Thursday, March 25, 2010

Finding a viable media business model in the digital age

By Monique Senekal, Managing Editor

Media enterprises operating in today’s Information Society, whether in developed or developing nations, are facing great uncertainties and challenges as to the specific approach they should be taking in responding to the global digital migration. Today consumers have greater choice and more control over the media they consume.

Just last week the Sol Plaatje Institute for Media Leadership at Rhodes University hosted 12 print media mid-level journalists and managers from across Africa in its first Essentials of Newspaper Management (EONM) short course for the year 2010. I saw this as the perfect opportunity to question the experienced group of print managers not only about their perceptions regarding the all-pervasive debate that the traditional media and, indeed, print media, are forced to develop a new business model to meet the needs of the digital age, the age of discontinuity, but also of the respective business strategies they are employing in responding to the global digital migration.

Quite surprisingly, most of the participants were steadfast in their belief that digital media is not really a threat to their businesses. Many explained that their management teams have had the foresight in using the internet as an extension of their product and/or service.

Shirley Govender, editor and managing director of the community newspaper and online publication Southern Globe, which services the greater Indian population in Lenasia, explains:

“As a monthly publication, we saw it as an imperative to go online because 80% of our audience work in Johannesburg, meaning that they need to commute at least two hours on a daily basis. Online we are able to update content regularly in a cost-effective manner. We therefore saw going online as an opportunity to better our service to our readers, allowing them to go online and catch up with their community news, whenever they have a few moments at work to do so.”

Govender further explains that going online has allowed them to expand their audience reach, now targeting the techno-savvy youth market. Strategically, their website caters not only for the need of the youth to network and interact, but also for the older readers’ need to gather information. Southern Globe’s online strategy also includes inviting readers to submit articles they think may be of interest to their target audience.

The EONM group of print managers are also recognising the value in real-time marketing. That is, they are using the interactive nature of the web for real-time, value-added customer relationship building. For example, Dirk Lotriet, deputy editor at Sondag, asserts that their online strategy for improving their service delivery is to offer the feedback loop, creating producer-consumer dialogue and relationship-building. Sondag has also introduced an interactive SMS section which invites readers to express their opinions and views about Sondag and the articles published in the newspaper. Furthermore, Lotriet adds that their value-added service is to offer picture archives and competitions online.

There is also the possibility for traditional print media to find new ways of generating revenue online. However, Adrian Henwood, co-owner of the Eastern Times community newspaper, Pretoria, is not convinced of the viability in investing in an online revenue generation strategy at the moment.

“There is no money going digital; our income is generated from selling ad space, not sales. Going digital is more about branding, getting our name out there,” he said.

Although Henwood is right in saying that online provides the opportunity for branding, there may be ways to generate extra revenue online for community print media. Perhaps they should think of strategies that offer their online users customised services that are uniquely differentiated from their competitors. The online product could, for example, allow consumers to obtain instant information on advertisers’ products or services to aid them in their crucial purchase decision process. The online site could also offer a ‘bid-or-buy’ section where the community could offer their unwanted goods for auction; they could also offer a point-of-transaction service to its reader and advertiser base which may increase their unique selling proposition to their existing and potential advertiser base.

Then there is the rapid expansion of mobile phones in Africa, which promises to close the digital divide between the haves and have-nots and the urban and rural populations and has made it easier for people to participate in social media networking.

With 28% of the African population having mobile access to date, the mobile phone has shown an exponential growth rate from only 2% in 2000, according to International Telecommunications Union (ITU), an agency of the United Nations. Compared to only 3% with access to the net, the mobile is, indeed, the future of web access in Africa. However, not many of the EONM participants spoke about using the mobile phone as an integral part of their strategic business strategies.

Betsie van der Merwe, co-owner and editor of the Eastern Times community newspaper, acknowledges print media’s need to take note of the opportunities offered by the mobile phone, adding:

“We must engage in mobile; it’s not a real threat to us right now but we must be aware of it."

Although many academics and journalistic critics muse that traditional journalism has fundamentally failed to serve the needs of the public – by being too elitist, selfish, product-orientated rather that consumer-driven – Lotriet counter-attacks and points out:

“Journalism might be failing the academics, but it is definitely not failing the public; our increasing readership proves that we are serving the needs of our target market.”

What emerges from this statement is the reality that the tabloidisation of today’s journalism is another thread coinciding with the digitisation of the media, whether the conservationists of traditional media like it or not. Lotriet asserts that “the success of tabloids, community newspapers and African language publications proves that they are giving people what they want”.

The fact that Sondag is structurally a tabloid newspaper may point to a parallel phenomenon occurring in the new media landscape: that the tabloidisation of the media on the one hand and an increase in user-generated content made possible by an increase in broadband on the other are two phenomena so similar in structure that they can almost be viewed as one and the same. Both assert the need for more grassroots journalism, journalism that is produced bottom-up, rather than top-down.

The question that remains is thus: how can tabloidisation and the increase in user-generated content in the digital age translate into effective and ethical management, the cornerstones of managing any successful business?

The title of this post marks the theme of this year’s African Media Leadership Conference, hosted annually by the Sol Plaatje Institute for Media Leadership and Germany’s Konrad Adenauer Stiftung. The conference, taking place 26-29 September in Cairo, Egypt, will be a key learning and reflective platform where African media’s top dogs will discuss the structural and operational challenges, and the strategies they employ in an effort to remain credible, relevant and competitive in a fast-changing, digitised, market-driven media landscape.