The Internet has given traditional media an ultimatum: Adopt the ways of new media companies, or die a painful death.
Publishers of newspapers, magazines, and cable television (i.e. traditional media) are already struggling to survive in the world of new media. Market share of traditional media companies is consistently lost to new media counterparts. It’s only a matter of time before traditional media is gone for good, leaving the best adapted companies standing.
Shifts in Consumer Expectations
On the Internet consumers expect quality information, news, and entertainment to be free, convenient, and instantly accessible. It is easy for the internet based new media companies to satisfy these expectations, while traditional media companies find it much harder.
The Internet as a platform for the distribution of media incurs a fraction of the expenses associated with traditional media. Printing, shipping, and many other expenses are largely eliminated, while most major expenses of new media are scalable. This allows new media companies to provide services and content for free by relying solely on revenue from advertisers to maintain profitability.
These consumer expectations will only be enforced as the number of households with broadband internet increases. A study by Pew Internet in April 2009 says that 63% of households have high-speed internet, up 15% from 2008.
How They’ll Survive
Cable television has already begun streaming free episodes online. Websites such as Hulu.com have done a good job monetizing and consolidating shows from multiple networks into one platform. The only mistake cable networks have made is limiting the number of weeks they allow episodes to be streamed online. Scrubs, which is a show in its 8th season on ABC has only the 6 most recent episodes available online. This encourages consumers to watch episodes on illegal website that cannot be monetized by the cable networks. By offering all episodes online with no limits, networks would have a better chance of building their audience base while monetizing a greater number of video impressions.
The majority of Newspaper publications have some type of version available online. Even so, their internal infrastructure is still optimized for offline publications, which is okay as long as they are profitable in the short term. But as print media continues to slow, companies must scale back their offline publication efforts and begin to focus on their online presence. Companies who understand the evolving market and concentrate equally on online and offline publications are the companies that have the highest chance at sustainability.
One fatal mistake, similar to what has happened with online video from cable networks, is that some newspapers with simultaneous online publications are limiting access by a mandatory membership. The Internet offers countless sources of free news that are just as good as the bigger names in the industry. In order for newspapers to succeed they must exploit their name, reputation, and offline audience in order to generate momentum for their online publication, which will be their main source of long-term revenue in the future. Newspapers that restrict their content to members only, such as The Wall Street Journal, give potential online-only readers a reason to go elsewhere for their news.
Magazines, for the most part, are in the same situation as newspapers. Magazines are published weekly or biweekly, and simply do not satisfy consumers’ expectation for instant access of recently written content. Blogs and microblogs (such as Twitter) has created a viable alternative to print magazines that offer an instantly accessible source of constantly updated information and news for free. Magazines, similarly to newspapers, should follow the model set by today’s successful online-only blogs, and hope for the best.
Adapt or Die
The way in which people access media is rapidly changing, and traditional media companies can either take the risk and adapt, or keep fighting a losing battle. At this point, traditional media companies still have time to proactively adapt to the evolving marketplace. The actions taken by traditional media companies in the next couple years will determine their fate. It is survival of the fittest at its best.
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No doubt.
As for radio, I don’t know if there is a way for that industry to adapt. We already have XM/Sirius streaming online, along with Pandora. It’s very grim for radio.