BY ANTONY MUTUNGA
Ever since the health pandemic hit the world, a new norm has set in with millions having to shift from what they were familiar with to relying heavily on technology.
However, even before the pandemic, a shift had already started to take place as technology took centre stage from the increasing popularity of artificial intelligence technology to that of digital currencies. The media industry was also not left behind by this shift as traditional media continues to be overtaken by online media.
Before the tech boom that was mainly brought by the establishment of the internet, media consumption had remained the same for quite a while. People would get information and news from the TV, radio, newspapers, or magazines while entertainment in terms of music and movies was mainly from rental stores and movie theatres. After the tech boom, it was only a matter of years before old media grappled with extinction. People would now stream music, videos, and movies as well as use social media to get information from the comfort of their homes. The new media started of favourite of the millennials since the shift happened in their prime, giving rise to the cord-cutting generation. Onwards the shift has only intensified due to the growth in mobile phone use with online activity hitting through the roof as traditional forms of media took a hit.
In terms of information and news, people have made a shift, a majority, especially the youth, no longer rely on newspapers for such as they rather get it from online where it is easily and readily available. According, for instance, to data from the 2019 Kenya National Bureau of Statistics (KNBS) economic survey, in four years prior to the year of the study, the number of online daily visits grew almost threefold from 1.03 million daily visits in 2014 to 2.9 million daily visits in 2018.
Facing intense competition and counting losses, companies that were in the publishing industry and relied on traditional forms had no choice but to embrace and integrate the new media. As a result, this caused companies such as Standard Media Group (SDG) and Nation Media Group (NMG) to invest more in online services by ensuring that their publications were available on their websites.
When it came to entertainment, it was similar, first, there was the move from analogue to digital, which companies in the field could not ignore if they were to stabilize and increase their returns.
As technology continued to evolve, streaming services emerged. The likes of YouTube started another shift in the industry, they were in demand especially with millennials as they did not only offer original content but they were doing it online. With time, streaming services that primarily focused on movies and TV shows such as Netflix and Hulu came to be and since then they have kept reaching new heights.
Taking a leaf, local media companies such as Royal media services have come up with Viusasa which was established in 2017 as a means of offering content through the new media. With many people preferring to use online service producers, digital TV was recording a decline in viewership. For example, according to data from the Communications Authority of Kenya, Digital TV Subscriptions declined by 7% from 5.8 million in the period between January and March 2019 to 5.4 million in the period between April and June 2019.
Despite the shift, it was gradual until the Covid-19 pandemic hit and the world faced a new norm. Social distancing, remote working, or altogether closing businesses down was the reaction around the world – a blessing to the new media. With millions at home, reliance on the internet hit an all-time high as some worked from home and many relied on streaming services more. For instance, according to the OpenVault Broadband Insights, per-subscriber average data usage had increased from 344GB per month in the last quarter of 2019 to 482.6GB, which is a 40% increase.
Firms in the media industry that had invested in the new media and organizations that embraced the latest technology were able to enjoy profits in the period as their counterparts, who hadn’t, rushed to integrate the technology to have a piece of the pie. Streaming media giant Netflix, for instance, recorded an increase in subscribers from 158.33 million in Q3 2019 to 203.7 million worldwide at the end of 2020. In fact, according to MarketWatch, the stock price of Netflix increased by 62% in the 12 months between Q3 2019 and Q3 2020.
Not only did the reliance on online services during the pandemic assist various organizations to increase returns but it also gave others an avenue to acquire additional income at a time that the economy was in a state of halt. Firms such as NMG and SDG took the opportunity to monetize their websites, offering few free articles to read freely but one has to pay after to access them fully. This was a lifeline at a time that the companies were recording a reduction in profits. Before the change in the business model, NMG, for instance, had recorded a loss of Sh375.2 million after tax for the six months ending June 2020.
Even though the new media has proved to be a game-changer in the industry, it also has obstacles in its way that block it from reaching its full potential. All around the world, mobile phones have played a major role in the rising online activity. However, in the developing world, not all of the population can enjoy the same feat. With most areas in the developing world the issue of infrastructure plays a crucial role. The lack of infrastructure has hindered many from fully benefiting from the new media as a result of challenges such as low network coverage and slow internet connection. On the other hand, many in these areas still rely on feature phones and thus lack devices to be connected. In Kenya, this has proved a problem for the likes of Viusasa and other online services as they are blocked from this untapped revenue.
Competition has also been a hindrance when it comes to organizations that are earning through the new media. This is especially the case when it comes to local companies against the multinationals. An example would be that of Netflix and Viusasa. While Netflix enjoys popularity and increased revenues from around the globe, Viusasa may struggle in comparison, even in its native country. In Kenya, Netflix is somehow more popular due to more content, although Viusasa enjoys a massive share when it comes to offering local content.
Taxes such as the new digital tax introduced in Kenya this year also act as a challenge as start-ups that rely on the new media may be discouraged due to the high cost. Thus, many organizations even if they have digitalized, they continue to avoid making the shift completely. All these obstacles have ensured that traditional forms of media remain alive and relevant.
Without a doubt, the pandemic increased the reliance on new media although, in some areas, traditional forms of media still rule the day. Better infrastructure and regulations that protect locals are the right steps to help the new media finally take over the media industry. As popular TV show ‘American Gods’ depicts, technology is now a god able to stand on its own and compete with any other as long as we continue heavy reliance on it. There is no doubt that the future is new media.