Our Thinking

Whose Afraid Of New Media
Published In Dawn, Aurora, March 2007

by Umair Mohsin

Technology is shifting power away from the editors, the publishers, the establishment, the media elite. Now it’s the people who are taking control

– Rupert Murdoch, Quoted in Wired, Jul 2006.

In a market with a yearly ad spend of Rs. 6 billion on TV and hotly contested by 50+ local players with another 20-25 new channels coming up, the power of the networks as distribution platforms and brands is diminishing fast. On the “business” side, the old networks have no end of new competition. The market is getting quite competitive, and as happens in a classical product life cycle, the players are feeling the pinch in terms of pricing, as well as differentiation in their offerings to the market. On the “consumer” side, the people formerly known as viewers have taken control of what, when, and how they watch and increasingly they’re doing it without commercial interruptions.

The old days of corporate media based on a centrally planned dictatorship are coming to pass. The old method of we will decide what you want & need, the limited channels of information with a central editorial control, government regulation and one-way communication is being fast replaced by advances in technology and communication, so much so that now we’re surrounded by information we see and hear. Overload is a huge issue. The old-school closed networks survived because of aggregation. The channel recommended the show by putting it on the air – it aggregated the content; it aggregated the audience; it sold the ads; it shared the revenue. Life was so simple. Well, so much for that. The power has shifted.

The viewer is getting smarter, more knowledgeable and has access to more media options than he/she can consume. Time-Shifting (the recording of programming to a storage medium to be viewed or listened to at a time more convenient to the consumer) whose earliest example was the recording of TV programming to a VCR and more recent is Video on Demand offered by cable operators, Space Shifting (The act of copying digital content for use on a device other than the one for which it is was originally intended, such as copying a music from a compact disc to an MP3 file for use on a portable MP3 player, or copying an MP3 file onto a compact disc for use in a digital audio player) & Place Shifting (watching or listening to live, recorded or stored media on a remote device via the internet or over a data network) of which one example is Mobile TV, combined with Time compression (the trend that people are busier and have less time. Plus they feel they have less time in their lives for all the things they want to do) are rapidly changing the way traditional media is consumed. The consumer is no longer dependent on the channel’s FPC chart and the trends point to the fact that as with the Internet, which you can consume anytime, anywhere, the same attributes will have to apply to rest of media, if they are to stay relevant to their consumer’s lives. Infact the only thing stopping these technologies from taking over right now are habits. The older the medium the longer will it take to change.

Customers getting used to customizing things to their preferences is the least of the worries of big media and isn’t the only aspect which keeps (or should keep) network executives up at night. Things are getting infinitely more complex. The Long Tail is taking over in our markets.

The concept of the long tail is simply that technology empowers the growth of markets serving smaller niches, minority tastes and because of it individuals are offered greater choice. Generally, as the number of TV stations grows or TV programming is distributed through other digital channels, the key demographic individuals are split into smaller and smaller groups. As the targeted groups get into smaller niches and the quantity of channels becomes less of an opportunity cost, previously ignored groups become profitable demographics in the long tail. These groups along the long tail then become targeted for television programming that might have niche appeal. As the opportunity cost goes down with more channels and smaller niches, the choice of TV programs grows and greater cultural diversity rises as long as there is money in it. The implications of this concept are that specialized segments would further fragment into specialized niche segments and mass would no longer command the same ratings. Such is already happening in our media world with channels increasingly dividing into Reach Channels and Affinity Channels. Translated in network’s terms it means that as the network’s audiences shrink, they cannot raise their rates, because they no longer control the clock; Furthermore, there is always somewhere else to reach audiences — somewhere more efficiently and economically. To networks with massive infrastructural & fixed costs, this can spell a death knell and indeed many of our local channels which cannot cover their costs will go under within the next 5 years.

“Regional language channels, specialized programming, niche content, are all new ways of tapping the same households that own TV sets. Instead of the same show at the same time being watched on the same channel, we see a trend of individual TV sets, with choice programming at desired timeslots as the current viewership practice”, said Khalid Siddiqui, CEO, CNBC Pakistan. “The challenge now, and more increasingly as we go forward, will be to carve out clear positioning through high quality, captivating content targeted to clearly identified target audiences. It will be difficult for channels to be everything to everyone, and some channels will have to do a hard think about which space they intend to occupy to match with their strengths”, he added.

The Long Tail also has implications for the producers of content, especially those whose products could not – for economic reasons – find a place in pre-Internet information distribution channels controlled by publishers, record companies, movie studios, and television networks. Looked at from the producers’ side, the Long Tail has made possible a flowering of creativity across all fields of human endeavour. One example of this is YouTube (incidentally the third most popular site in Pakistan), where thousands of diverse videos – whose content, production value or lack of popularity made them innappropriate for traditional television – are easily accessible to a wide range of viewers.

Revenue streams & thus business models are also changing fast for these networks. The amount of clutter on TV is fast leading to the traditional marketing model being challenged, and CMOs are increasingly vocal about the day when it will no longer work. GEO Network alone e.g. aired more than 160,000 spots last year. Marketing saturation has created a clutter environment that people are now resisting. Consumers are so swamped by pitches that many simply tune them out and the more affluent exercise enough control that with the flick of their fingers, they can bypass unwanted advertising.

“Too many agencies, are tethered to a 30-second TV spot mentality because agencies get paid based on 30-second spots and that financial incentive keeps them from changing their model.”, said Ehmer Kirmani, CEO Media Idee. “You can whip up those TV ads, spend millions on their productions and increase those (not so) catchy print ads as much as you like, but their impact is fossilizing and the companies that foot advertising bills are increasingly aware of it.”

