Media houses have invested massive amounts to convert analogue newsrooms into digital first newsrooms. But has this converted into revenue?
With the uptake of smartphones, the South African population is growing increasingly digital. Mobile digital is connecting more people to the net from 10 million in 2010 to 51 million in 2016 according to research by PwC entertainment and media outlook: 2015-2019 South Africa – Nigeria – Kenya. This trend is only looking to increase.
The limitations of broadband in terms of speed and costs are coming down rapidly, giving more people access.
Consumers are getting their news and entertainment via social media, rather than web pages. The drive to video is making audiences more content driven. Media houses have invested massive amounts to convert analogue newsrooms into digital first operations.
And while they have garnered new audiences, they are struggling to convert audience into revenue. They also have to compete with start-ups and individuals that can set up their own media platforms. While one start-up is not a challenge, a thousand are a threat. Added to this are the thousands of unseen app developers that could be bringing out a competitor that could blindside developers.
The biggest threat for digital companies are players in the financial services, health, retail and telecoms space. They have large data sets of consumers who already use their services. They can leverage their relationship with more digital product. They can do this without over extending themselves internally.
In short the landscape is volatile for all working in digital, from app developers to content developers. While content attracts audiences, it is knowledge of the audience where the real money lies. It is not enough to just push out content, you have to know the audience you are pushing content to. What their likes, dislikes and connections are.
The fact that social media networks are collecting piles of data on us is no secret. The push back against the social media networks has begun. Those looking to mine the personal information of digital users are in for a rude surprise. Consumers and authorities are beginning to push back.
Whether it is the Protection of Personal Information (POPI) in South Africa, the European Union of Privacy Authorities in Brazil or South Korea. The legislative and consumer pushback is in full swing. Once fully implemented the POPI legislation can carry a fine of R10 million per offence.
There are multiple challenges for players in the digital space. Firstly they have to create content that attracts the audience. Then they have to profile the audience consuming the content. It has to do this with the permission of the user, while keeping in line with the regulatory and legislative guidelines of the territory they are operating in. It’s a tough ask.
Lance Claasen is managing director of Un-told Media. He recently completed an MBA dissertation on analogue to digital migration in the media space.