Media: where’s it going?
I had a conversation with my brother last night about, among other things, the dynamics that are going on in the world of media. I found it quite interesting, sufficiently so to share. So here’s sharing.
Traditionally, the benefits of advertising have been relatively difficult to quantify. So people have done it on the off-chance that it works (i.e. its benefits outweigh its costs), and in the fear that if they pull it, things will turn to dust.
New media (or new meejah) has now come along and made advertising way more measurable. If things work (and are proven to work), then do more of the same. If they don’t, then pull them. Meanwhile, media owners in the less direct media (i.e. those that are generally about enhancing the brand than getting someone to click on the link or pick up the phone) are suffering. A good example here is TV. ITV is losing money hand over fist, partly because of the recession, but also in part because people are questioning the overall value of TV advertising. Further, with the likes of Sky+ and V+ becoming more commonplace, there is no longer a need to sit through adverts. (I generally watch Sunday night’s X Factor in about 16 minutes, avoiding the bulk of each performance and the adverts that litter the programme itself. A question for another time: does my active focus on the advertising as I try to perfectly-time hitting the play button make it more effective?)
Now the trouble is, traditionally the media owners have made a wedge of cash and used that very wedge to cross-subsidise the making of programming that, in isolation, isn’t worthwhile financially but which enhances the value and perception of their medium. Wildlife programmes may be a good example of this: they’re costly to make and don’t necessarily draw the same viewing figures as an X Factor, but they’re made to broaden the range of the channel and the overall appeal of the offering. And it goes even wider than this: for the big boys like News International, they can afford to keep the Sun website going because of the wedge of cash they make out of Sky. (Note here the difference between Sky the platform and Sky the media channel.)
Now with the media owners struggling, they will focus more and more on doing the profitable and avoiding the unprofitable, likely at the detriment of the overall quality of TV programming, perhaps even bringingabout the demise of TV as we know it.
The internet revolution means that people are less and less willing to pay for stuff (although the escalating costs of entertainment platforms into the home seem to buck this trend). And given that advertising is increasingly seen as an ineffective method of paying for good quality programming (TV advertising costs have reduced by 15% in the last twelve months), the only logical outcome is for TV to become unviable, just as newspapers seem to be going. (While the cost of content delivery is variable, the cost of producing good quality programming is somewhat fixed.)
But people generally miss things when they’re gone, as John Willshire pointed out with respect to Media Week and its recent move to an online-only medium. And rarely are those people given the choice (not that they’d necessarily take it) to pay to save what they unknowingly love. So unless there are some forces that come into play fundamentally change the dynamics of the media industry, we’ll lose some stuff that we love but aren’t prepared to pay for: newspapers and TV to name but a couple.
Thanks to Ben for the insight.