communications

Can traditional media make the jump online and still make money?

In looking at the various reports that came out in different parts of the world, I was wondering where we can expect to be in terms of the media scene - consumption of news and where we get it - in five years. More importantly would we have a common model globally or would different countries have totally different approaches?

The general consensus it seems is that newspapers seems to be struggling to find their footing in the digital world if a recent report from Nielsen is anything to go by.

In Malaysia, while mainstream media outlets continue to dominate the news provision scene, online media is making a quick hop up the ladder. According to a report quoted by Marketing-Interactive, the the Nielsen Media Index shows double digit growth in Internet penetration rates for the country versus the penetration rate from five years ago.

The tracking figures, showing the national reach touching two out of every ten people today - is also reinforcing the expectation that online media and the Internet in general will continue to reinforce its position as a key part of the mass media reach in the country. This reflects trends in other parts of the world as well including the United States.

Citing news websites as an example, Nielsen Media Research Malaysia found that Malaysians were opting for online news where they wanted faster and more constant updates. This has translated into a 35 percent growth in online newspaper readership over the past twelve months - and a readership of over one million readers!

(Given that Malaysia has a population of approximately 26 million that’s a substantial amount in such a short time.)

In the United States, the numbers are even more revealing as shown on Thursday last when the Newspaper Association of America issued a press release surrounding a custom analysis developed in conjunction with Nielsen Online for the Newspaper Association of America.

Titled, Newspaper Web Site Audience Increases Sixteen Percent In Third Quarter to 68.3 Million Visitors, Mitch Joel over at Six Pixels of Separation dug a little deeper and found that the title wasn’t quite as startling as its content.

According to the report, newspaper websites in the United States each month attracted, on average, more than 68.3 million unique visitors (41.4% of all internet users), during the third quarter of 2008 - a record number, and a 15.8% increase over the year-earlier quarter. Moreover, newspaper website visitors generated an average of 3.5 billion page views per month throughout the quarter - an increase of 25.2% over the 2.8 billion page views a year earlier - and the highest level for any quarter since NAA began tracking the data in 2004.

Given the lackluster performance and continuing challenges in the newspaper industry in the US however, it seems that reaching consumers and translating that into revenue are two separate things entirely - and the traditional media just haven’t figured it out yet.

As the NAA’s senior vice president of Audience and New Business Development Randy Bennett notes,“Newspapers are (already) continuing to enhance their Web sites with dynamic features, video and other interactive tools that deliver high levels of user engagement.The dramatic increase in page views suggests users are visiting newspaper Web sites frequently throughout the day.”

Looking at the size of audience US based newspapers have online, thinking about their revenue streams and listening to the woes of this industry over the past few year over there, it’s hard to understand how things are going to significantly change with new media if they’re already having difficulty figuring out how to make money from almost half of all Internet users.

Back home in Malaysia …

However, in Malaysia things aren’t quite as advanced yet.

News hounds here still go to print as a primary news source at some point or another with Nielsen finding that nine out of 10 readers still consume hard-copy news. The index also indicated a 21% increase in Internet users nationwide with almost four out of 10 users spending one to two hours on the worldwide web daily.

So what are they doing? Well, more popular activities include TV/music/games (47%), followed by message/chat/blogging (45%) and reading newspapers or magazines (35%).

TV viewing was also a strong player in media consumption as the study found 94 percent of respondents were loyal consumers of it.

The index, which sampled 10,000 individuals in Peninsular Malaysia aged 15 and above, attributed 73 percent of this tremendous outreach to Media Prima Bhd’s TV3 free-to-air channel. Government linked Radio Televisyen Malaysia took the rest.

In the pay-TV segment Astro’s Family Package is most popular with seven out of 10 subscribers tuning in to channels in the package. Consumers also subscribed to almost double the number of satellite channels as they did five years ago.

Interestingly, the survey found that the main growth in the traditional newspaper business wasn’t in the English language segments - it was in the Bahasa Malaysia (Malay language) segment.

Growth was found across the board however with most major dailies continuing to make inroads with young consumers.

The latest Nielsen Radio Audience Measurement also found that radio was still the most popular form of message disseminator with its listener-ship reaching out to 92% of the population.

So what does this mean for the growth of online media in Malaysia and around the world? Will we see different countries taking markedly different paths towards a common platform where new media and on demand news rules the roost - or can we expect to see different countries having totally divergent news and media outlooks in the next 3 to 5 years?

© 2008 Journeys Through The Line.