Challenges for Media in a Digital World

At this year’s EmTech Spain, a fireside chat between the Editor-in-Chief of MIT’s Technology Review, Jason Pontin and Grupo Prisa’s Kamal Bherwani was held on the future of media. Many points were touched upon, but the overall theme was: How are media companies to survive in a digital world?“Media companies have cancer,” said Bherwani. “You don’t see it day to day, but it is happening. Now, media companies need to become the cancer to survive.”There are essentially two models of media on the Internet. One is free, ad-supported content and the other is a pay or subscription-based model. Neither one is a panacea and new methods must be found.

On-line ad spending grew 14% in 2010, according to data from the research firm eMarketer. However, the amount of clicks generated from these ads– and where the money is earned–have been fading.

“‘Eyeballs on clicks’ are falling greatly,” said Bherwani. “Traditional cost-per-thousand models simply can’t support a media company anymore. We have to find a way to create an integrated ecosystem between views and talking about what has been seen.”

The New York Times caused a stir when it introduced its paywall system back in early 2011. Many people felt that the Times would fail as others had before. However, the Times has achieved an average on-line, pay-based weekly readership of 380,000. In a clever maneuver, the wall also has holes so non-subscribers are allowed to read 20 articles a month and access through news services such as Google News are not subject to the limitation. However, only a percentage of the population is willing to pay for what was once free.

“They give you just enough free content to remind you how much you love it,” Pontin said during the chat. “Then they hit you up.”

Many publications are also debuting digital versions of their print products. The New Yorker, Popular Science, National Geographic and many other magazines and newspapers have teamed with Apple and Amazon to make their publications available as a digitally-delivered versions. Many versions are enhanced with multimedia content which can either distract from or enhance the reading experience depending on who you ask.

While these digital versions are considered to be the future, problems still persist– especially for the publishers. Bherwani believes Apple needs, and may be forced, to loosen its grip on customer data and share it with publishers. Otherwise, they might go elsewhere.

Publishers sell ads based on readership data. It would not make a lot of sense to market women’s lingerie in a fishing magazine, for example. Apple has refused to share much of its data on reader behavior with the publishers. In the end, this not only hurts the publishers but affects readers as publishers no longer have their fingers on readers’ pulses.

As the popularity of  tablets and other media devices grow, a way will have to be found for publishers, hardware producers and readers to strike a happy balance. As Bherwani said, “It’s really a Darwinian model of who can survive to the end.”