Media in Digital Transition

This spring, I invited representatives from the newspaper and television industries to speak to MBA students in my course on information technology management at Georgia State University’s Robinson College of Business in Atlanta.
Media in Digital Transition

I wanted to expose students to the transition that media industries are undergoing due to trends in digital media.

According to Kevin Riley, editor of The Atlanta Journal- Constitution (AJC), digital media and online advertising have provided the market with more options for messaging and product placement. As a result, advertisement revenue for the AJC was down 50 percent in 2012, compared to its peak in 2004. He points to three primary trends affecting newspapers today:

Job and career-building websites. “Help wanted” classified ads once were one of the biggest sources of advertising revenue for the AJC. Now, job seekers and employers are increasingly connecting through sites such as LinkedIn and Monster.com.

Shifting revenue models. Historically, 80 percent of a newspaper’s revenue came from advertising and 20 percent from subscriptions. Today, that breakdown is closer to 70/30. To survive, newspapers may have to adopt a model in which only 20 percent of revenues come from advertising and 80 percent from subscriptions.

Demand for content. As more online news outlets emerge, newspapers no longer have a monopoly over mass media. According to Riley, the AJC’s main competitor is “the world,” which includes not just other newspapers, but sites such as Google and Yahoo.

To address these trends, the AJC is making “a digital transition,” Riley says. The newspaper is using social media liberally to reach younger audiences. It also offers both free access to online content and paid digital subscriptions. Paid subscribers see content with fewer ads and in more reader-friendly formats. In addition, the AJC is introducing a feature in which users pay extra to access special content on topics that interest them most. At the same time, it pays close attention to the preferences of its print subscribers to generate content to keep newspaper loyalists happy.

One of the AJC’s most popular new offerings has been its app that delivers its content as an interactive PDF. “People really like this because it makes sense to them,” Riley says. Because of the success of its app, the AJC has invested in technology to deliver content with more interactive features. Riley points to the New Yorker, whose app is “incredible,” he says. “You can click on a button and hear a poet read a poem.” Such close attention to the reader’s personal experience via digital media will be key to a publication’s survival, he says.

Attention to the user experience is also critical for television news channels, says Quiana Wright, digital product manager for Atlanta-based CNN. She notes, for example, that CNN has much to learn about personalizing the user experience from a company such as online video content provider Netflix.

What CNN is doing with online video on demand “is not even near what Netflix is doing. We’re not even a part of that conversation,” says Wright, who adds that the way Netflix provides personalized viewing recommendations to its customers “is beautiful.” Users no longer want to have to choose from 100 channels in their satellite or cable packages to find content; they want to target the specific content they’re interested in quickly and easily. “The trajectory [of the industry] is changing,” she says.

CNN’s other challenge is to encourage user interaction with its content via smartphones and mobile web-based applications. To better understand its viewers, CNN plans to study patterns in the way they use digital media. Wright points out that many people turn to mobile web apps in the morning, desktops during work hours, television in the evening, and mobile web again before bed.

Riley’s and Wright’s observations make clear that business schools must integrate into their courses the four pillars of information technology—social media, Big Data, cloud computing, and mobile computing—so that students can understand these tools and apply them effectively to real-world business. Companies are learning the new rules of social media engagement, personalized online content, and data analytics, and our students must do the same if they are to grasp the future direction of their industries and work effectively for companies in the digital age.

J.P. Shim is executive director of the Korean-American Business Center and a faculty member in the computer information systems department at Robinson College of Business at Georgia State University in Atlanta.