Can the business of the media industry survive?


COMMENT | The Malaysian courier ceased publishing his print paper in 2018, completing a 122-year series. The Tamil Nesan closed in 2019, five years before its centenary. Chinese daily Oriental Daily is the most recent victim, having closed in 2021.

They are not alone. A american study found that 1,800 newspapers closed. In mid-2020, News Corp announced that more than 100 newspapers would be stop printing in Australia.

The newspapers that remain alive have shrunk, both in terms of circulation and revenue. The Audit Bureau of Circulation which measured distribution in Malaysia closed in 2019, so it is difficult to measure the decline.

Industry sources put it at well under a million newspapers sold daily across the country, only about 20 percent of its peak of 4.7 million copies in 2007.

The number could be even lower, during times when readers were under lockdown related to the pandemic.

Is digital getting better?

You would think that with the digital switch-over, the media would bring everything they lose in print back online. This also appears to be the case for many players entering the market. Why would they do it, unless it pays off?

The internet, especially the growth of smartphones over the past decade, has brought information instantly to over 90% of the adult population. Major news sites would typically reach over a million users per day.

In print, a circulation of 100,000 copies can generate RM 1-3 million in advertising revenue per day or approximately RM 10-30 per reader.

In comparison, online ad revenue can vary between one and three sen per user, generating between RM 10,000 and RM 30,000 in advertising revenue per day, almost 1,000 times less than in print.

why is this the case? Tech giants – especially Google and Facebook – are able to offer advertising at considerably lower rates, as they gain access to billions of users around the world.

Advertisers are able to spend less and reach more customers using their giant platforms, instead of buying more expensive ads directly from media companies.

The drain on the media is not just due to intense competition from tech giants. The Internet has also allowed other forms of competition.

Piracy has become a major problem. Pay-TV providers such as Astro have been hit with streaming boxes that are able to offer the same pay-TV channels for free through a one-time purchase or through a monthly subscription at a much lower price.

Astro is able to reach out to an older, less tech-savvy audience, but has struggled to attract new audiences.

Piracy is also a major problem for news sites – their original content is often copied and reposted on anonymous websites, which generate income by working with advertisers.

This form of piracy infringes copyright and reduces advertising revenue for copyright owners. However, little action has been taken by the authorities to combat this form of theft.

The media market is also now global. The public in Malaysia can access many multimedia sites on many platforms, both for entertainment like Youtube, Netflix and Disney +, for news or entertainment sites. Malaysians are no longer confined to Malaysian-based media.

The internet also offers a lower barrier to entry. Anyone can build a content site overnight, from serious editors to bloggers and influencers.

Brands are no longer dependent on the media to get their message across. From billboards to email campaigns and social media pages, brands are now investing heavily in building a direct relationship with their existing and potential customers, without depending on digital and traditional publishers.

So why isn’t there a lot of effort to save the industry? There is little pressure from the client or the public. In fact, from the perspective of the connected public, it’s a golden age of information.

They have access to more media choices than ever before. Media is now more attractive, faster and cheaper than ever. Bad for the industry is a boon for the consumer.

In response to this disruption, the print and broadcast media have had to drastically downsize. Layoffs, newspaper closures, hiring cuts have all taken place.

How to save the industry?

There are a few schools of thought and approaches. One approach has been to get those who have benefited from the digital disruption to contribute to the industry again.

For example, in early 2021, the global media industry saw Australian media lobby and get the government to pass a law (formally known as the Mandatory Media and Digital Platforms Trading Code) that requires the big guys to Google and Facebook technology to negotiate income. media sharing agreement.

The law strengthened the position of Australian media to demand a higher share of advertising revenue.

However, it is still unclear to what extent the media have benefited from it and whether these benefits will also be appreciated by local and smaller actors.

Elsewhere, there are also reports that Google has agreed to pay French publishers for the news.

This approach also has some support in Malaysia. Sinar Harian Ahmad Nazri Mohd Noor, Acting Head of Product Development and Data Management, said: “News portals are the opposite of fake news.

“(News portals) are reliable and authoritative. Therefore, social media platforms should pay for the content that the media produces every day. “

Sinar Harian Acting Head of Product Development and Data Management Ahmad Nazri Mohd Noor

He warned that relying solely on digital advertising and subscriptions might not be enough to cover costs and called on the media industry to work together to pressure the government to act.

“The Malaysian government should facilitate cooperation between social media platforms and news portals to facilitate some revenue sharing from social media platforms to news portals,” he added.

Other approaches called on the media to be more agile and to adapt quickly to change.

“The reality is that the print media audience has shrunk and become fragmented with more interest in audio and video, hence the proliferation of non-print distribution channels or platforms. information “, said Malaysia Insight eeditor and CEO Jahabar Sadiq.

“Our choice is simple, we track and build the audience for those channels – more video, audio and to some extent long-form journalism – which can be sponsored or have paid content and to subscribe to. “

He argued that breaking and topical news must be sacrificed in order to attract a discerning audience that is willing to pay for quality news content.

“In the Malaysian context, this will mean linguistic and demographic differentiation to broaden sources of income. “

He said one way to cut costs is for the industry to accept “a common payment gateway, a wallet infrastructure for all subscribers to access …

“What should differentiate us is our approach to journalism, thus offering a choice of news and content rather than having too many platforms and payment options,” he said. editor Terence Fernandez also called for innovation, but more at the level of the advertising model.

“The advertising budgets of many companies have now shifted from marketing to communication. With this in mind, the media should consider venturing into the realm of reputation management, communications consulting and training.

Editor-in-chief of Terence Fernandez

“At first glance, it’s a fine line to put on because it will call into question the impartiality and independence of the press. However, this is no different from the current challenges of having customers paying for ad space.

“The dilemmas between ethics and revenue will always be present, but in my experience, maintaining editorial integrity is a selling point. Authentic brands will want to be associated with organizations that build public trust.

“Just think how many times have we, as individual journalists, been approached by politicians, CEOs, PR practitioners, etc. for free advice? Terence said, suggesting that this relationship can be monetized.

PREMESH CHANDRAN is CEO and co-founder of Malaysiakini.

This one was first published in Mediamalaisie.

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