Surviving the Digital Onslaught By Tony Onyima, Ph.D., fnge

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  • Posted by: Imoh Robert

A WORD ABOUT TONY ONYIMA

  • Started media practice in 1986 at The Guardian. Has diverse experience in news reporting, production, operations, supply chain management, marketing, media business strategy, public policy & administration
  • Has 25 years cognate experience in media practice; 10 of which were in Executive Management positions.
  • Retired in Dec. 2013 as the MD/Editor-in-chief of The Sun Publishing Limited.
  • Member, Board of Directors, Umuoji Microfinance Bank Limited
  • Served as Commissioner for Information, Culture & Tourism in Anambra State (April 2014 – May 2015).
  • Served on the Governing Council of Ahmadu Bello University

      (2013-2017)

  • Besides his first degree in Mass Communication, he also holds MPA,  M.Sc. (Media Enterprise) & Ph.D. (Gender & Communication).

THOUGHT FLOW – 1

  1. Global Trends:

        – Pandemic-induced consumer behavior shifts      

        – PwC Global Media Outlook (2021-2025)              

  •  State of Play/Challenges:

          – Pre-digital business model (Revenue & Cost Structure).

         – Impact of Disruptive Technologies

          – Economic Challenges/Hyperinflation

          – Less Compelling (Quality) Content

          – Impact of Citizen Journalism

          – Menace of Fake News/Crisis of Confidence

          – Quality of Available Manpower 

THOUGHT FLOW – 2

.       How We Got Here

         –      Emergence of the Internet and other disruptive technologies

         –    The GSM revolution in Nigeria

          –    Media industry’s Ostrich Game

          –    Some Facts & Figures on Nigeria’s Social Media

  • What We Can Do to Survive the Onslaught

          –  Stop the Ostrich Game

         –   Evolve Industry-based Initiatives/Compare Cost Structures

         –   Change Present Business Model (M & E Model)

   –  Ready to Make Fresh Investments in New Technologies. (NYT )

   –  Hire Manpower with New Skills Set

   –  Re-train and Re-train

   –  Courage to Take Hard Decisions

THOUGHT FLOW – 3

6.  Bleak or Glorious Future?

         –   Is it Really the End of Newspaper?

         –  The Philip Meyer Doomsday Prediction

          –  Newspaper Has the Best Chance of Survival

 7.  Notes of Optimism

          –  Rich Legacy of more than 400 years

         –   Newsgathering Power

         –   Brand Name Recognition

   –  Still Most Influential, Reliable, Credible and Trusted

   –  Has Built Loyal Customers.  

8. References

OPENING QUOTES

“The venerable newspaper is in trouble”

       – Washington Post in a feature article

Published in Feb. 2013

OPENING QUOTES

If you don’t read the newspaper, you’re uninformed. If you read the newspaper, you’re misinformed,” wrote author Mark Twain. The word “newspaper” means exactly what it says — news or information printed on paper and made widely available and accessible. Digital technology  has turned the traditional newspaper into an endangered species.

OPENING QUOTES

“I won’t waste my money to buy newspaper when I can get more than what the newspaper can offer on my mobile phone”

       – A Staff of Tansian University, Umunya, Anambra State

December, 2015

OPENING QUOTES

“Forget circulation figures, print media is still relevant”

       – Mr. Gbenga Adefaye, former President, NGE

 in a paper presented in 2010

GLOBAL TRENDS – 1

  • By way of comparison, the Industrial Revolution – the seismic shift to new manufacturing processes from about 1760 to 1820 – impacted on around 20 million people over a period of 60 years.
  • Internet and disruptive technologies like mobile telephony have been impacting on the lives of billions of people over the last 20 years, making it an unprecedented event in human history.
  • This has resulted in downward trend of global newspaper circulation for more than two decades now.

GLOBAL TRENDS – 2

  • Many research results have increasingly shown that consumers now want more flexibility, freedom and convenience in when and how they consume any kind of content. They want more engagement.
  • As a result of the COVID pandemic-induced economic disruption, media and entertainment revenues in 2020 experienced the sharpest contraction in the last 20 years.