Haroon Rashid, GM Marketing, Tapal Tea agrees. “A decade ago opportunities were limited. With the advent of new media such as activations, ambient media, mobiles, etc, the advertising world has changed. The cable networks and the line walas too are becoming stronger everyday. I don’t know if anyone imagined just how much of a new paradigm shift will be required to work with these”, he said.

“[Because of the decreasing returns from traditional campaigns] Tapal has been increasingly experimenting with new media techniques. We were amongst the first companies which employed internet advertising by buying space on Cricinfo.com and were also amongst the first movers who used the cell as a marketing medium to create an engagement with the consumer for our family mixture brand. 40,000 people responded to our campaign in the latter. Last year we’ve increased our presence on mobile media and used this channel as a means of participation for our Danedar brand. A 100,000+ users texted in their responses. So it’s no surprised we’re already putting more emphasis on new media technologies like mobile phones & internet especially with our new website. You cannot ignore television but the clutter is increasing everyday. There will always be a weightage in each media [whilst planning for our campaigns] but [the fact cannot be denied] that new media is more economical”, he added.

Yet inspite of these warnings, the media industry is growing increasingly nascent. 5 years onwards one can literally predict that the status quo would have only been broken by some examples of product placement, a few branded entertainment productions and some forms of new media. It’s not totally the industry’s fault. It too suffers from a range of problems. There are no quality parameters for software, lead times are high, talent is rare and payment cycles are long. Piracy itself is a major issue especially since cable operators rarely pay royalties for the content they air.

Yet even then the networks are not preparing for the oncoming world of infinite ubiquitous content on demand. The “million channel universe” will include not just traditional media delivery and the Internet, but also a whole set of new devices and delivery platforms. Will they stay relevant with their existing business models is a question that increasingly comes to mind. To succeed one must quote Imtiaz Noor, the business development head of MobMasti when he says “Personalization is the catalyst of the new interaction economy over the next 5 years”.

Many in the communications industry are aware that consumers are turning their backs. “We know that things are going to change. We are assessing what is changing, what is the current state and by what time we should be ready with it. It’s not about just creating a destination. First you have to know what your customer’s needs are and their allocation of time. What needs is this medium serving? Content or technology will not make any difference if it’s just going to be more of the same that consumers avoiding right now. It’s how you use these that matters”, said Yasir Riaz, Director Brand & Strategic Planning, GEO TV Network.

Thus channels will have to determine which need states they fulfill and then will have to follow these need states and passion points. Do they enrich your life, give you control, or are just a time pass. They’ll have to answer these questions to fulfill that role.

“We will have to move from being a shopping mall which promotes window shopping, to becoming a high street, specialty store, where shoppers come by intention and spend time there”, said Siddiqui.

In such an environment it is IMPERATIVE to let go of the orthodoxy of traditional segmentation and start looking at the people as “people” rather than numbers on a chart. Mostly because traditional segmentation doesn’t really tell us a lot about the PEOPLE behind the numbers. Firms are increasingly working with LSM (Living Standard Measures) segmentations, rather than traditional SEC profiles. LSM surveys collect data on Ownership of durables, type of house they live in, the extent to which people lack basic items of consumption (adequate food, clothing etc.), the extent to which people have comforts and luxuries (regular holidays away from home etc.), the extent to which people have had financial problems (defaulting on payment of electricity bills etc.),  the extent to which people had problems with their accommodation (leaks, faulty plumbing etc.), for families with dependent children, the extent to which they lacked children’s basic items of consumption (clothing, school supplies and children’s sports and recreational activities). These combined with data from people meters and sales data, will increasingly become the future for all stakeholders – including the agencies, the brands and the networks themselves.

“The role of the different agencies will change to those of ‘real’ brand partners and research will play a critical role in unearthing insights on which brand objectives will be based upon. To this will media selection will increasingly be dependent. At the same time skillsets & knowledge will both have to be upgraded to ensure the message’s seamless integration across all media vehicles”, said Fouad Husain, MD, Mindshare.

“We will remain focused on the quality of our product – i.e. our content – both in terms of inherent quality, as well as audience targeted.  If our content fulfils the needs and desires of the audience, we will have a strong foundation to approach clients to partner with us”, said Siddiqui.

Trends are toward the rise of the digital media in Pakistan however this medium has its own issues namely infrastructure & content. Moreso the marketer in Pakistan still doesn’t understand this medium. “We go with our preferred media. We don’t go by the consumer. Right now internet penetration [which stands at 8 million users] is greater than the combined readership of all English newspapers. However the ad spend going towards English newspapers is still larger than one going to Internet. However since we don’t find internet as our preferred medium, so consumers also don’t find it interesting”, said Riaz.  

So the lesson is not that old media is dead. It’s not that new media is better. It’s not that the content giants don’t know what they’re doing. It’s simply that the media houses are too stuck in the mindset of big, fancy and being infrastructure-bound where they should understand the value of being lean, mean and constraint-free. Many of these traditional media companies will find it difficult to adjust to the new media landscape of mobile platforms and customer created content due to their investments in old-media infrastructure and business models. Make no mistake. The internet and other technological leaps are upending the media and entertainment industries in much the same way that they have begun to turn businesses as varied as advertising, marketing, retail and communications on their heads. Technology has put consumers in the driver’s seat by giving them a vast array of new choices and better information — and corporations and agencies that want to succeed had better get on board. No longer personifying the consumer as avid, mindless drones will work. Now a new equation is needed.