HELPLESSNESS IN THE REVENUE CRISIS: MEDIA HOUSES IN SEARCH OF THEIR FUTURE
By Wilfried Platten, editor at the PR and communications agency PR-COM
The change in reading behaviour can hardly be experienced more strikingly than in a morning underground train. Instead of a newspaper held aloft, the mobile phone dominates the scene today. There is much more behind this than just a change in format from paper to display. Publishers are struggling with a flood of alternative information offerings from YouTube to social media – most of which are free and often of dubious quality from a journalistic point of view. For media companies, this is a horror scenario that presents them with existential problems: Circulation and advertising revenues are falling, staffing levels are thinning out and quality is suffering as a result. Budgets are getting tighter and editorial teams are going into the next round of cost-cutting until the bitter end. So where is the brilliant idea?
The latest PR-COM study ‘Media Financing of the Future’ analysed how publishers are reacting to this and what strategies they are developing in order to survive – and uncovered a number of striking disruptions and contradictions. Perhaps the most important point: only 46 per cent are even looking for new financing models, although 63 per cent report falling sales. So is everything still fine for the majority despite the erosion in turnover? Or does this reflect an explosive mix of naivety, helplessness and premature capitulation? These are questions that will be investigated in a further study. The second surprising point: Paid content is rated as one of the most effective measures for media financing. At the same time, however, only 13 per cent rate readers’ willingness to pay as high. This seems to make about as much sense as wanting to saddle up a brewery horse to win the next Aachen show jumping competition. The next surprise: the monetisation of user data is seen as a forward-looking strategy for generating revenue. At the same time, the monetisation effects that can be achieved from this are only rated as positive by a quarter. So it too can be no more than a nice extra income, but not a sustainable solution.
These few examples alone manifest an explosive mixture of existential threat and strategic helplessness. Without facing the truth, however, media companies cannot develop viable scenarios for a profitable future. The results of the study also show the growing gap between large media companies and smaller publishing houses. For example, e-learning offerings, tracking technologies and data generation methods are used far more intensively by large publishing houses. This means that those who have neither the analytical and planning staff nor the resources to implement new business models are particularly at risk. If the small players disappear, this may be an expression of the usual consolidation tendencies, but for the wealth of ideas and pluralism in the media landscape it means an irreparable loss.