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18 ноября, 2013

Report: ‘Trends and Forecasts for traditional media outlets in 2020.’

We have chosen the year 2020 as the provisional forecast date for this report – less than seven years from now. If taken from a historical perspective this period may well be considered negligible, but when one considers how rapidly the media industry is changing under the impact of new technologies and the growing use of the internet, then the next few years could be very important in the future development of this sphere. To illustrate this point one has only to look back at the situation just seven years ago in 2006.

At that time only 19% of Russians accessed the internet whereas now that figure stands at 57% (1). Moreover the average time that people spent surfing the net is now double or triple what it used to be at that time. Business news and information was mostly accessed via printed versions of business orientated newspapers (as opposed to online newspapers). The number of people who used smart-phones and tablets was minimal, and the technology to access the internet on these devices was at too low a level to allow users to receive information from the internet efficiently. Despite the fact that internet-media, social networking and the blogosphere did exist and was growing rapidly in 2006, they were accessible to only the most advanced section of society and had no real social and economic value.

The trends described in this report suggest that by the end of 2020 we will be looking back on 2013 with the same perspective as we are looking back on 2006 today – as a very different environment when it comes to accessing information – although the changes themselves will probably differ greatly from those we have observed over the past seven years. The main trend from 2006 to 2013 has been the growth of information and the communication value of the internet, meaning that traditional media outlets have simply been increasingly forced out of the market – though they have not themselves undergone any significant transformation. The period from 2013 to 2020 however, will see a time of great change for traditional media, due to the integration of a new technological reality.

It should be noted that most of the described trends in the report are not limited to 2020 and should therefore not be restricted to the rigid time-frame of the study. In some cases we refer to trends from previous periods or from the present day, and in others we describe changes which will only become clearly visible after 2020.

The most important factor of this medium-term forecast is that it is based less on supposition, and significantly more on trends which have already formed and are being observed. Moreover, technologies which will form the impetus for changes in information reality in the coming 5-10 years, are already in place – both as concepts and as products which have already emerged on the mass market.

In this report, we view the transformation of the media as a global process, which, although is may have a certain national character, is nevertheless subject to universal rules associated primarily with technology. The vector for change may be universal but the speed with which these changes occur and the rate at which new technology takes hold in different countries may vary. It is for this reason that it was decided not to limit the report to a national framework but to consider the Russian trends in a global context, comparing them with similar trends in Europe and the USA. American trends are of particular interest because the majority of global advances in technological innovation in the media over the past 20 years have originated here and have then been adopted in European countries and Russia.

(1) Analytical bulletin from the Public Opinion Foundation (ФОМ) ‘The Internet in Russia’, Issue 42, 2013 Civil Society Development Foundation.

Key Findings of the Report:

- The forecast with regard to the television sector can be considered fairly stable. The number of viewers, broadly speaking, will not change significantly, although the method of viewing television content will become more diverse, with people watching from different sources and different viewing devices.

- The average number of television channels available to Russian viewers will grow significantly both because of the long term proliferation of cable and satellite operators and because of the digital nature of broadcasting.

- The main TV channels will gradually lose their monopoly as providers of professional TV content. The period leading up to 2020 will see the growth of streaming online videos and the aggregation of content from different sources. The American channels Netflix and Hulu already have a strong hold on the market and similar trends will spread to Europe and Russia in the coming years.

- Viewers will increasingly be using alternative viewing devices such as computers, tablets and smart -phones. This will be made possible by the aggregation of video-content by internet services and the TV channels themselves which will enable online transmissions. These changes will raise the issue of having to change existing approaches to gauging the nature of television audiences.

- The emergence of the ‘second screen’ will continue to grow apace, increasing the interactive potential of television and merging TV viewing with internet browsing. The functional capabilities of the second screen will broaden over the study period and will gradually become an integral part of TV viewing.

- The outlook for printed media sources in the period leading up to 2020 is grim. We shall be seeing a virtually total disappearance of this sector in its printed paper form in the period from 2020 to 2030.

- Printed media will continue to see a fall in total circulation and readership. At the same time they will also see a fall in advertising revenue as media advertising budgets decrease their allotment of funding for printed media. This situation will mean that second or third rate publications will either have to go out of business or move across to the internet. Meanwhile, the market leaders will need to seek new ways of maintaining their presence in the market and subsequent monetisation of content.

- Business and specialised publications, which have a stable and loyal audience, will gradually introduce paid access to content on their sites – the so-called paywall. The emphasis here is on maximising profits from the distribution of content to the detriment of advertising revenues. Despite the popularity of this model in the USA and Europe it is unlikely that this option will dominate in Russia.

- Leading newspapers on the contrary, will take action to expand their readership both in printed and electronic form in order to maximise their income from advertising revenue. We are therefore likely to see a transition among leading Russian newspapers where the issues are free and the circulation is thus increased.

- Printed media – especially free newspapers – will find that sponsored content will take on an increasingly important role, which is a world wide trend. In Russia, we will see long standing phenomena such as ‘jeans’ (where advertisments are disguised or ‘clothed’ as feature articles) becoming more and more legitimate both in the industry and among readers.

- The outlook on the market for radio is relatively stable as it seems likely that radio-stations will gradually move into the digital sphere and will broadcast exclusively via the internet. We will see the disappearance of traditional radio airwaves in the period between 2020 and 2030.

- A negative factor for radio stations however will be the progressive decrease in the number of people listening to traditional radio stations at home due to the increase in listeners accessing all their audio needs via the internet. The increased popularity of wifi networks will mean that eventually people who normally listen to their car radio will also be accessing stations online. However this trend will be limited in scope.

- One positive factor for radio stations is the continued boom in the car industry in Russia which brings with it an increase in the number of people who will be listening to their car radio. The segment of people listening to car radios will therefore continue to grow within the general structure of radio listening.

- When these trends are taken into account we will see a growth in the proportion of talk radio stations, which specialise in exclusive content, within the framework of the whole radio network. We are likely to see an increase both in the number of these stations and a tendency for specialisation aimed at particular groups of listeners.

- It is probable that radio will keep its analogue format until 2020. Digital radio programmes have not been a great success either in Russia or the United States and in the future digital radio will cease to be relevant due to the development of internet broadcasts.