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How Media Companies Can Survive In A Mobile-First Era

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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CNN, Time Inc and Google discuss how technology, media firms and telecoms will impact the future of content

The recent demise of FHM, one of the final bastions of the ‘lad mag’ culture that peaked during the 1990s and 2000s, serves as well as any example to demonstrate the challenges facing traditional media.

The Internet’s ability to deliver instant content to people around the world and the ‘normalisation’ of accessing information for free has made it difficult for traditional media brands to generate revenue.

Newspapers have experimented with a number of models – advertising, memberships and paywalls to name but a few – while it was hoped that the tablet would be the saviour of print. But income from traditional streams, such as cover prices and subscriptions, has still fallen and online revenues have struggled to keep up.

The Future of media

The Times iPadThe increasing popularity of adblockers suggests many web users are becoming less tolerant of invasive advertising, while new brands like BuzzFeed, Vice and TheLadBible have been able to grow using sponsored content and social media to develop and monetise audiences.

The arrival of smartphones and more advanced mobile networks capable of supporting video is likely to present a challenge to all types of ‘traditional’ media, including broadcasters, as people become used to accessing whatever they want wherever they are.

Technology companies are also keen to get in on the act. Facebook, Apple and Google all want you to spend as much time as possible within their applications, controlling what you see and showing advertising based around that content.

Telecoms firms are also struggling with growing demand for data and must invest in infrastructure despite not directly benefiting from the rise in popularity of online video. The recent battle over net neutrality and the expansion of many communications providers into television is evidence of that.

At the recent Mobile Broadband Forum (MBBF), three companies explained their strategy to cope with these trends and how they would impact the media market in the years to come.

CNN

For CNN, the growing power of mobile networks and demand from users has completely changed the way it delivers its news. As satirised in the film Anchorman 2, CNN was the world’s first 24 hour rolling news channel but has had to reinvent itself for the mobile first age.

Huawei MBBF Media (1)“For 35 years video has been the DNA of CNN. We have to continue reimagining ourselves especially with regards to mobile,” said Alex Wellen, head of product at CNN Digital. “It used to be about destinations: You come to us and we tell you what we want when we want in a linear fashion.”

“We know it’s not only about what CNN wants, it’s about control. Control is about giving people what they want when they want it.”

CNN launched CNN Go in October, offering users on-demand video alongside contextual information such as tweets and written content, with users able to pick which order they view stories. Wellen said CNN Go viewers watch the app twice as long as TV viewers and the latest version has made video even more prominent.

What’s more, CNN claims ‘digital advertising’ that is contextual allows the organisation to charge more and users find it much less invasive. But to continue with this model, CNN says it needs telecoms firms to continue to invest in network infrastructure.

Time inc

For Time Inc., publisher of Time magazine, Sports Illustrated, NME and others, the challenge is to monetise its content and make its predominantly print brands relevant.

It thinks there must be a “marriage of convenience” between telecoms and media companies to combat the threat of online aggregators and is adamant all media firms need to embrace video if they are to survive.

“These brands mean something to people,” said Erik Moreno, executive VP of business developments at Time Inc. “In a world where audiences are aggregating around their passions.”

He said the media industry had previously been a stagnant market where innovation was low as advertisers had little choice but to stick with established players, while publications collected income in advance in the form of subscriptions.

Now, he said, the industry was in a “complete state of havoc”, but mobile and the frequency at which people check their phones meant there was also opportunity, despite the difficulty of monetisation. It was essential, he argued, for media outlets to be able to fund premium content and send reporters to places like Syria, and trends such as adblocking jeopardised that.

“We cannot take that lying down,” he said. “Sending a reporter to Syria takes money and talent.”

However he reached out to telecoms operators, telling them any company not affiliated with Apple, Google or Facebook faced danger. He said telcos had a wealth of user data that could be useful.

Google

newspapers news media © kret87 ShutterstockOn the other side of the fence is Google, who wants to work with telecoms operators to ensure it can deliver content to users and says that without services like YouTube, communications providers would struggle to sell superfast broadband subscriptions.

“We think we need to work together,” Mike Blanche, the company’s manager for telecoms strategic partnerships. “We want to work together to delight our mutual users and your subscribers.”

“We have to work together. Google is not a lone force and neither are telecoms operators. If telecoms operators didn’t exist, users would be left looking at blank screens. It’s not a zero sum game.”

It is sharing application level data with telcos to help them optimise their networks and would like a reciprocal agreement to improve its own services – such as the YouTube Red subscription service.

“Some [operators] found problems they didn’t know existed because they were so high up, they didn’t register on their network tests. There’s much more we can do with mobile operators. The radio network has precious spectrum we don’t want to waste.

“Mutual dependence and mutual partnership is going to be the winning strategy and it’s an approach Google wants to take.”

Mobile rise

Just like telcos are endeavouring to develop new types of service that allow them to compete with over-the-top (OTT) providers and generate revenues that replace falling income from traditional streams like phone calls, media companies are also attempting to reinvent themselves.

Not even the BBC is immune as it seeks to justify the existence of the licence fee in an era where more and more people are finding news, information and entertainment online rather than through traditional broadcasts.

Video and a mobile-first approach are widely seen as key pillars of any survival strategy, but technical challenges – and competitors from within the technology industry – persist.

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