessary ‘things’. I disposed of filing cabinets and countless books in favour of the ‘cloud’ and an eReader. With an RSS Feed Reader pulling content from all the major news outlets around the world, I also abandoned my daily paper. With Gartner predicting that mobile devices will outstrip computers, I suspect I will not be alone for long in my minimalist approach.
Older generations, whom Media tycoon Robert Murdoch labelled “digital immigrants”, may not have noticed but young “digital natives” from a broadband generation increasingly get their news from web portals such as Google, blogs and social bookmarking facilities.
While I agree that books have a certain familiar smell and feel, I believe the benefits of my minimalist approach outweigh any loss I suffer. Not only had my news been dated by the time the ink was dry, but it was parochial and ‘shaped’ in a manner I was no longer happy with. Storage, disposal and waste were also a concern, like many of my age I’m concerned with my environmental footprint. However, if I’m a sign of the future is traditional print news just old news?
How to pay
In considering the state of digital media, the two biggest factors that must be dealt with upfront are Google and the BBC. Essentially these two monoliths have had the effect of warping markets and damaging established business models to breakpoint. With iPlayer delivering largely tax funded content the UK state broadcaster has operated outside the ‘real world’ environment. They simply haven’t had the same Digital Rights Management (DRM) concerns as a commercially sensitive provider.
Likewise Google, without the costs of production, have benefitted from a false economy. Earning advertising revenue via services such as Google News and Google Search they have directed users to content they have not had to produce. The question must be, can the source of media content still hope to earn enough to cover their costs?
Firstly, it must be said that the decline of newspapers predates the internet. The business model of publishing, with herculean printing, distribution, storage and disposal cost – is simply antiquated. The business model is broken and simply retained as a barrier to entry – it retention buys its owners credibility and prestige.
Despite this, I would argue there remains real demand to be exploited in areas such as niche hobbies and local services. There is no doubt that recent economic shocks have wreaked havoc on small and local businesses, bastions of regional advertising revenue – cars, houses, and job postings – have all been hammered. No longer are local advertisers feeling obliged or inclined to take the approach of “we pay the media and hope something happens.” Instead, the money which had supported local press has moved where returns are more measureable, forcing regional media to re-justify their existence.
However, where TV overindulged without concern for its business model resulting in an under valuing of their product – it would be a mistake for local media to rush to do the same. Instead, it is important that regional media outlets consider now how they will interact with online news.
Something worth paying for
I frequently pay for ebooks, I maintain subscriptions to media services like Spotify online while holding long terms subscriptions to various magazines such as the New Statesman and Esquire. I also see no reason why services like the New York Times or Economist should be expected to offer me free access to historical editions. Clearly, quality content – even for an early adopter – has its price.
Yes pirates exist, but pirates, like those tech savvy individuals who taped songs from the radio as the result of being unwilling or unable to pay for records, will always exist. The challenge is winning over customers who have not yet fallen to that dark side by providing a convenient pay solution. Essentially, this was a core part of the success of iTunes.
Though I maintain subscriptions for delivered services I believe my practices will change quickly. Yes, receiving post that isn’t a bill is nice. But, I would certainly rather an iPad/tablet/mobile device that was delivering my regular shot of quality news and opinion. Whether or not the magazines I am fond of develop a effective long term digital strategy –be that a monthly download or an online archive – I expect that I will move away from hard copy.
Something I own
While the conglomerates recoil at free broadcast, lending and sale of second hand music, games and music this is also integral to the debate. How many artists would you have missed without the radio or beloved authors passed over without a recommendation for a friend?
Devices like media readers won’t last forever or even a decade for that matter, certainly not as long as my much loved hard backs. As such, I want a standard open platform for print material much like MP3 did for digital music. I believe people inherently want to ‘own’ the media that shapes them to do with as they please rather than simply ‘borrowing’ it for the limited life of a device.
On pricing, a silent war is ongoing within publishing houses. NY Times publishers are currently debating whether users must fork out the full cost of a hand delivered print subscription or a new download subscription. Without the costs of production and delivery, they may be setting the bar too high. If this is the case, ‘digital delivery’ might falter and fall at an opportune moment.
The music industry committed suicide by failing to embrace demands of the market. Even the mighty iTunes was forced to adapt its course with regard to DRM in an effort to go ‘main-stream’. The published word isn’t dead just yet – though rights management and pricing should be the biggest concerns to be addressed before it is too late.
What has changed?
The internet is not bad for media – it merely poses new challenges. Yes, physical distribution will slacken over the next decade until it reaches a tipping point where it is no longer cost-effective to publish it but news organisations will just need to be leaner and perhaps operate more virtually to contain costs.
Increasingly people prefer to log onto the Web to read up to the minute news, and to post their opinions on it. Media has become more of a dialogue, a two way communication process that encourages instant interaction between publisher and reader.
Marketing has also become more personalized and targeted than ever before. Sophisticated advertisements are served based on demographic information as this has delivered advertisers a more demonstrated return on investment.
Time isn’t up for the establishment; much of the quality content which we consume online originates from traditional sources. Like all industries, particularly during recession, well managed moves online to reduce costs should be seen as commonplace.
The early success of new models such as Huffington Post, TechCrunch, Politico, and Hulu show that yes, there will be challengers, but each must demonstrate their mass appeal – essentially making them mainstream. However each can benefit from a worldwide market administered with more manageable costs. Quality control is no less important, but choice will become central. Reduced cost facilitates greater specialisation, and this is also easier to source online.