     (PwC Global Outlook, 2020-2025)

  • The induced lockdown and social distancing forced increased shift to digital platforms. And many are yet to recover.
  • GLOBAL TRENDS – 3
  • Despite the impact of the pandemic (revenues declined by more than 20%), the global news media industry was worth $112.4 billion in 2020 (World Press Trends, 2020-2021). Newspapers earned 82% of their revenue from print in 2020. On average, overall revenue declined by 11% YoY. 
  •  Global print circulation revenue was down by 13% YoY while print advertising took the biggest brunt of the crisis – it went down by 19.5%.

GLOBAL TRENDS – 4

  • Digital reader revenue and digital readership continued to increase significantly – the figures went up by 27% and 36% (outlook in 2021).
  • Even though revenues increased by 8.8%, digital advertising remains a challenge. 
  • Accelerating digital transformation was the single most important and overwhelming priority among publishers (44%) in 2020 (World Press Trends, 2020-2021).

STATE OF PLAY – 1

Newspaper business in Nigeria is marked by the following factors:

  1. Pre-digital business model: Nigerian newspaper business is still heavily run on the traditional business model. Unlike their western colleagues, Nigerian newspapers are earning little or nothing from their digital content,

  2. Impact of Disruptive Technologies: From the advent of radio, television, faster printing technologies, and the Internet, disruptive technologies have had tremendous impact on the fortunes of newspapers

STATE OF PLAY – 2

3. Economic Challenges:  As at the end of June 2022, inflation rate was 18.6%; the highest since Jan. 2017. Interest rate was 14% as at July 25, 2022 and Naira exchanged over N700 for $1. A tonne of newsprint is more than N1m.  All these impact on the operations of newspaper firms.

  4. Less Compelling Content: In media business, content is king. Remember that it is content that we sell to the advertisers. But when content becomes same of the same, we will not have the audience to sell to advertisers.

STATE OF PLAY – 3

5. Democratized Media Landscape:  Media has become democratized. Now anyone with a phone can write a blog or record a podcast. Succeeding at it is something else. But these new ‘media democrats’ are negatively impacting the business of the traditional media. 

  6. Menace of Fake News:  Fake news and misinformation are a growing menace. Even though they are largely circulated online, but they have caused crisis of confidence for the traditional media

STATE OF PLAY – 3

7. Quality of Available Manpower:   A business (in any industry) is only as successful as its employees.  Employees with requisite knowledge who are treated well help to drive revenue. We may not put our fingers on it, but all is not well with available manpower in the Nigerian media industry. Poor remuneration has resulted in lack of commitment, dedication and professionalism.

  8. Uncoordinated Response: Presently, there seems to be an uncoordinated response by the industry to the digital challenges.  

HOW WE GOT HERE – 1

1. Emergence of Internet:

On August 6, 2022 (next two days), it would be 31 years since World Wide Web was made available to the public. Invented by Tim  Berners-Lee, the new technology would later fundamentally changed the world as we knew it. Even though Tim and his collaborator, Robert, had a different purpose in mind, things moved rapidly and the Internet was deployed to wide range uses. 

HOW WE GOT HERE – 2

The GSM Revolution:

It will 21 years in the next four days when the first commercial call and rollout of GSM services on the Econet Wireless Nigeria (EWN) network, now Airtel Nigeria, was made on August 8, 2001. The GSM revolution put handsets on the hands of many Nigerians and thus unlimited access to lots of information. This seriously has impacted on media business.

Tell the Telcos’ story of content creation.   

HOW WE GOT HERE – 3

3. Effects of Internet & GSM Revolution:

The combined effect of Internet, higher broadband penetration rate and GSM has unleashed unprecedented disruptions in the way we live and work. Today, there are more than 108 million Internet users; 48% of Nigerian population now use mobile device to access Internet; 34 million Nigerians today use social media with WhatsApp as the most popular social media platform. These have unleashed digital onslaught on media business.

HOW WE GOT HERE – 4

4. Effects of Recession and COVID-19:

Nigeria experienced economic recession on 2016, followed by a second one in 2019. According to World Bank, in 2020 the Nigerian economy shrank by 1.8%; its deepest decline since 1983. The COVID-19 crisis drove the economic slowdown.  All these affected the bottom line of businesses. Newspaper houses seem worst hit.

