Stop, take a breath digital

IN Books | 07/10/2013

There is not a single digital company among India's largest media companies, as yet. Only six percent of advertising last year went to digital.

An extract from VANITA KOHLI-KHANDEKAR~s ~The Indian Media Business~, 4th edition.

The Indian Media Business
Fourth Edition
Vanita Kohli-Khandekar
Media specialist and writer
2013 / 484 pages / Paperback: Rs 650 (ISBN9788132113560)/ SAGE Response

Stop, take a breath digital. Think about where you are headed.

At a two-day workshop on digital marketing by afaqs! Campus in 2013, the anti-offline feeling was strong. The trainers, good minds from some of India’s best agencies, were utterly contemptuous about all other media, including TV and print. The young audience seemed to mirror their opinion. So do many people in the media and entertainment industry, media students and other people I meet in the course of my work. All the ‘old’ media are viewed as dinosaurs that will die. And in conversation they are already dead. Young people seem to think that digital is where the world exists and everything else doesn’t matter. Not only that, the bosses at some of India’s largest media buying agencies talk as if digital death is imminent. This is silly.

TV reaches over 740 million people, print reaches 354 million and digital reaches just over 200 million. Advertisers spent more than 90 per cent of their money on all forms of mass media last year. Only 6 per cent went to digital. This proportion has remained largely constant for the last many years. There is not a single digital company among India’s largest media companies, as yet.

This is not to negate the growth of digital or its power. It is the biggest phenomenon of our times. All the same, there is need for some perspective. Most people like to believe that digital is some kind of utopian ideal in media consumption and freedom.

It isn’t, for four reasons.

One, digital operates much like any other medium. Just like any other media, it needs large audiences and scale for a company to make money. As with other segments of the media business, as more people spend more time on it, the greater will be the ad rupees that digital will attract. Digital is different in texture of course. It allows you to interact, transact, share and do a host of things that other media don’t. But the basic, economic underpinning of this business is just like that for any other media.

Two, four large companies—Apple, Amazon, Facebook and Google—dominate the digital media, globally. This is unlike other segments where there is more competition and, therefore, variety available. Digital is, in many ways, actually less utopian and equal than we would like to think. These four dominate not just in sheer audience power, but also on revenues. Google has a vicelike hold on the search market and, therefore, on advertising. About 18 per cent of all advertising on the internet goes to Google. As its Android becomes the default operating system on mobile phones, it is now getting a lion’s share of search revenue on the mobile too. There is nothing wrong or right about this. Some company may come up with a better search engine and dominate the market. Another may find a way to get more users and make more money than Facebook can on social media. But to romanticise the medium might lead to disappointment. Worse still, it would mean that as consumers we give up too much privacy and power to digital platforms which may or may not handle it responsibly.

Three, unless digital can work at bringing adequate returns for professionally generated content, there will be a long-term problem. Think about it. Newspapers are losing audiences offline and gaining them online. Their cost of creating the content that gets this audience online, remains roughly the same. However they are not gaining the same revenue online. A newspaper in the US loses 16 ad dollars for every ad dollar it gains in digital. Yet, during an election or a crisis, readers flock to the sites of known brands such as CNN or BBC. That means they trust them and want to follow them wherever they are. If it is their content that is generating traffic and advertising for, say Google, what will do the trick once all newspapers have died? Or once all TV companies give up and say, all right, YouTube can do what it wants. Thankfully some alternative models based on pay, such as Netflix or Hulu commissioning original programming, are emerging. Eventually that is what will emerge. The digital majors will become what the old media majors were: supporters of original, professionally generated, content.

Four, a good combination of offline and online media could actually get fantastic results, as is evident in several markets around the world. See the work being done for Ikea or Coca-Cola both online and offline. Understanding offline could also help online get better advertising rates, something the mass media professionals have mastered. If only the online devotees would get over their need to snigger at mass media, they could swap so many nuggets of knowledge with the big boys.

Why are we looking at digital media separately? Television is, for all practical purposes, digital. In printing almost the entire backend, up to the time you read the newspaper, is digital. Music has completely moved into cyberspace. Radio is halfway there and in films, except for the production process, the distribution and exhibition is 80 per cent digital. If all media is digitising, why then do we have a chapter called Digital Media at all? It is a question that will haunt all of us as we seek conceptual clarity in a world where the shapes and forms of everything we know are changing, shifting, morphing so fast, that is impossible to give them a name. This chapter then is an attempt to create a structure around all the forms of media emerging as a result of the affairs and marriages between old and new formats, between technology and content, between the medium and the message.