Digital disruption leaves media companies facing uncertain future
Business Management

Digital disruption leaves media companies facing uncertain future

“On the one hand this is the best time for [content creation] but the bar for being distinctive is hard,” says Adam Bird, Senior Partner at McKinsey & Company at the FT Digital Media Summit in London.

And this is what investors, analysts and digital entrepreneurs have come to find out at the summit. In a period of massive digital media disruption, how can media companies remain distinctive? Mashable just did a series of job cuts in order to focus on its “core coverage” of technology and entertainment and has made a deal with Time Warner to focus more on video production.

Then there was so much “buzz” around BuzFeed but it fell short in expectations about its performance. According to the FT, it had projected around $250m in revenues last year but it generated less than $170m.

With so many changes happening amongst media companies every day, it was only apt for the speakers to talk about the Financial Times’ own major change: its sale to the Japanese media group Nikkei for $1.3 billion last year.

“In order for Nikkei to continue for ten to 20 years we needed the FT,” says Tsuneo Kita, Chairman and CEO at Nikkei.

“But isn’t there a different reporting culture in Japan? Are reporters as tough in questioning the operations by businesses in Japan as they are here in the West?” moderator James Harding, Director of News and Current Affairs at the BBC puts to Kita.

“We have a very sincere attitude in getting to the bottom of the story. I was once a journalist too and this is a good opportunity to correct this [misperception],” Kita replies defensively.

When asked about the FT’s paid subscription model when there is so much free content out there, there was a lot of emphasis on FT’s “quality journalism”.

“Because there is so much out there, there are filters to explain the difference,” says John Ridding, CEO at Financial Times.

The fall of print journalism was also discussed with Ridding stating that “old structures of advertising are fragile” and that “we are definitely seeing double digit declines in print.” Yet interestingly, Ridding still sees print “having a role” to play for the FT in ten years’ time.

The discussion then turned to how businesses can keep pace with monetising changing consumer habits. Facebook has now opened up its Instant Articles platform which allows publishers to directly host their content on Facebook.

What impact could this have on publishers?

Jimmy Maymann, Executive Vice President and President of AOL Consumer Brands, says that the worst case scenario would be publishing content on Facebook and “not being in control of it.”

“How will the reader differentiate if the branding takes a backseat?” Maymann adds.

For Doug Leeds, CEO at IAC Publishing, the key thing is to “differentiate your branding” so readers can tell the difference between the different types of content available on the platform.

David Lynn, President of UK, Australia & Eastern Europe and International Content Distribution at Viacom, says that “social is a huge area of growth and that’s where we need to be”.

And of course there was no getting away from Virtual Reality (VR). Much of the opinion is split on whether it is all just a bunch of hype or whether businesses outside of the gaming industry should actually take it seriously. Mark Zuckerberg at Facebook demonstrated its value with its whopping $2bn acquisition of Oculus Rift in 2014.

Should everyone else take note?

According to Bird, story-telling has not changed much over the years and VR will be a “novel way to change story-telling”.

“It’s already had an impact on gaming and entertainment – it’s a very exciting piece of tech,” Bird says.

Many people still experience nausea with VR so what about that?

Solomon Rogers, CEO and Founder at REWIND thinks a lot of this is simply down to “bad content” from the developers.

Justin Hendrix, Executive Director at NYC MediaLab, thinks that the hardware will improve over time as will story-telling. For him, the social VR experience was a “turning point” and he sees masses of potential for VR around social experiences.

Hendrix also points out how there have always been sceptics on every major technology we’ve had in our history. Referring to an NY Times article about when the TV was first introduced, he quotes:

“People have to sit and stare at the screen and people have no time for it.”

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Ayesha Salim

Ayesha Salim is Staff Writer at IDG Connect

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