Someone following media business in small European countries or newspaper companies easily assumes that the whole industry is in trouble. For instance, if one looks at the figure below presenting the development of the largest Finnish media companies, one can notice that all the other companies have declining revenues except the public broadcasting company YLE that collects its revenues from taxes.
But when one looks the figure below showing the revenue development of the ten largest media companies in the world, a totally different view emerges.
The largest media companies are growing, and in 2014 they produced a healthy 21% of operating profit. For some reason, the media business is transforming from local monopolies and oligopolies to a competition between global giants. It is also moving from print to the online and streamed content.
But, what makes these global or US giants successful, when at the same time smaller local companies are seeing trouble?
Content is the key
The most successful of the major players of the industry have one thing in common: they own or control the rights to use of the globally leading original content. They are not just middlemen.
The core of the success currently in the media business is the control of original content. Those parties that are just aggregating and delivering content, are declining.
The increasing importance of content owenership is driving globalization. When the the production costs can be divided to the largest possible number of buyers, the large players can produce high quality content.
But globalization is not the whole truth in media industry. There are also possibilities for producers of local content. E .g. the popularity of domestic movies in small European countries is increasing. The consumers are ready to forgive the weakness in quality due to low budget for being able to watch a movie that is unique and culturally close. And movies and books are such content that need to attract only a small part of the population to become already successful.
No-one owns news content
Newsprint is the part of media business in fastest decline. If you think the situation from the point of view of content ownership, this is self-evident.
The hard fact is that no-one owns news. They just happen. The core content of newsprint has been aggregating and delivering news. The value of news delivery is fast disappearing, as consumers can nowadays find the original sources telling about happenings, thanks to the Internet and smartphones.
The journalists have responded to the development through investigative journalism and data journalism. But it is still unproven, whether they will really be able to produce significant value. After all, most people want fast and simple answers, or really deep expertise. Journalism is about tinkering around issues by someone, who is not a real expert on them.
Thus news delivery will be increasingly based on fast simple newsflashes and consumers interested in getting deep understanding leaning to the real experts that have used years to collect data and developing analysis models. The ground in the middle is limited.
From edited truth to voted truth
Many people see a big risk in this development for the society.
If there is no-one editing, checking the facts and credibility of the sources, or collecting views from the opposite side of the discussion, how the poor consumers could know what the generally accepted truth is. They would be lured by new age scientism of sheer cheaters. Also, if there is no-one who makes important things public, how the general public will become beware of what significant changes are happening. The edited truth is replaced by the voted truth of social media.
In the new “thumb up for liking” reality, there will not be as much guidance as earlier for people to realize what the facts are and what are opinions or even lies.
The development towards voted truth is well in its way. The global platforms making the voted truth possible are succeeding well, as the figure below shows.
Are we facing a major threat to the society?
From passive to active media consumption
My opinion is no. When Internet based data searching mechanism and social media are replacing the traditional editing, the end results are improving from the point of view of ordinary people. They have more understanding, what is really happening around them.
Everyone, who has been involved with learning, knows that it produces longer lasting results, if an individual searches self information and forms own opinion, instead of relaying on some authority’s views without thinking with his/her own brains.
Thus Google is usually better learning tool than someone else aggregating the same data and feeding it to a passive reader or listener. When googling, a person is actively using his brains to build a cognition.
Google provides a limited worldview if it is the only tool to build understanding and following the developments in the world. It does not give feedback and second opinions to your thinking easily. It does not tell what is important. Therefore we need also social media.
Any news item worth noticing gets visibility very fast on Facebook or Twitter. It is easy to express opinions there. This means there misunderstandings and mistakes tend to get corrected, if the user is willing to listen the feedback.
Of course, if a person selects his social networks narrow-mindedly, he will learn only such views that meet his e.g. political opinion. But also in the old world of edited reality, there were different newspapers for people having different political opinions so there is no real change to worse in this.
The traditional world in which media served consumers with content and news packages is fast being replaced by a world in which consumers use self service to get their understanding of the world and entertainment.