The business model used by traditional media practitioners on digital platforms is fatally flawed.
In the debate about future of traditional media in digital spaces an important element is missing. It is called honesty. Legacy media houses have been fooling themselves into thinking they know what they are doing as they travel on an unchartered digital sea. Gung ho and over confident, we have sailed in circles hoping to stumble across the promised land, all the while getting more and more lost.
The playbook for traditional media going digital is normally done in a cloud of urgency without a map, course or compass. There is an overwhelming drive to put as much content on the web in what is known as a ‘digital first’ policy. This is often at the expense of the analog business. Staff, who haven’t adapted to the new digital first strategy, get pushed out. New multi-tasking staff are brought in and digital output is increased dramatically.
If you are a newspaper, you now shoot video and if you are a radio station, you write blogs. The lines are blurred and you are told you are now a ‘content business’. All these businesses have increased workloads with decreased staff numbers, producing below average work. In the race for quantity, it is quality that becomes the loser.
Buzz words like ‘synergy’ and ‘leveraging content’ float around the work place, with no clear idea how digital and analog work in real life. The only synergy that seems to be taking place is brooding unhappiness between the worker bees and the drones that are at odds with one another. More people leave, strange appointments are made, but above all, the revenue being generated by the new digital first strategy is modest at best.
The advertising issue
The analog business model of subscriptions and advertising between the content (clickthrough ads) has been transferred to the digital model and is just not working. The advertising income on digital platforms, never reaches the same levels as the traditional analog channels. The digital subscription fails to gain traction, due to free nature of the net. What the media house thought was exclusive will be found on a competitor site for free in five minutes.
It means users simply will not pay. There are a few exceptions where paid for content works. They are normally international papers of record such as the Financial Times and The Economist with access to decision makers that affect economic policy. If you are regional publication or broadcaster, in a country with limited digital access, the pay-for-view model will struggle to bear fruit.
Yet the great irony is that there is a form of media that is making money and lots of it. Social media in the form of Facebook and Google have managed to do it by not creating any content at all. In fact they use the content created by traditional media to engage audiences, which it profiles through a set of algorithms. Thus they know the likes, dislikes and users.
The user’s profile has become the product. The user profile that traditional media helped create becomes the target of highly focused advertising. Ever searched for ‘weekend getaways’ and ads for such getaways start appearing on your Facebook timeline. This is the new form advertising that traditional media has to compete with. Facebook is not your friend.
So what can small regional traditional media outlets do in the face of digital onslaught by the giants like Facebook? The alternative of doing nothing on digital platforms just pushes the industry into into obscurity.
An in-depth understanding of the audience
First of all traditional media has to admit it does not know where it is going. It has to acknowledge the frantic urge to get audiences on digital platforms will not result in analog revenue. It has to come to terms that cost-cutting exercises can only go that far and compromises the product and staff morale.
Then it has to look at what social media does better than the traditional outlets, and that’s not produce more content, but have an in-depth understanding of it audience as individuals not demographic. Ask any newspaper editor of programme manager at a radio station, “Who is consuming your product right now?” and they won’t know.
They will quote research that is months out of date with limited qualitative data at best. Ask social media managers the same question and they will be able to give a whole raft data on the person and the connections between the person and the data. These profiles evolve with every new data entry.
All traditional media has in response in this highly sophisticated targeted advertising is the banner ad.
If traditional media really wants to succeed on digital platforms, it has to get to know its audience intimately. It has to be more strategic about its relationship with social media and has to re-think the way it produces content on digital platforms. Continuing on the same path is just not feasible.
Lance Claasen is the MD of communications firm Un-told Media and has recently graduated from Henley Business School with an MBA. His dissertation was on ‘How to turn analog radio listeners into digital users’
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