WHAT WE CAN DO – 1

1. Stop Playing the Ostrich :

We all know the myth about the ostrich. When it is in danger, the ostrich will stick its head in a hole in the ground or in the sand. Ostriches are so stupid that they thought that if they could not see the danger, it didn’t matter.  But we are not stupid like the ostriches.

The danger before us is real and it has been with us for more than 30 years now.  We must stop pretending that somehow, it will go away.

WHAT WE CAN DO – 2

. Divided We Lose, United We Gain:  

We can only fight the digital onslaught successfully as an industry. We must evolve industry-based initiatives to respond and adapt to the digital environment. Our present individual  efforts will not take us far. Rather, it encourages news curators and aggregators to continue to infringe on the copyright of our content with so much impunity. NPAN, NUJ, NGE & GCOP must close ranks to present a common army against digitalization.

WHAT WE CAN DO – 3

3. Change Business Model:  

We must use the digital challenges as opportunities to rethink the way we do our business. Traditional newspaper model is dying. Newspaper industry MUST transform into a news, entertainment  and information business.  Inevitably, we will embrace paperless model for survival. Information has never been more important to man. Newspapers have the expertise and credibility to provide the kind of information demanded by today’s consumers. E.g. Stears Information Limited is a digital information

 company based in Lagos.  www.stearsng.com

WHAT WE CAN DO – 4

. Be Ready to Make Fresh Investments:  

Changing business model has implications. We must be ready to make fresh investments in new technologies.  Digital business is driven by disruptive technologies.

5. Re-train, off-load or Hire New Manpower: Once we change business model, one of the most critical decision to take is manpower. We may to re-train old ones, off-load some and hire  people with digital skills set. E.g NNPC Limited & newspapers that have down-sized.

THE BIG DECISION: PRINT OR DIGITAL?

  • It is evident that the existing newspaper business model needs to change so that we can survive as an industry.
  • Whether this means (i) merely altering existing model to include print and digital or (ii) a complete transformation of going purely digital depends on each organization’s circumstance.
  • Either way, we must find the courage to take the hard decision.

ADVANTAGES OF THE PRINT MODEL -1

  • Newspapers are still the most trusted news providers. This is evident in the recent study by Reuters Institute published this last June. Results of the study show that trust in news provided by the traditional media in Nigeria is at 55%, which is slightly above international benchmark of 54%.
  •  In the study, 78% of respondents say they get their news from social media and yet their trust of news on social media is at 38%. 

ADVANTAGES OF THE PRINT MODEL – 2

  • For many consumers, the aesthetic and tangible value of reading news from a broadsheet is an experience that technology has not yet been able to replicate.
  • There is a relatively large readership base that is still loyal to the print model. For them, reading the newspaper has become a habitual behavior. 
  • For publishers, print still drives majority of the advertising revenue. This is largely because of the high advertising rates newspapers have been able to sustain, despite the declining circulation numbers.
  • ADVANTAGES OF THE PRINT MODEL -3
  • For advertisers, the newspaper continues to be one of the few mass media that are not fragmented. So advertisers are likely to continue spending on the print model especially the national newspapers that have a mass target audience
  • A major disadvantage of newspaper is the increasing advocacy of environment and sustainability civil societies over production of newsprint. For instance, one cord of wood will produce 250 copies of newspaper and 10-15 cords of wood can be yielded from one acre of forest land. This is reflective of the number of trees being cut for the daily printing of newspapers.

ADVANTAGES OF THE DIGITAL MODEL – 1

  • Digital news is in high demand. Results of a recent study (June, 2022) by Reuters Institute show that 78% of sampled English-speaking Nigerians access the news weekly via digital and social platforms. 
  • For consumers, accessing news digitally gives them choice of news to select from, majority of which is currently available for free.
  • Digital news is provided on real-time basis. Online news is constantly being updated, alerting users with any breaking news.

ADVANTAGES OF THE DIGITAL MODEL – 2

  • For consumers, digital news is customizable. Users can select the news they want on their home page and they can subscribe to email alerts.
  • Digital news is interactive. Consumers can comment and join in any discussion.
  •  For publishers, digital news is gathered at almost zero marginal cost. It is eco-friendly and green, since it does not require printing.
  • Digital news defies geographical boundaries and thus opens up all to a global population, with attendant increase

     in web traffic.

