The coronavirus has thrown the world into a maelstrom. Beyond the obvious and terrible health impacts, the world economy and political landscape are set to be turned upside down.
Media are in many ways first and foremost to be affected. Journalists bravely continue to cover events despite risks to their own health and that of their families. Meanwhile, media organizations may need to redefine the very basics of how they work and survive.
So far events have been the most visible part to go — Spice Beta in Chiang Mai, the International Journalism Festival in Perugia — one by one the fixtures of the global media event calendar have been postponed or cancelled.
Aside from the losses in networking and new ideas that typically come out of such events, this will deal a significant blow to budgets. Whilst media that solely rely on events are rare (although they exist), many mid to large outlets generate between 10% to 40% of annual revenues from organized gatherings.
[There’s some interesting experimentation happening in online events – such as Splice Low-Res organized by Poland’s Outriders and Singapore’s Splice Beta, but it’s unlikely to be the scale solution we are looking for]
In the short-term, the drop in events revenues will be balanced out by higher ad revenues — with half the rich world in quarantine and panicked traffic has been high.
That isn’t much of a blessing, though. For one, ad spending is already dropping — New York Times CEO has already announced an expected 10% drop in ad revenue in just the first quarter of 2020. Moreover, savvy marketing directors will likely stay away from media filled with pestilence and death (with some exceptions, of course — hand sanitizer is booming and advertised everywhere).
More promising is reader revenue, particularly given the spirit of mutual support and generosity born out of the crisis.
The Local, a network of websites that tailor to expat communities across western Europe has seen a jump in subscriptions (its main revenue sources, together with ads), recently saw a bump in reader payments.
“We now have 17,000 paying members – 15% more than 2 weeks ago,” co-founder James Savage tweeted on March 14. “This despite making all need-to-know information free online.”
Over the longer term things become more unpredictable. Consumption of media content is likely to stay high as people go stir-crazy in their office/ living rooms, but most health-related stories have been made free even by outlets with hard paywalls and substitutes loom large (from Twitter through Netflix and Twitch). Moreover, declining revenues will no doubt lead to many.
The question remains how long the current state of affairs will last: a few weeks, months, or over a year. So far most forecasts don’t look optimistic — a recent, undisclosed UK government assessment noted that the current situation will likely persist until Spring 2021.
But even a few months could have a lasting impact, experts warn.
“Once effective work-from-home policies are established, they are likely to stick,” Karen Harris, from global management consultancy Bain, told Bloomberg.
Like it or not, much of human life is moving online — and will probably stay there for a while. People will play games, read news, talk to their loved ones… all online.
The media’s job will be to provide that forum for people to recreate the parts of society that they are missing — using revenues from those readers to fund its work.
What that may look like is still unclear, but most likely it looks quite different from their format today, perhaps integrating remote working and social media tools to an even greater extent — one can imagine book clubs, e-sport sites or local jobs boards curated by local media outlets.
The challenge is great, as social media platforms and digital non-media competitors have both the technical talent and resources to outflank any initiatives launched by journalists, although there is a lot of social goodwill for news staff doing their jobs in times of crisis.
As a result, the ongoing shift towards a winner-takes-most world will likely persist, with smaller, poorer newsrooms less likely to adapt. But that vision is not necessarily as dark as some experts paint it.
One of the key reasons for media business structural unprofitability is the fact that barriers to entry have been so incredibly low, meaning anyone with 20 euros could set up a site and launch their own outlet — carving up audiences and ad revenues into tiny, unsustainable slivers.
Increased organizational and digital capacity raises the barriers to entry, meaning that finally some media might be able to find audiences that they can capitalize off of — and invest that surplus into creating new products or services.
Similarly, media need champions who can accumulate wealth and take on the social media platforms — not a litany of weak organizations incapable of making their voices heard.
All this isn’t necessarily much comfort for local media already struggling, particularly those serving overlooked or poorer communities who won’t be able to contribute to their community publication.
In a very darkly darwinian twist, communities who cannot come together online will likely not survive the times of the coronavirus.