Tip for media firms: Go digital big-time or go bust

Tip for media firms: Go digital big-time or go bust

Sunday, Mar 02, 2014

Janice Heng

The Straits Times

SINGAPORE – For media firms to survive, they must go digital in a big way – from becoming “big data” experts to even becoming online retailers.

That was the advice new media specialist Fernando Samaniego gave on Thursday in a lecture organised by the Singapore Press Holdings (SPH) Foundation.

“The digital tsunami doesn’t respect anybody,” he told an audience of more than 350 government officials, industry watchers, media professionals, academics and students in the SPH News Centre auditorium.

But that does not mean that the industry is doomed.

“Even if one day, newspapers disappear, that doesn’t mean anything. Our companies can still flourish and go forward as long as they undergo a big transformation,” said the chief executive officer of International New Media Consulting, a firm he founded in 2008.

To underscore the need for change, he cited a study by the World Association of Newspapers and News Publishers. It showed that for every 1 per cent fall in print circulation, advertising revenue falls 3 per cent. Assuming circulation falls by 2 per cent each year, revenues will halve within a decade.

Simply putting print content online will not make up for this, he said. Today’s revenue from print, online and paywall fees will still fall short of past print revenues.

How, then, should firms change?

Mr Samaniego gave ideas from his experience in advising success stories.

One is to build skills in handling “big data” – massive databases culled partly from consumer behaviour, which can be used in targeted advertising.

A related strategy is “real-time bidding”, which automatically uses data to get the right ad to the right consumer. Created by middlemen firms which offer the service, this practice is something media firms should learn how to do themselves, to “regain that margin that we are losing”.

Another way to cut out middlemen is to get into retail. Media firms have already been getting closer to the point of transaction, with online ads that pay each time they are clicked on or when a coupon is bought. Some have taken the final step, selling directly to users. “Local media has become a local merchant,” said Mr Samaniego.

Marketing and sales are not all that media firms should focus on. Content remains important.

To stand out, successful firms identify and focus on a few key topics “in which they can be the best”.

“That key content is what makes the newspapers unique. It’s what gives them their identity,” said Mr Samaniego. For other topics, papers can simply use sources such as wire agencies and freelancers.

What about going beyond the media businesses?

That was the question raised by Mr Patrick Daniel, Editor-in-Chief of SPH’s English and Malay Newspapers Division, at the end of this fourth lecture in the SPH Foundation’s Media in Transition lecture series.

“Expanding non-media activities is a healthy strategy from the viewpoint of the shareholder,” replied Mr Samaniego.

SPH corporate development executive vice-president Deborah Lee wanted to know which media firms in Asia would still be standing in 2020.

“If I had the answer, I would be investing my money,” quipped Mr Samaniego. But he stressed that survival is “not a lottery”. “If we decide we want to be standing in 2020, then we will be standing in 2020. It depends strictly on us. And for that we have to understand that no matter what, anywhere in the world, digital is the future.”