ADVANTAGES OF THE DIGITAL MODEL – 2

  • For consumers, digital news is customizable. Users can select the news they want. For advertisers, online advertising rates are comparatively very low.
  • Digital news is interactive. Consumers can comment and join in any discussion.
  •  For publishers, digital news is gathered at almost zero marginal cost. It is eco-friendly and green, since it does not require printing.
  • Digital news defies geographical boundaries and thus opens up all to a global population, with attendant increase

     in web traffic.

MONEY MAKING TIPS FOR DIGITAL MODEL – 1

1. Commoditizing the Brand Equity: Many media houses have over the years built enduring brand equity. This intangible asset can be commoditized and sold to survive the digital onslaught. For instance, journalism is all about story-telling. Media houses can use in-house talents to write compelling scripts for Nollywood and be part of this $1.8 billion industry (2020 figure).

  •  Comedy and music industry were largely created by the media. Is there no way the media can participate in these areas, even if it is just organizing concerts? 

MONEY MAKING TIPS FOR DIGITAL MODEL – 2

2. Paid Content Models: Compelling content is key to paid or subscription model. Here are some subscription models:

  1. Micro payment: This is a system where readers/consumers are charged per piece of information consumed. Financial Times uses this system profitably for daily and weekly subscriptions. It signed a payment partnership with PayPal. Apple iTunes also uses this system to charge per song and more for an album.

MONEY MAKING TIPS FOR DIGITAL MODEL – 3

b. Traditional Subscription: This system charges readers for all or a portion of content consumed through a monthly or annual payment. An emerging variant of this traditional subscription is the bundle subscription (print + online). The challenge of this system is the ability to create value for online content. There is also the challenge of finding a balance between how much content to put behind the wall and what additional features it must offer in order to be differentiated, relevant and valuable. The Wall Street Journal has successfully used this system and is the global industry’s model.

MONEY MAKING TIPS FOR DIGITAL MODEL – 4

c. Metered Paywall: This system was developed to deal with the challenges of the traditional subscription model. This system  charges only those readers that are regular newsreaders, without alienating the occasional website visitors. This system is also beneficial for advertisers who can closely monitor the behavior of newsreaders by analyzing the data that publishers collect. The Financial Times allows all users to access up to 10 free articles a month, after which it charges approximately $25 a month for its regular viewers. In 2011, The New York Times also introduced a similar metered pay wall.

MONEY MAKING TIPS FOR DIGITAL MODEL – 5

d. Hybrid subscription model: This system combines a variety of products under a monthly price. Customized bundles, can include access to the website, digital archives, eReader edition, iPad and iPhone application and a special niche production.

To ensure mass adoption of devices such as the eReader and iPad, The New York Times, The Boston Globe and The Washington Post, entered into a deal with Amazon to give out lower-cost versions of Amazon’s Kindle DX to consumers who sign-up for long-term subscriptions.

MONEY MAKING TIPS FOR DIGITAL MODEL – 6

e. Vertical Offering model:  Research has shown that consumers are selective in their consumption of online news offering.  Some may just be interested in sports while others will pick news only. Online readers prefer to visit specialized websites who are experts in the other subjects. These websites have attracted readers away from newspapers. One way to compete with such specific news sources would be to unbundle newspapers according to their sections, and market them as high-value specific content. Newspaper can either charge a subscription price or

 require micropayments for these sections.

OTHER REVENUE STREAMS – 1

  1. Copyright & Fair Compensation: Internet has democratized media use and news distribution. The society gains from such system. But there is no system in place currently that recognizes and compensates original news contributors for their content. News aggregators make large revenues off content generated mostly by traditional media. However, publishers deserve a share of this revenue as the original news creators.

OTHER REVENUE STREAMS – 2

Fair Compensation:

But there is good news. A group of concerned publishers led by Reuters and Politico has formed ‘The Fair Syndication Consortium’. The objective is to bring about a change in this revenue split. In fact, a technology that will facilitate such a revenue-sharing model is already in place. Owned by Attributor Corp., the tech identifies articles and tracks its copies across the Web that the consortium plans to partner with.

