7/2015 – Internet challenge for media owners

by Tan Thiam Hock

Saturday, 11 April 2015

I HAVE been in London for more than a week and I certainly do not miss home. I am with my family and I guess, home is where the family resides.

Besides the plentiful availability of Malaysian and Asian food, having WiFi and 3G has kept me abreast of news happening at home. I am constantly being kept amused by my friends in group chats via WhatsApp and was kept worried silly when media friends have to spend a night in jail.

There are many newspapers of the same language in Britain and to differentiate themselves, much space have been dedicated to columnists speaking on everything and anything. With their proud tradition of free press unrestrained by absence of draconian laws, the newspapers, writers and cartoonist are joyfully opinionated and clearly biased in what they write. They are free to support or criticise any political parties based on their beliefs. No personality is untouchable. It does not matter whether you are the Prime Minister, opposition leader, mega stars or even royalty. After many trips to this country, the Malaysian in me is still not used to such wanton freedom.

So if you are an entrepreneur, would you invest into the media industry in Malaysia? There are many potential areas of specialisation along this multi-billion dollar value chain that you can consider. But predicting future disruptions to this industry is a complete nightmare to analyst and current players.

For many years, being a mainstream media owner has certainly been the most lucrative. From TV stations to newspapers in whatever language, media owners made so much money that all political parties wanted a piece of the cake. Mainstream media was an important communication tool for ruling governments managing emerging countries hence the tight control on press freedom. As long as the mass enjoyed economic progress, limited press freedom was allowed and accepted without a shout. Then Internet came and changed the rules of the game.

With unrestricted access to Internet, the young population becomes more educated and exposed to western influence, the murmurs become whispers and subsequently lead to street demonstrations like in China and Egypt.

The educated young and the intellectuals clamour for inclusiveness in the running of the country and suddenly the not-so-clever politicians and military react in the way they normally do. They spread more feel good propaganda via their controlled mainstream media whereas the so-called opposition now aligned, focus on the Internet and social media to further their cause. New criminal laws are enacted and you have witnessed police or military clampdown on so-called dissidents. We have seen this sequence of events happening in so many countries over the last ten years.

If you want to invest in mainstream media, you will have to consider the political risk of the country, your business model vis a vis current advertising revenue model and the disruptive impact of Internet technology. Looking at the declining trend of advertising revenue over the last five years, it will be foolhardy to put in fresh investment (lots of it) to chase after the shrinking pie. So free-to-air TV and daily newspapers are a no no.

We have seen new entries into subscription/paid TV gone bust after just two years, real non-starters despite all the brave hypes. Good money down the drain. Even mighty Telekom with its last mile connectivity advantage has found it hard to break through. Despite its first mover advantage, the highly-profitable Astro is under tremendous pressure to deliver imported content on the same day as it is shown in its country of origin to retain viewership. Delayed telecast means viewers will download their favourite programmes in almost real time.

Now that Astro has withdrawn the Golf Channel from the Sports Package that I have signed up for, I will need to ask my son to teach me how to stream-live from the United States the Masters and watch it on my computer. And if technological advances continue to improve, I might even get live-streaming near to HD quality a year from now.

Astro’s competitive advantage could be disrupted within the next few years by smaller more agile competitors who are able to navigate at high speed through the Internet highway offering smaller bundles of specific contents at lower prices. The vast storage capability of the Internet provider will enable you to view contents on demand at your own time for a small monthly fee.

If you want to be a media owner, avoid conventional media. Look for opportunities to acquire a niche position in future trends and make sure you continue to innovate or you will be disrupted by others. Your business model should not have a lifespan exceeding three years and you must continue to disrupt your own model or you will become yesterday’s news.

Providing services in the media industry is an ever lucrative industry if you are able to secure advertising or public relations contracts with our government agencies like tourism or even the Prime Minister’s Department.

To counter the opposition, the ruling parties are more than willing to dish out cyber trooper contracts for a protracted battle in the social media.

Now we have bloggers for hire when it used to be pens for hire. We even have NGOs for hire.

Nowadays guns for hire stand no chance against our world famous top cop, the fastest tweeter in town. Just one tweet will make a guilty twit out of you.

For social bloggers, it would be advisable to stay off issues on religion and race as a simple mistake or slip of an unintended word could land you in trouble. You are then truly on your own.

To all journalists, whichever side you support, stay true to your craft and write with your heart. Just like the Liverpool anthem – You will never walk alone.

And that is a promise from an Arsenal fan.

Published: http://www.thestar.com.my/business/business-news/2015/04/11/internet-challenge-for-media-owners/

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