Disruptive influence: Can the media industry adapt to a model of news at all times, all the time?
Robin Hu says the internet has changed the media industry, and only those who adapt fast will succeed
"Newspaper", as we all know, is made up of two words - "news" and "paper". Over the last 20 years, since the advent of the internet, "paper" has been getting smaller but "news" has never been bigger. The reality today is that we've never spent so much time consuming news.
News has taken on new forms and conduits. Apart from print, TV and radio, we now have the web, tablets, smartphones and even wearables.
From a 24-hour news cycle for the printed newspaper, news dissemination has evolved to become a matter of seconds on your wristwatch. Yet, newsrooms, long conditioned to operate on a 24-hour cycle, are hardly equipped to meet changes at such breakneck speed. Productivity improvement does have a limit. We have a problem.
News has also taken on new shapes of engagement. A quarter of the Post's online traffic today is driven by social media and content aggregators from the likes of Facebook, Twitter, Reddit and BuzzFeed. In other words, we are getting readers we've never reached out to before, who otherwise will not proactively come to us, much less buy a copy of the newspaper. So, not everything is gloomy and we have an opportunity.
With so much time spent on news and so many online readers, why isn't the media economy more lucrative? The traditional media economy has been disrupted by the internet technology. "Eyeballs" - as online readers are known today - are migrating; young people get their news from social media and content aggregators. Where there is a meeting of eyeballs, a marketplace emerges, and the new marketplace is the "social mediaplace".
There is just one problem, though - print is a dollar economy whereas the internet is a penny economy. We have to earn lots more pennies to make up for a dollar. So, why do the printed newspapers command higher advertising rates even today? Well, the printed newspaper has been around for 400 years, since the Relation, written in German, was founded in Strasbourg in 1609.
To give you a perspective, in the year 1609, Wanli was the Ming dynasty emperor, Jahangir was head of the Indian Mughal empire and James I was king of England. So, for centuries, the printed press shaped the habits of people all over the world on how news is read and, with it, a highly effective advertising medium was formed. With its efficacy proven, the printed paper commands a premium. Those were the good old days.
Today, people rarely get to unplug. We are constantly searching for information and entertainment. As a result, the modern-day media economy has fragmented, with more and more players getting involved in more and more varied markets. Increasingly, too, value is shifting from the fragments themselves to the networking of fragments we have come to know as e-commerce and social media. Together, they form a big part of the new digital media marketplace.
Something else has changed. The traditional newspaper's economy is an economy made possible with subsidies. How so? A person pays HK$10 for a copy of the newspaper; each reader reads five out of 100 articles published and yet each reads a different combination of five stories. So, effectively, each person subsidises everyone else who also bought the paper at HK$10 but did not read 95 per cent of the paper. With the internet, however, this subsidy model has broken down, since distribution via the internet is much cheaper. What is more, the cost of capital expenditure has shifted from publishers to consumers. Consumers are now willing to pay for the latest versions of smartphones, computers and tablets, but they are no longer willing to pay for the printing presses publishers must invest in, which underpin the old subsidised publishing economy.
One thing has not changed though - the cost of producing good journalism remains expensive and is getting more expensive. Any solution to this economic complexity remains a work in progress.
So, is there hope for the industry? The hope is that at a point in the future, the digital media economy - where the internet economy overlaps with that of the media economy - will exceed the traditional media economy; in other words, a penny becomes a dime, a dime becomes a quarter, and a quarter becomes a dollar. Many publishers will fail, but those who survive this massive disruption will end up defining the voice of the new media.
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The internet onslaught has fundamentally changed the face of journalism. For starters, power has shifted from the editor, who decides for you what you need to know, to the reader, who decides what he wants to read and, importantly, what his friends ought to know with the help of social media. The power of control has moved from media owner to media consumer.
We live in a "multiscreen world", with each screen, big and small, competing for our time and attention. And the most popular screen is our mobile phone, which happens to be small. In the internet world, big is small.
Succinct bite-size news peppered with captivating images and video is what the digital-native generation demands. There is neither time nor patience for verbosity. In the land of the digital natives, less is more, but people want it at all times, all the time.
So, what does "at all times, all the time" look like?
First of all, print will become an old-fashioned good read over coffee during breakfast; increasingly a luxury experience for those who can afford it. The web is the place to be busy searching and navigating, an infinite place where our insatiable desire for more knows no satisfaction. Tablet is the niche lean-back device for reading through pre-selected apps or for catching up with the latest in movies and sports. Smartphone is the ultimate quick fix, filling in our fragments of idle time throughout the day. As for wearable appliances such as the Apple Watch, it is still too early to tell.
There is no escaping the news. News consumption is no longer just for personal gratification. Equally important is sharing what you know with people you care about. The psychology of sharing is worth noting; we trust our friends, so we are more likely to read what they find interesting. We also like to share because it gives us a sense of having influence over others.
For 400 years, one unit of time in the newspaper universe has been one day, whereas in the internet universe, a unit of time is becoming one second. Take a look at the figures to get an idea: 100,000 tweets are sent, 2 million Google searches made, 48 hours of YouTube videos uploaded and 47,000 apps downloaded - all in one second.
To reach out to a larger audience, news today must be search-friendly and social-media-enabled. Being a good writer is no longer good enough. Journalists must learn new skills fast to be employable. It's a case of move fast or move out. This is true for both journalists and publishers.
Robin Hu is chief executive of the SCMP Group. This is an edited version of a recent speech he gave to the Rotary Club of Hong Kong