Media industry must master "fifth revolution
According to Fredy Greuter, Head of the Media Institute of the Swiss Media Association, the media industry is facing historic challenges: It must master nothing less than "the fifth media revolution", he said on Tuesday.
After the invention of language, writing, printing and broadcasting, digitalization is now bringing about the next upheaval in the media industry, Greuter said on Tuesday in Zurich at the presentation of the latest "Media Trend" study. For media companies, this means studying the changing use of media particularly closely instead of focusing on product development.
The reflex of media managers who feel forced onto the defensive to "react with practiced cost management" is fatal. Although short-term cost-cutting efforts are unavoidable in a difficult environment, in the long term this "sets a downward spiral in motion". It is therefore necessary to "switch from the defensive to the offensive", said Greuter.
Challenge and opportunity
However, digitization is not only a challenge for publishers, but also an opportunity: it opens up the possibility of offering existing and new products as well as digital services. The lower revenue potential of convergent business models is offset by lower overall costs, which brings attractive margins - resulting in a healthy transformation. According to Greuter, this search for new business models and sources of revenue is also at the top of the list of priorities for the media managers surveyed. This necessity is underlined by the fact that, for the first time, more than half (51%) are convinced that professional journalism can no longer be financed through sales and advertising.
Trend towards electronic news consumption
The digital revolution can also be seen in consumer behavior: according to the "Medienbudget" study also presented, sales of newspapers and magazines at newsstands fell by 9 percent to CHF 478 million last year (Werbewoche.ch reported). The population is increasingly shifting its media consumption to electronic media. Mobility and innovation are particularly important to them: for the first time, more smartphones and tablets were purchased in Switzerland than PCs, according to project manager Thérèse Ruedin from the Swiss Media Association. According to Ruedin, the tablet has rapidly become the "favorite gadget of the Swiss": spending on such devices soared from 296 million in 2011 to 460 million in 2012, an increase of 55.4 percent. The population even invested 58 percent more in apps for tablets.
Overall, consumers spent another 0.7% more on IT and telecommunications than in the previous year. The amount exceeded the CHF 4 billion mark. Each private household spent an average of CHF 3,093 on media consumption in 2012. Although this expenditure fell slightly compared to the previous year (2011: CHF 3,150), it was still higher than in 2010 (CHF 2,920).
In total, the Swiss media market generated sales of CHF 14 billion in the reporting year. Consumers spent CHF 11.1 billion on media (-1.9%). The decline in advertising was significantly greater: advertisers invested 2.9 billion or 7.5 percent less. (SDA)
