Is media killing itself ?

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Over the last couple of decades, we have seen a vast change in the media scene in Nepal. Just over 20 years ago media meant a couple of national dailies one each in English and Neplali, one national radio, one national television channel, a few magazines and a few independent niche weeklies and tabloids. This situation has undergone a sea change since then and has become extremely crowded and competitive. Infact, some believe that there are more players than the market demands. This has led to challenges of sustainability for media organizations. Competition has become cut throat. Media companies have to increasingly rely on non-traditional revenue sources for their income. The important question that becomes a concern for everyone in such a situation: is media in its quest for short-term sustainability damaging its long-term impacts? Are they killing themselves?

The revenue of media organizations comes primarily through advertising income. Growth in advertising means growth in media. However, the last few years have seen a stifled advertising growth for various reasons. The growth of media space has been far higher than the growth of advertising spend. In other words, the pie has by and large remained the same whereas companies staking a claim to that pie have increased. The fight for survival has become critical. This has forced media to adopt means of competition that could damage not only the media industry but also the advertising industry in the long run. Let’s try and look at some of these impacts closely.

Low business accountability

The audience is getting hugely fragmented due to over supply of media options. This in itself is not a bad thing but with the lack of media audit research, brands are finding it very difficult to know who specifically are they reaching out to and in what numbers. Making mistakes is selecting the right media is getting more and more expensive with the increasing advertising costs. If brands don’t get returns from advertising in media, they will simply move away. The accountability that business companies expect from media is just not there.

Rationality of Spending

Another response we hear from clients are that they are wary of the response their advertising generates from within the media fraternity. Companies at times get more calls from other media organizations than from customers with the aim of getting a share in the media budgets. In a small market like Nepal, it is not always easy for companies to turn down media. Rationality of advertising spend gets thrown out of the window and it becomes more of a philanthropy decision rather than a business decision. Businesses will find it easier to avoid such situations totally by shifting their spends to areas where they get more return.

Keeping Media Independent

Lack of sustainable revenue from advertising means that media needs to look at non-traditional sources of money to keep their organizations afloat. Every power center needs a media voice and the financial vulnerability of media organizations in such situations makes them easy investment targets, which could compromise the independence of media. Media has a huge social role to play in the growth and development of a nation and keeping them independent and empowered is extremely important and critical.

Low Cost does not mean More Business

Brands are willing to spend on advertising but they need to be sure of the returns they will get. They will use media vehicles that would maximize their reach and impact to the target consumers. If they get a good deal on those options so be it. However, to expect brands to choose media vehicles only because they are offering higher discounts is not conducive for the long run. This kind of thinking has only led to a more fragmented financial structure of the industry and lack of trust between stakeholders. Clients loose trust on advertising agencies and agencies loose trust on media organizations. Erosion of this trust could have damaging results for the industry and could take a long time to heal.

With the growth of social media and connectivity between people, traditional media would have to work hard to establish its relevance to the people. News has become very fluid and accessible and consumers don’t need to rely on media structures as they did until now. Brands too would follow the consumers and would find newer ways to reach out and talk to their target audience. In such a situation, it becomes more important for media to wake up and find ways to be relevant to all their stakeholders and the sooner the better.