OTHER REVENUE STREAMS – 3

2. Syndication &  Distribution:

Syndication is the business of aggregating and distributing syndicated content. It is an emerging business model in the mass media. It involves the sale of the same content to many customers, who then integrate it with other offerings and redistribute. Originators create original content. Syndicators package that content for distribution, often integrating it with content from other originators. Distributors deliver the content to customers.

 A company can play more than one role in a syndication network

OTHER REVENUE STREAMS – 4

Example of Syndication &  Distribution:

E*Trade: Established in 1980s, E*Trade is a pioneer  online brokerage and trading platform for retail investors. In October 2020, it was acquired by Morgan Stanley. Recognizing that it’s not a media company, E*Trade purchases content from Reuters etc. to offer its customers a rich array of information, including financial news, stock quotes, charts, and research etc.

Reuters also sells, or syndicates, the same information to many other brokerages. E*Trade distinguishes itself from its competitors not through the information it provides but

 through the way it packages and prices that information. 

OTHER REVENUE STREAMS – 5

Other ways newspapers can survive the digital onslaught are as follows:

  • They must re-focus their business model and realign their strategies.
  • Information Brokerage/Syndication – travel industry (worth $19.9 bn in 2019),  and $6.9 bn  e-commerce industry.
  • Film production and distribution.
  • Documentaries (Netflix & National Geographic)
  • Concerts

Bleak or Glorious Future? – 1

So with all these digital challenges, what does the future hold for newspapers? :

  • Does it mean the end of newspaper? Some skeptics say yes. One of such prophets of doom is Philip Meyer, a Professor Emeritus of journalism at the University of North Carolina.
  • In his book (published in 2004) “The Vanishing Newspaper: Saving Journalism in the Information Age”, Meyer predicts that the last daily newspaper reader will check out in 2044”. In fact October 2044, to be exact. “It’s shocking, but that’s what the numbers say”, he says

Bleak or Glorious Future? – 2

  • But is it really the end of newspaper? Pundits have been predicting the demise of newspapers ever since the first radio broadcast hit the airwaves. When TV came, many felt very certain that the tube represented the nail in print journalism’s coffin.
  • Rather than accepting their own mortality, newspapers have the best chance of surviving the digital onslaught than any of the old media in a new media world.

NOTES OF OPTIMISM – 1

  • Rich legacy of more than 400 years.
  • Newsgathering power
  • Brand name recognition
  • Still the most credible and trusted
  • Have built loyal customers

CALL TO ACTION

Today’s newspapers NEED to do THREE things to survive the digital onslaught:

  • Innovate around the product (news) and the user (reader) experience.
  • Develop seamless consumer (reader) relationships across the distribution channels.
  • Put mobile (and increasingly video) at the center of their product offerings.

CONCLUDING QUOTES

Put simply, today’s media industry is about consumer choice, innovation and experience, irrespective of whether delivery is digital or traditional. Mastering these three elements is now critical to how newspapers will survive the digital onslaught

CONCLUDING QUOTES

I wish to remind us that new communications media rarely eliminated the old one. The old simply adapted to accommodate the new. Radio didn’t eliminate newspaper; movies didn’t eliminate novels and TV didn’t eliminate movies or radio.

REFERENCES

Baran, S. (2009). Introduction to Mass Communication, Media Literacy and Culture. New York: McGraw Hill Higher Education

Dominick, J. (2008). The Dynamics of Mass Communication: Media in the Digital Age (9th ed). Boston: McGraw Publishers

Dare, Sunday, 2007. Guerrilla Journalism: Dispatches from the Underground. XLIBRIS PRESS

Elias, T.O. (1969). Nigerian Press Law. London. Evans Brothers Ltd.

MacBride, et al (1981). Many Voices, One World (Nigerian ed.). Ibadan: Ibadan University Press

Aleesha, P. (Unknown), The Survival of Newspaper in the Digital Age of  Communication

Werbach, K. (2000). Syndication: The Emerging Model for Business in the

Internet Era

Author: Imoh Robert

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